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How to Assign Medical Diagnosis and Procedure Codes

Upon reading the operative report or office notes, the Medical Coder must identify the illness or disease and find the corresponding diagnosis code in the International Classification of Diseases (ICD) book, Volumes 1 and 2. (The current edition is ICD-9, but it will soon be ICD-10.) This book is the bible of coding, containing all the diagnosis codes.

After finding the diagnosis codes, you then look up the procedure codes that best describe the work done, using one of the following books:

  • The Current Procedural Terminology (CPT) book: The CPT book contains all the procedure codes as determined by the American Medical Association (AMA) and includes the definition of each procedure. Physicians and outpatient facilities choose a code from the CPT book.

  • The ICD-9 Volume 3 book: Hospital inpatient procedures are chosen from the ICD-9 Volume 3 book.

Because so many different codes and corresponding procedures exist, you may suffer from “coding drama.” Coding a procedure with a lot of moving parts can get a bit complicated. Capturing all the procedures that were performed during a surgery is important.

But they each must be separately billable or have involved extra work by the surgeon in order to justify unbundling them (or billing them separately). Coding can get pretty complicated. Keep this in mind: Coding a procedure is simple if you remember to break it down into small bites.

Physician coding

Physician coding is just what it sounds like: coding diagnoses and procedures representing the work performed by a physician. Under certain circumstances, work performed in an outpatient setting, such as an ambulatory surgery center (ASC), also uses physician coding.

Physician offices, ambulatory surgery centers, and other outpatient facilities use the CPT code sets to represent the procedure performed. Physician claims are submitted on the HCFA/CMS-1500 claim form. In most circumstances, facilities bill commercial carriers on the UB-04 claim form.

Facility coding

Coding for facility reimbursement often pertains to hospital coding. Specific coding and billing guidelines exist for hospital billing. If you are working as a facility coder in a hospital, you use Volume 3 of the ICD-9 book to identify the procedures.

Basically, facility coding is for the hospital inpatient setting. Outpatient centers, including those run by the hospital, use physician coding.

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