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AAPC CPC Prep Course - Chap 1 Notes
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11/3/23, 7:23 PM AAPC CPC Prep Course - Chap 1 NotesCPC Course - Chap 1 Notes
The Business of Medicine
Coding as a Profession
● Medical Coding - process of translating a healthcare provider’s documentation of a patient
encounter into a series of numeric or alphanumeric codes
○ Separate code sets to describe diagnoses, medical and surgical services/procedures,
and supplies
○ Universal shorthand language to:
■ Ease data collection
■ Evaluate quality of care
■ Determine costs and reimbursement
● Coding Systems - used in ambulatory settings, provider offices, long-term care
○ CPT, HCPCS Level II, ICD-10-CM
○ Coding ties directly to reimbursement - codes must be assigned correctly to ensure
proper payment
● Code assignment - determined by provider’s documentation and unique rules that govern each
code set
○ Vary depending on who is paying for patient’s care
● Medical Care is complex and variable - as are coding requirements
○ Precise coding -requires a thorough understanding of coding guidelines, mastery of
anatomy and medical terminology
○ Must be detailed oriented
● If a provider’s documentation is inaccurate or incomplete - will not translate properly
to the language of coeds → will not get properly reimbursement
○ Must:
■ Evaluate the documentation for completeness and accuracy
■ Communicate regularly with the physician to ensure documentation requirements
set by payers are met
○ May use computer programs to tabulate and analyze data to improve:
■ Patient care
■ Better control costs
■ Provide documentation for use in legal actions, or use in research studies
● Coders who specialize in inpatient coding are referred to as health information coders, medical
record coders, coder/abstractors, or coding specialists
○ Assign a code to each diagnosis and procedure documented
■ Rely on their knowledge of disease processes
○ Coders then use classification system software to assign the patient to one of the several
hundred Medicare Severity-Diagnosis Related Groups (MS-DRG)
■ MS-DRG determine the amount of hospital will be reimbursed if the patient is
covered by Medicare or other insurance programs using the MS-DRG system
● Coders can also specialize in Cancer registry
○ Cancer registrars maintain facility, regional, and national databases of cancer patients
○ Review patient records and pathology reports to assign codes for the diagnosis and
treatment of different cancers and select benign tumors
○ Conduct annual follow-ups on all patients in the registry to track treatment, recovery, and
survival
○ Calculate survival rates of various treatments, locate geographic areas with high
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incidences of certain cancers, and identify potential participants for clinical drug trials
● Continuing Education - very essential for coders
○ Codes and policies can change quarterly
● Adoption of EHR - broaden and alter coders’ responsibilities
○ Must be familiar with EHR software
○ Maintaining security
○ Analyzing electronic data to improve healthcare information
○ Assist in improving EHR software and contribute to the development and maintenance of
health information networks
○ Take on auditing role in reviewing EHR code suggestions based on documentation
● Coding is a technical and rapidly changing field
○ Skilled coders may become - consultants, educators, medical auditors
○ Evolved over the past several decades and will continue to do so
■ As healthcare embraces new technologies, code sets and payment
methodologies
The Difference Between Hospital and Provider Services
● Outpatient coding - pertains to provider services
○ Outpatient coders use CPT, HCPCS Level II and ICD-10-CM
○ Work in provider offices, outpatient clinics, facility outpatient departments
○ Outpatient facility coders also use Ambulatory Payment Classifications (APCs)
○ Have more interaction with providers throughout the day
● Inpatient coding
○ Use ICD-10-CM and ICD-10-PCS codes
○ Also use MS-DRGs for reimbursement
○ Less direct interaction with providers
How Provider Office Works and How the coder Fits
● Patient visits the medical practice → front desk person obtains insurance and
demographics (or information is electronically obtains before visit) → info is entered
into practice management system → provider sees the patient → provider documents
visit in patient medical record and completes encounter form → at completion of visit,
patient checks out and pays copay if applicable
● After patient leaves office → documentation is translated into procedure or supply
codes (CPT or HCPCS) and diagnosis codes (ICD-10-CM) → this information is
submitted on a claim to the insurance company or payer to obtain reimbursement
○ This translation of documented information from the visit is referred to as coding
○ Coding - can be reformed by provider, EHR, or Coder
■ When the provider or EHR performs the coding, the coder takes over the role of
auditor to verify the documentation supports the codes selected
■ When the coder performs the coding, the coder reviews the provider’s
documentation and codes the services based on what is documented in the
patients records
● After the documentation is translated to codes → they are assigned a fee and billed to
the patient or payer
○ The place of service code is reported to indicate where services were performed
■ These are found in the CPT code book
○ The charges are billed to payer using the CMS-1500 claim form (available in both paper
& digital formats)
■ Many payers now only accept electronic claims
● These benefit the medical office by allowing timely submissions to the
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payer and proof of transmission of the claim
■ Payers uses the codes to identify the services performed and to determine
payment or denial
● The determination is sent to the provider in the form of a remittance
advice (RA) or explanation of benefits (EOB)
○ These explain the payer’s determination in payment
○ If a service is denied → responsibility to validate or
appeal the denial often falls on the coder
Understanding the Hierarchy of Providers
● Medical offices and hospitals have a variety of medical providers (requires different levels of
education)
○ Scope of Practice - refers to the States individual proactive guidelines for each level of a
provider
○ Physician - 4y college, 4y medical school, 3-5y or more of residency (medical training
medical specialty)
■ Can also continue training in a subspecialty - called a fellowship
○ Mid-level Providers - work in the same office as Physician - also know as physician
extenders (extend work of the physician)
■ Physician Assistants
● Licensed to practice medicine with physician supervision
● PA program ~26.5 months to complete after bachelor’s degree
■ Nurse Practitioners
● Master’s degree in Nursing
■ Mid-level providers - generally reimbursed at a lower rate than physicians
● Scope of practice varies by state but mid-level providers typically require
oversight by physician
The Different Types of Payers
● Some patients pay medical expenses out-of-pocket, but mort patients are covered under at least
one health plan
○ Significant as individual payers may specify coding requirements in addition or even
contradictory to CPT guidelines and those created by CMS
● 2 types of payers -finer distinctions within these categories
○ Private - commercial carriers
■ Have both group and individual plans
■ Contracts provided vary, but usually include hospitalization, basic, major medical
coverage
○ Government
■ Medicare - primary government payer in US
● Federal health insurance, administered by CMS, provides coverage for
people 65 and older, blind, disabled, people with permanent kidney
failure or end-stage renal disease
● CMS regulations often influence coding requirements for Medicare and
non-Medicare payers alike
● Made up of several parts:
○ Medicare Part A - helps cover inpatient hospital care & skilled
nursing facilities, hospice, and home health
○ Medicare Part B - covers 2 types of services:
■ Medically necessary provider services - need to
diagnose or treat a medical condition and that meet
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