Coding a Facility Claim Procedure, Modifier and Diagnosis Codes - Basic steps

 -    A critical element in claims filing is the submission of current and accurate codes to reflect the services provided. Correct coding is essential for correct reimbursement. We have applied procedure code edits to outpatient claims for our Medicare Advantage members since 2008. Effective September 15, 2012, wewill apply these edits to our Commercial outpatient claims.

Complete and accurate procedure code, modifier and diagnosis code usage at the time of billing ensures accurate processing of correct coding initiative edits. Wecan only use the primary modifier submitted with the alternate procedure code for outpatient billing. We encourage you to purchase current copies of CPT, HCPCS and ICD code books.

The correct coding initiative edits and medically unlikely edits will apply to outpatient claims from the following hospitals and facilities:

• Acute care hospitals

• Long term acute care hospitals

• Ambulatory surgical centers

• Psychiatric facilities

• Substance abuse facilities

• Inpatient rehabilitation facilities

• Skilled nursing facilities

Note: Ambulatory surgical centers will follow institutional correct coding initiative edits forour commercial business, while our Medicare Advantage business will process against the professional edits.

Unlisted Procedure Codes

Unlisted procedure codes are not recommended for outpatient claims since they impact reimbursement of the claim. Refer to the outpatient payment programs section of this manual and the participation agreement for coding and reimbursement instructions.

Code Updates

The American Medical Association (AMA) and the Centers for Medicare & Medicaid Services (CMS) update procedure codes to reflect changes in health care and medical practices. Coding updates occur quarterly with the largest volume effective January 1, of each year. Current Procedural Terminology (CPT) and Healthcare Common Procedure Code System (HCPCS) codes may be added, deleted or revised with each update. International Classification of Diseases-9th Revision-Clinical Modification (ICD-10-CM) updates may occur bi-annually, with the largest volume effective October 1 of each year.


A modifier allows a provider to indicate that a service or procedure is altered by some specific circumstance, but the definition or code is not changed. Modifiers may be used in some instances when additional information is needed for proper payment of claims. Valid modifiers and their descriptions are found in the most current CPT and HCPCS coding books.

Weprocess claims using only the first modifier for outpatient institutional claims. While up to three modifiers are accepted, claims are processed using only the first modifier. Therefore, submit the most important modifier affecting reimbursement in the first position on paper and electronic claims.

Note: If your claim is denied due to a lack of documentation to support the use of a specific modifier, you may submit an appeal. Your appeal must be submitted in writing and accompanied by the necessary documentation. 4

Modifiers may be used to indicate that:

• A service or procedure has been increased or reduced

• Only part of a service was performed

• A bilateral procedure was performed

• A service or procedure was provided more than once

• Unusual Events Occurred

No comments:

Medical Billing Popular Articles