Cheat Sheet

Medical Billing & Coding For Dummies

Working as a medical biller and coder is a challenging and rewarding job that takes you into the heart of the medical industry. To succeed, you'll need to know how to file an error-free claim, important acronyms, what to expect as the U.S. prepares for ICD-10, and what to look for in a payer contract.

Medical Billing: Filing a Clean, Error-Free Claim

A clean medical claim is one that has no mistakes and can be processed without additional information from the provider or a third party. It's correct from top to bottom. A clean medical claim meets the following criteria:

  • The healthcare provider is licensed to practice on the date of service and is not under investigation for fraud.

  • Every procedure code has a supporting diagnosis code, which eliminates any questions about medical necessity. In addition, the form includes no expired or deleted codes.

  • The patient's coverage was in effect on the date of service, and the patient's insurance covers the service provided.

  • The claim form includes all the required information (patient name, address, date of birth, identification number, and group number) in the correct fields.

  • The form correctly identifies the payer and includes the right payer identification number and payer mailing address.

  • The claim is submitted on time.

Ten Must-Know Medical Billing and Coding Acronyms

The world of medical billing and coding is like one big bowl of alphabet soup because using abbreviations and acronyms in medical records saves time. Each medical office will have its own most frequently used acronyms based on its area of expertise; but here are some of the most common abbreviations and acronyms used in all medical offices:

  • CMS (Centers for Medicare & Medicaid Services): The division of the United States Department of Health and Human Services that administers Medicare, Medicaid, and the Children's Health Insurance Program.

  • EDI (Electronic Data Interchange): The electronic systems that carry claims to a central clearinghouse for distribution to individual carriers.

  • EOB (Explanation of Benefits). A document, issued by the insurance company in response to a claim submission, that outlines what services are covered (or not) and at what level of reimbursement. Each payer has its own EOB form.

  • HIPAA (Health Insurance Portability and Accountability Act): The law, sometimes called the Privacy rule, outlining how certain entities like health plans or clearinghouses can use or disclose personal health information. Under HIPAA, patients must be allowed access to their medical records.

  • HMO (Health Maintenance Organization): A health management plan that requires the patient use a primary care physician who acts as a "gatekeeper." In HMOs, patients much seek treatment from the primary physician first, who, if she feels the situation warrants it, can refer the patient to a specialist within the network.

  • INN (in-network): A provider who has a contract with either the insurance company or the network with whom the payer participates.

  • OON (out-of-network): An out-of-network provider is one who does not have a contract with the patient's insurance company.

  • POS (Point of Service): A health insurance plan that offers the low cost of HMOs if the patient sees only network providers.

  • PPO (Preferred Provider Organization): A health management plan that allows patients to visit any providers contracted with their insurance companies. If the patient visits a non-contracted provider, the claim is considered out-of-network.

  • WC (Workers' Compensation): U.S. Department of Labor program that insures employees who are injured at work.

Medical Coding: Switching from ICD-9 to ICD-10

The International Classification of Diseases (ICD) is a list of medical classifications used in medical coding. ICD-9 has been used in the United States since 1979, but ICD-10 is coming, ready or not. ICD-10 will result in more specific data, which in turn will assist the World Health Organization (WHO) in its efforts to identify viral mutations and other health threats. Currently, healthcare providers worldwide are obligated to be ICD-10 ready by October 2014. This gargantuan task is being implemented in phases:

  • Phase 1: Develop an implementation plan and identify potential impact on various office operations

  • Phase 2: Implement preparation, working with software vendors and clearinghouses to ensure compatibility

  • Phase 3: Go live with the 5010 platform in preparation for ICD-10 file transfer

  • Phase 4: Address and correct deficiencies identified in Phase 3

Educators and companies that publish coding materials have been working for several years to prepare coders for the transition. The AAPC and AHIMA, the two main credentialing organizations for billers and coders, have sponsored and will continue to sponsor workshops to assist coders in this process. Be sure to check these workshops out. Both organizations will also implement an ICD-10 certification testing process.

Following are some steps you (or your office) can take to prepare for the big switch:

  1. Prepare a report that lists, in order of frequency, currently used ICD-9 codes; then find the ICD-10 codes slated to replace them.

    Several online tools, or cross coding translators, map ICD-9 codes to ICD-10 codes. (The AAPC has an ICD-10 code translator and so does Medicare.) This task can help you identifying the ICD-10 codes that your provider will use the most.

  2. After you identify the ICD-10 codes that will soon be part of the daily routine, make the practitioner aware of the specific documentation that is missing from current patient records.

    If your office will continue to use super-bills, this process helps identify which codes should be listed on the form.

  3. Work with the billing software vendor to make sure that the ICD-10 codes that are likely to be used immediately upon transition are programmed into the software.

    If not, you can make them aware of the codes your billing software will need to accommodate. Doing so ahead of time will help you minimize delays during the early days (or weeks or months) of the actual transition to ICD-10.

Reading Payer Contracts for Key Medical Billing and Coding Details

Insurance companies (payers) offer various levels of coverage to their members, and as the medical biller/coder, you must be able to navigate payer contracts to gather the information you need to prepare and follow-up on claims. Many payers or networks have standardized contracts that they offer to healthcare providers. A well-defined contract does the following:

  • Defines the number of days after the encounter that the provider has to submit the claim. This is called timely filing.

  • Specifies how many days after receipt of the claim the payer has to make payment.

  • Specifies which of the payer plans are included, the frequency of services that it will cover (for certain procedures), and the type of claim that providers must submit.

  • Identifies special circumstances, such as how unlisted procedures will be reimbursed, which procedures are carved out of the fee schedule, the number of procedures that the payer will pay per encounter, and how to apply the multiple procedure discount.

  • Identifies the appeals process.

  • Identifies cost-intensive supplies or procedures (such as implants, screws, anchors, plates, rods, and so on) that may need to be paid.

As a biller/coder, make sure you're familiar with the contract specifics, and if you have any questions, talk to more experienced billers and coders in your office or call the payer directly for clarification.

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