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Medical Billing and Coding
Niyoca Daley
HCM-345-T2066 Healthcare Reimbursement
Candice Faison
November 26, 2023.
In healthcare there are required guidelines, regulations. Policies and standards that are set
to billing, coding and reimbursement in which healthcare providers and facilities must adhere to.
“Medical billing is one of the specialized tasks, and the process involves the patient's healthcare
information, diagnosis of illness, necessary medical equipment, and medical services information
from the physician's notes”.(ABNewswire, 2023), Coding includes using the health information
that is such as diagnosis from medical records to complete a claim.
When healthcare organizations comply with these rules and regulations there are less to no
reimbursement issues. It is very important that all
services provided to patients are documented
correctly. According to the National Library of Medicine, “As part of these guidelines,
appropriate documentation is a requirement of CMS and plays a crucial role in practice
effectiveness in coding and billing” (Burks, Shields 2023). All patient information including
demographics, correct and up to date insurance, patient diagnosis and correct CPT or “ Current
Procedural Terminology” codes are required for proper reimbursement. Medical coding and
billing plays a significant role in the healthcare industry ensuring that healthcare providers are
reimbursed properly for their service and the maintenance of accurate patient records. “ Accurate
coding and billing practices help to reduce errors and fraud, which have a severe impact on both
patient care and healthcare costs'' (AAPC,2023). The DRGs, CPTs and HCPCS are involved in
billing and coding. DRGs, or Diagnosis Related Groups, group the diseases in the billing system
according to what is needed for care, which is then filled under the inpatient payment system ,
this controls the cost and reimbursement. Compliance with HIPAA standards ensures the secure
and standardized electronic transmission of billing information, impacting the efficiency of
reimbursement processes. HIPAA added an “Administrative Simplification” (AS) to some parts
of the Social Security Act. With the AS, “Title II formed a set of regulations and guidelines for
the electronic transmission of healthcare data, and set up guidelines for the code sets used in
medical billing and coding”(HIPAA 101, 2023). ICD. CPT codes, and HCPCS codes were
formulated by HIPPA for use in creating claims. CPT codes are used to describe medical,
surgical, and diagnostic services. The use of CPT codes affects the amount and type of
reimbursement for specific procedures. Accurate coding is crucial to ensure proper payment for
the services provided. According to AAPC, In 1966,
CPT codes were created to standardize
reporting of medical, surgical, and diagnostic services and procedures performed in inpatient and
outpatient settings.
Healthcare Common Procedure Coding System (HCPCS) codes are used to identify and
code services, supplies, and equipment not covered by CPT codes.
Proper use of HCPCS codes is essential for accurately capturing non-physician services and
supplies, influencing reimbursement for these items.
Prospective payment systems provide predictability. But may have challenges for organizations
to manage cost effectively which allows healthcare providers to deliver cost effective care
regardless of the actual costs acquired. “A Prospective Payment System ,PPS, is a method of
reimbursement in which Medicare payment is made based on a predetermined, fixed amount.
The payment amount for a particular service is derived based on the classification system of that
service, for example, diagnosis-related groups for inpatient hospital services”. (CMS,2023).
The guidelines for coding and billing using the International Classification of Disease, Tenth
Revision, Clinical Modification (ICD-10-CM) are set forth by the Centers for Medicare and
Medicaid Services (CMS) and the National Center for Health Statistics (NCHS), The current
process of coding and billing set forth by CMS relies on evaluation and management (E&M)
codes which permit insurance companies to provide a fee for service reimbursement approach.
Many private insurance companies adhere to the same guidelines set forth by CMS.Purpose: ICD
codes are used to classify diseases and other health conditions. Proper use of ICD codes is
essential for accurate diagnosis documentation, which influences reimbursement rates. Incorrect
coding may lead to claim denials or reduced reimbursement.
The Centers for Medicare & Medicaid Services (CMS) finalized Medicare payment rates
for hospital outpatient and Ambulatory Surgical Center (ASC) services. In addition to updating
the payment rates, the Calendar Year (CY) 2022 Hospital Outpatient Prospective Payment
System (OPPS) and ASC Payment System.”Several key goals of the administration, including
addressing the health equity gap, fighting the COVID-19 Public Health Emergency (PHE),
encouraging transparency in the health system, and
promoting safe, effective, and patient-
centered care”.(CMS, 2021) is one of the specialized tasks, and the process involves the patient's
healthcare information, diagnosis of illness, necessary medical equipment, and medical services
information from the physician's notes. It also contains laboratory and radiology results, etc.
Medical coding professionals ensure that the codes are correctly applied during the medical
billing process so that insurance claims can be easily processed.
These regulations are requirements for billing Medicare and Medicaid beneficiaries. Non-
compliance can lead to claims denial or legal consequences and adherence ensures proper
reimbursement. Billing and coding regulations ensure that certain standards in documentation
and reporting are met in the delivery of healthcare services. This influences reimbursement in
healthcare organizations and or facilities. Proper coding is crucial for precise reimbursement,
while adherence to regulations such as HIPAA and government billing guidelines is vital for
overall compliance, PPS changes reimbursement to a predetermined, fixed rate. To optimize or
advance revenue and quality care, Healthcare organizations must navigate these regulations.
References
HIPAA,101, 2023, Medical Billing and Coding
https://www.medicalbillingandcoding.org/hipaa-101/
AAPC, 2023, What is CPT?
https://www.aapc.com/resources/what-is-cpt
CMS, cy 2022, Ambulatory surgical center payment(CMS-1753FC)
https://www.cms.gov/newsroom/fact-sheets/cy-2022-medicare-hospital-outpatient-prospective-
payment-system-and-ambulatory-surgical-center-0
CMS, 2023, Prospective Payment System
https://www.cms.gov/medicare/payment/prospective-payment-systems?
redirect=/prospmedicarefeesvcpmtgen/
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