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Diagnosis Coding Has Taken Center Stage in Medical Billing

July 10, 2014

Accurate Diagnosis CoHistorically physicians and payers were ‘on the same page’ regarding fee-for-service reimbursements. The doctor provided a service, for which the medical professional received a fee. Simple and not complicated. However, along with healthcare reform comes the need for physicians to be thorough and accurate with their diagnosis codes.

The shift to pay-for-performance (P4P) programs, originally initiated by the CMS, but increasingly adopted by private payers, demands this accuracy. Along with offering incentives to physicians for providing quality care, there are now penalties for medical professionals who may not be offering patient care of acceptable quality.

Accuracy Was Always an Issue

While accurately recording diagnosis codes has always been important, until P4P programs, many payers accepted marginally thorough supporting information to approve claims and pay providers. The new emphasis on claims clarity often proves to be challenging for physicians and billing staff, particularly for those providers not in the habit of submitting fully documented reimbursement claims.

In the past, claims with faulty diagnosis codes typically were denied. Yet, some insufficiently explained claim submissions slipped through and were approved. If payer claim reviewers were hurried into claim examinations, it was always possible that some submissions that could have had payers ‘scratching their heads’ were approved.

However, most of the diagnosis coding rules have changed. Accuracy, always a factor, has become the primary component of claims approval. Along with approved/rejected decisions, medical providers now face quality care issues, requiring further justification and explanation to eliminate payer confusion.

Proper Diagnosis Critical for Payment

Some physicians and billing personnel seem forgetful that Medicare Advantage plans pay, in part, as a function of the number and severity of sickness in the total population of patients. CMS calculates variable per month payments based on the levels of the ‘sick’ population. Some private payers are endorsing this approach, demanding that physician diagnosis coding ‘fits’ the matrix.

While some physicians during the fee-for-service era always went the extra mile to fully explain their diagnostic coding and process, many other providers, often because of billing staff time constraints, neglected to thoroughly document their diagnosis procedures. However, providers now risk facing claim denials with P4P programs if payer review staff is unsure that the doctor performed diagnostic services that were necessary to design a treatment plan.

Accurate and thorough coding for chronic conditions is another prime area of payer scrutiny. ICD-9 guidelines require providers to use these codes ‘as often as applicable’ when treating chronic conditions. P4P quality care evaluation depends on proper use of these codes. The penalty consequences of taking coding ‘shortcuts’ can result in lower income for the physician.

These are some of the reasons that using accurate diagnosis codes are critical for maximum claim approvals and CMS decisions that physician care qualifies as meeting quality guidelines. The strong focus on procedural diagnostic coding accuracy is here—possibly affecting your compliance and income levels.

Accurate diagnosis coding, backed up by thorough documentation regarding the necessity of diagnostic procedures, is no longer a payer ‘luxury.’ Accuracy and clarity is now a necessity for all physicians. Achieving this result typically demands some combination of the following actions.

  • Designing an almost foolproof internal procedure for billing staff or physicians to review all claim submissions for accurate diagnosis codes and supporting document clarity.
  • Have experienced coders review EHR document derived diagnostic codes before submitting claims.
  • Retaining a leading independent coding and documentation firm, such as M-Scribe Technologies, to assume the responsibility of submitting accurate, clearly explained diagnostic procedure claims for you.
  • Physicians developing the habit of fully documenting all diagnostic procedures for every patient, helping billing staff and payer reviewers to understand the reasons for the diagnosis process used.

Physicians and practices using these tips should remain in HIPAA, CMS and P4P compliance, maintain or increase revenue and create evidence of delivering quality care to all patients. Properly using diagnosis codes and supporting your diagnostic procedures with valid documentation will achieve these results. None of the potential alternative results are acceptable for either doctor or patient.


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