Lecture Notes For Comprehensive Medical Coding, 2019 2nd Edition
Lecture Notes For Comprehensive Medical Coding, 2019 2nd Edition simplifies complex topics with easy-to-understand notes.
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CHAPTER 1: YOUR CODING CAREER
INSTRUCTIONAL AND LEARNING OBJECTIVES:
After completing this chapter, students should have the skills to:
1.1 Spell and define the key words, medical terms, and abbreviations related
to your coding career. (Remember)
1.2 Describe coding, HIPAA-mandated code sets, and coding skills.
(Understand)
1.3 Explain how patient encounters relate to coding. (Understand)
1.4 Describe the types of coding certification. (Understand)
1.5 Summarize the career path and performance expectations for a coding
career. (Understand)
CHAPTER OUTLINE
• What is Coding?
• Understanding Patient Encounters
• Certification
• Coding Careers
RESOURCES
• Student textbook, Chapter 1
• Instructor’s Manual with Lesson Plans
• Chapter 1 PowerPoint Lecture
INSTRUCTIONAL AND LEARNING OBJECTIVES:
After completing this chapter, students should have the skills to:
1.1 Spell and define the key words, medical terms, and abbreviations related
to your coding career. (Remember)
1.2 Describe coding, HIPAA-mandated code sets, and coding skills.
(Understand)
1.3 Explain how patient encounters relate to coding. (Understand)
1.4 Describe the types of coding certification. (Understand)
1.5 Summarize the career path and performance expectations for a coding
career. (Understand)
CHAPTER OUTLINE
• What is Coding?
• Understanding Patient Encounters
• Certification
• Coding Careers
RESOURCES
• Student textbook, Chapter 1
• Instructor’s Manual with Lesson Plans
• Chapter 1 PowerPoint Lecture
CHAPTER 1: YOUR CODING CAREER
INSTRUCTIONAL AND LEARNING OBJECTIVES:
After completing this chapter, students should have the skills to:
1.1 Spell and define the key words, medical terms, and abbreviations related
to your coding career. (Remember)
1.2 Describe coding, HIPAA-mandated code sets, and coding skills.
(Understand)
1.3 Explain how patient encounters relate to coding. (Understand)
1.4 Describe the types of coding certification. (Understand)
1.5 Summarize the career path and performance expectations for a coding
career. (Understand)
CHAPTER OUTLINE
• What is Coding?
• Understanding Patient Encounters
• Certification
• Coding Careers
RESOURCES
• Student textbook, Chapter 1
• Instructor’s Manual with Lesson Plans
• Chapter 1 PowerPoint Lecture
INSTRUCTIONAL AND LEARNING OBJECTIVES:
After completing this chapter, students should have the skills to:
1.1 Spell and define the key words, medical terms, and abbreviations related
to your coding career. (Remember)
1.2 Describe coding, HIPAA-mandated code sets, and coding skills.
(Understand)
1.3 Explain how patient encounters relate to coding. (Understand)
1.4 Describe the types of coding certification. (Understand)
1.5 Summarize the career path and performance expectations for a coding
career. (Understand)
CHAPTER OUTLINE
• What is Coding?
• Understanding Patient Encounters
• Certification
• Coding Careers
RESOURCES
• Student textbook, Chapter 1
• Instructor’s Manual with Lesson Plans
• Chapter 1 PowerPoint Lecture
DETAILED LESSON PLANS
Learning Objective 1.1:
Spell and define the key words, medical terms, and abbreviations related to your
coding career.
Concepts for Lecture:
1. The key terms listed at the beginning of each chapter are important concepts
for students to know, and appear in blue boldface type throughout the
chapter.
2. Students should also become familiar with the terms listed within tables in the
chapter.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
PowerPoint Lecture Slides:
In-Class Activities:
Read the Professional Profile of Jennifer Holland, R HIT, CPC, CIR CC, who is a
coding audit response specialist.
• Discuss the following questions as a class or in small groups:
o What steps did Jennifer take in her career that enabled her to achieve
her goals?
o What advice does she offer to medical coding students?
Learning Objective 1.1:
Spell and define the key words, medical terms, and abbreviations related to your
coding career.
Concepts for Lecture:
1. The key terms listed at the beginning of each chapter are important concepts
for students to know, and appear in blue boldface type throughout the
chapter.
2. Students should also become familiar with the terms listed within tables in the
chapter.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
PowerPoint Lecture Slides:
In-Class Activities:
Read the Professional Profile of Jennifer Holland, R HIT, CPC, CIR CC, who is a
coding audit response specialist.
• Discuss the following questions as a class or in small groups:
o What steps did Jennifer take in her career that enabled her to achieve
her goals?
o What advice does she offer to medical coding students?
DETAILED LESSON PLANS
Learning Objective 1.1:
Spell and define the key words, medical terms, and abbreviations related to your
coding career.
Concepts for Lecture:
1. The key terms listed at the beginning of each chapter are important concepts
for students to know, and appear in blue boldface type throughout the
chapter.
2. Students should also become familiar with the terms listed within tables in the
chapter.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
PowerPoint Lecture Slides:
In-Class Activities:
Read the Professional Profile of Jennifer Holland, R HIT, CPC, CIR CC, who is a
coding audit response specialist.
• Discuss the following questions as a class or in small groups:
o What steps did Jennifer take in her career that enabled her to achieve
her goals?
o What advice does she offer to medical coding students?
Learning Objective 1.1:
Spell and define the key words, medical terms, and abbreviations related to your
coding career.
Concepts for Lecture:
1. The key terms listed at the beginning of each chapter are important concepts
for students to know, and appear in blue boldface type throughout the
chapter.
2. Students should also become familiar with the terms listed within tables in the
chapter.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
PowerPoint Lecture Slides:
In-Class Activities:
Read the Professional Profile of Jennifer Holland, R HIT, CPC, CIR CC, who is a
coding audit response specialist.
• Discuss the following questions as a class or in small groups:
o What steps did Jennifer take in her career that enabled her to achieve
her goals?
o What advice does she offer to medical coding students?
Teaching Notes/Tips:
1. Section One: Foundations of Coding consists of two chapters that lay the
foundation for this course. It acquaints students with the medical coding
field, potential career opportunities, and how coding relates to
reimbursement and payment.
2. The Professional Profile on the section opener page is about a coder who
worked her way up in coding and is now working as a coding audit
response specialist. Many students are interested in the many job
opportunities that are available to an experienced medical coder.
Jennifer’s profile introduces students to one of those future careers and
describes both the professional challenges and the everyday processes
for the coding audit response specialist. Encourage students to identify a
realistic plan that will enable them to achieve professional goals at the
appropriate time in their careers.
3. Refer to Chapter 57 of this text for more information about careers,
professionalism, and patient relations.
Learning Objective 1.2:
Describe coding, HIPAA-mandated code sets, and coding skills. (Understand)
Concepts for Lecture:
1. Coding is the process of accurately assigning codes to verbal descriptions of
patients’ conditions and the health care services provided to treat those
conditions.
1. Section One: Foundations of Coding consists of two chapters that lay the
foundation for this course. It acquaints students with the medical coding
field, potential career opportunities, and how coding relates to
reimbursement and payment.
2. The Professional Profile on the section opener page is about a coder who
worked her way up in coding and is now working as a coding audit
response specialist. Many students are interested in the many job
opportunities that are available to an experienced medical coder.
Jennifer’s profile introduces students to one of those future careers and
describes both the professional challenges and the everyday processes
for the coding audit response specialist. Encourage students to identify a
realistic plan that will enable them to achieve professional goals at the
appropriate time in their careers.
3. Refer to Chapter 57 of this text for more information about careers,
professionalism, and patient relations.
Learning Objective 1.2:
Describe coding, HIPAA-mandated code sets, and coding skills. (Understand)
Concepts for Lecture:
1. Coding is the process of accurately assigning codes to verbal descriptions of
patients’ conditions and the health care services provided to treat those
conditions.
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a. The health care system in the United States uses several distinct systems
of medical codes, called code sets, for different purposes.
b. The various systems were developed by different organizations and follow
different guidelines for their use.
2. Accurate coding requires three major skills: abstracting, assigning, and
arranging.
a. To abstract, coders read the medical record and determine which
elements of the encounter require codes. They identify the reason for the
encounter, diagnostic statements from the physician, complications and
co-existing conditions, and the services provided.
b. To assign codes, coders select codes that accurately describe the
information documented in the medical record and accurately describe the
patient’s condition and services. Locate the Main Term in the Index, then
verify the code in the Tabular List. Each code must reflect the highest level
of specificity possible and contain the correct number of characters for that
code.
c. To arrange codes, coders must organize or sequence codes in a specific
order, based on the official coding guidelines and instructional notes.
Codes that are not sequenced properly are not considered to be correct.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
of medical codes, called code sets, for different purposes.
b. The various systems were developed by different organizations and follow
different guidelines for their use.
2. Accurate coding requires three major skills: abstracting, assigning, and
arranging.
a. To abstract, coders read the medical record and determine which
elements of the encounter require codes. They identify the reason for the
encounter, diagnostic statements from the physician, complications and
co-existing conditions, and the services provided.
b. To assign codes, coders select codes that accurately describe the
information documented in the medical record and accurately describe the
patient’s condition and services. Locate the Main Term in the Index, then
verify the code in the Tabular List. Each code must reflect the highest level
of specificity possible and contain the correct number of characters for that
code.
c. To arrange codes, coders must organize or sequence codes in a specific
order, based on the official coding guidelines and instructional notes.
Codes that are not sequenced properly are not considered to be correct.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
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PowerPoint Lecture Slides for Chapter 1
Tables:
1-1 HIPAA-Mandated Code Sets
Teaching Notes/Tips:
1. Stress that students do not need to memorize individual codes but should
memorize the rules and steps of the coding process.
2. Show students copies of the coding manual for each of the HIPAA-mandated
code sets.
3. The term abstract also describes a task in health information management in
which inpatient coders review the medical record and cull data required for
reporting, such as patient demographics and length of stay.
Homework Assignment:
Coding Practice, Exercise 1.1, What Is Coding?, #1–3
Learning Objective 1.3:
Explain how patient encounters relate to coding. (Understand)
Concepts for Lecture:
1. Coders assign diagnosis and procedure codes to a patient encounter after it
has been completed, based on physician documentation.
2. Patient encounters are generally classified by the location of the encounter
because different coding and billing rules apply to each category.
Tables:
1-1 HIPAA-Mandated Code Sets
Teaching Notes/Tips:
1. Stress that students do not need to memorize individual codes but should
memorize the rules and steps of the coding process.
2. Show students copies of the coding manual for each of the HIPAA-mandated
code sets.
3. The term abstract also describes a task in health information management in
which inpatient coders review the medical record and cull data required for
reporting, such as patient demographics and length of stay.
Homework Assignment:
Coding Practice, Exercise 1.1, What Is Coding?, #1–3
Learning Objective 1.3:
Explain how patient encounters relate to coding. (Understand)
Concepts for Lecture:
1. Coders assign diagnosis and procedure codes to a patient encounter after it
has been completed, based on physician documentation.
2. Patient encounters are generally classified by the location of the encounter
because different coding and billing rules apply to each category.
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a. Outpatient encounters are physician interactions with patients who receive
services and who have not been formally admitted to a health care
institution, such as an acute care hospital, long-term care facility, or
rehabilitation facility.
b. Inpatient encounters are physician interactions with patients who have
been formally admitted to a health care facility, such as an acute care
hospital, long-term care facility, or rehabilitation facility.
3. Each encounter generally involves three steps: diagnosis, treatment, and
documentation.
4. Establishing or updating a diagnosis involves a history, a physical
examination, and testing.
a. Refer to the Guided Example throughout this chapter to learn more about
patient encounters.
b. The Guided Example of a Physician Diagnosis demonstrates how
physicians diagnose conditions.
5. The treatment plan may include medication, surgery, lifestyle changes, or
therapy.
a. Physicians may treat symptoms to provide relief to the patient until they
determine the underlying cause.
b. The Guided Example of a Treatment Plan demonstrates how physicians
determine the treatment plan.
services and who have not been formally admitted to a health care
institution, such as an acute care hospital, long-term care facility, or
rehabilitation facility.
b. Inpatient encounters are physician interactions with patients who have
been formally admitted to a health care facility, such as an acute care
hospital, long-term care facility, or rehabilitation facility.
3. Each encounter generally involves three steps: diagnosis, treatment, and
documentation.
4. Establishing or updating a diagnosis involves a history, a physical
examination, and testing.
a. Refer to the Guided Example throughout this chapter to learn more about
patient encounters.
b. The Guided Example of a Physician Diagnosis demonstrates how
physicians diagnose conditions.
5. The treatment plan may include medication, surgery, lifestyle changes, or
therapy.
a. Physicians may treat symptoms to provide relief to the patient until they
determine the underlying cause.
b. The Guided Example of a Treatment Plan demonstrates how physicians
determine the treatment plan.
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6. When physicians document the encounter, they record the reason they saw
the patient, the diagnostic techniques used, tests or treatments planned, and
their overall assessment of the patient.
a. Physicians may treat symptoms to provide relief to the patient until they
determine the underlying cause.
b. The Guided Example of Documentation demonstrates how the patient
encounter is documented.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
PowerPoint Lecture Slides for Chapter 1
Tables
1-2 Examples of Outpatient Encounters
Teaching Notes/Tips:
1. This text uses the terms “physician” and “provider” interchangeably to refer to
any health care professional who provides services that are billed with I CD-10
codes.
2. Stress that coders do not code for everything pertaining to a given patient.
• Code for the services provided by your employer, such as the hospital, the
surgeon, or the physical therapist.
• Code for the diagnoses that describe why the patient received these
particular services, but do not code for unrelated diagnoses.
the patient, the diagnostic techniques used, tests or treatments planned, and
their overall assessment of the patient.
a. Physicians may treat symptoms to provide relief to the patient until they
determine the underlying cause.
b. The Guided Example of Documentation demonstrates how the patient
encounter is documented.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
PowerPoint Lecture Slides for Chapter 1
Tables
1-2 Examples of Outpatient Encounters
Teaching Notes/Tips:
1. This text uses the terms “physician” and “provider” interchangeably to refer to
any health care professional who provides services that are billed with I CD-10
codes.
2. Stress that coders do not code for everything pertaining to a given patient.
• Code for the services provided by your employer, such as the hospital, the
surgeon, or the physical therapist.
• Code for the diagnoses that describe why the patient received these
particular services, but do not code for unrelated diagnoses.
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• Code for services provided during the encounter, but not for previous
services or planned services.
Homework Assignment:
Coding Practice, Exercise 1.2, Understanding Patient Encounters, #1–3
Learning Objective 1.4:
Describe the types of coding certification. (Understand)
Concepts for Lecture:
1. Certification is a voluntary achievement which documents that a coder has
attained a certain level of proficiency by passing a rigorous examination.
a. Certification is offered by professional organizations and is an additional
step beyond a formal educational degree.
b. Certification is not mandated by the government and is not a legal
requirement.
2. Founded in 1988, A APC has historically focused on physician-based and
outpatient coders.
a. Certified Professional Coder (CPC®) certification focuses on coding of
services, procedures, and diagnoses for physician offices.
b. Certified Professional Coder–Hospital (CPC-H®) certification focuses on
outpatient hospital services.
c. Certified Professional Coder–Payer (CPC-P®) certification focuses on
coding and reimbursement skills needed by payers.
services or planned services.
Homework Assignment:
Coding Practice, Exercise 1.2, Understanding Patient Encounters, #1–3
Learning Objective 1.4:
Describe the types of coding certification. (Understand)
Concepts for Lecture:
1. Certification is a voluntary achievement which documents that a coder has
attained a certain level of proficiency by passing a rigorous examination.
a. Certification is offered by professional organizations and is an additional
step beyond a formal educational degree.
b. Certification is not mandated by the government and is not a legal
requirement.
2. Founded in 1988, A APC has historically focused on physician-based and
outpatient coders.
a. Certified Professional Coder (CPC®) certification focuses on coding of
services, procedures, and diagnoses for physician offices.
b. Certified Professional Coder–Hospital (CPC-H®) certification focuses on
outpatient hospital services.
c. Certified Professional Coder–Payer (CPC-P®) certification focuses on
coding and reimbursement skills needed by payers.
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d. Certified Professional Coder–Apprentice (CPC-A®) certification is for
coders with less than 2 years of experience, or 1 year of experience in
addition to formal education.
3. AHIMA has historically focused on hospital coders.
a. Certified Coding Specialist (CCS) certification focuses on hospital
inpatient and outpatient coding.
b. Certified Coding Specialist–Physician (CCS-P) certification focuses on
physician-based coding.
c. The Certified Coding Apprentice (C CA) credential is geared toward entry-
level coders with little or no job experience.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
PowerPoint Lecture Slides for Chapter 1
In-Class Activities:
1. Invite an AAPC or AHIMA member to talk to the class about certification and
career progression.
2. Refer again to the opening Professional Profile of Jennifer Holland. Discuss
the following questions as a class or in small groups:
• What certifications did Jennifer earn?
• How do you think these certifications helped her reach her goal of moving
upward in her medical coding career?
coders with less than 2 years of experience, or 1 year of experience in
addition to formal education.
3. AHIMA has historically focused on hospital coders.
a. Certified Coding Specialist (CCS) certification focuses on hospital
inpatient and outpatient coding.
b. Certified Coding Specialist–Physician (CCS-P) certification focuses on
physician-based coding.
c. The Certified Coding Apprentice (C CA) credential is geared toward entry-
level coders with little or no job experience.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
PowerPoint Lecture Slides for Chapter 1
In-Class Activities:
1. Invite an AAPC or AHIMA member to talk to the class about certification and
career progression.
2. Refer again to the opening Professional Profile of Jennifer Holland. Discuss
the following questions as a class or in small groups:
• What certifications did Jennifer earn?
• How do you think these certifications helped her reach her goal of moving
upward in her medical coding career?
Loading page 10...
Teaching Notes/Tips:
1. Encourage students to join AAPC or AHIMA and participate in local chapter
meetings.
2. Students are often intensely interested in the details of certification. Refer to
the Web sites of AAPC (www.aapc.com) and AHIMA (www.ahima.org) for
current information on certification requirements for new graduates.
Homework Assignment:
Coding Practice, Exercise 1.3, Certification, #1–3
Learning Objective 1.5:
Summarize the career path and performance expectations for a coding career.
(Understand)
Concepts for Lecture:
1. Students are wise to begin learning about their career path and job
performance expectations for accuracy and productivity.
2. A career path is the progression of jobs and responsibilities throughout one’s
working life.
a. Most coders look for an entry-level job upon graduation in order to gain
basic skills, become familiar with the health care field, and establish
excellent work habits.
b. A mid-level job allows coders to expand their skills, learn new specialties,
assume more independence, and take on more responsibility.
1. Encourage students to join AAPC or AHIMA and participate in local chapter
meetings.
2. Students are often intensely interested in the details of certification. Refer to
the Web sites of AAPC (www.aapc.com) and AHIMA (www.ahima.org) for
current information on certification requirements for new graduates.
Homework Assignment:
Coding Practice, Exercise 1.3, Certification, #1–3
Learning Objective 1.5:
Summarize the career path and performance expectations for a coding career.
(Understand)
Concepts for Lecture:
1. Students are wise to begin learning about their career path and job
performance expectations for accuracy and productivity.
2. A career path is the progression of jobs and responsibilities throughout one’s
working life.
a. Most coders look for an entry-level job upon graduation in order to gain
basic skills, become familiar with the health care field, and establish
excellent work habits.
b. A mid-level job allows coders to expand their skills, learn new specialties,
assume more independence, and take on more responsibility.
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c. After 5 or so years of proven experience, coders can progress to an
advanced-level job, which requires a solid track record of good
performance.
d. When coders are ready to change jobs and advance their careers, they
may seek a new job internally, within their current organization, or they
may choose to look externally, for a job with a different company.
3. Performance expectations are the outcomes employers need coders to
achieve in order to demonstrate competence in the job.
a. Coding jobs have high expectations because securing payment for
services from insurance companies requires a high degree of accuracy
and productivity by coders.
b. The average expectation for coding accuracy areas is 95% to 98%.
c. High levels of speed and accuracy in keyboarding are essential, with
common minimums of 30–40 words per minute (wpm) or 9,000–12,000
keystrokes per hour (ksph).
d. Case production standards, the number of cases to be coded each day,
are based on the type of record being coded; whether coders are
assigning diagnosis codes, procedure codes, or both; whether coders
work from paper or electronic charts; and what other responsibilities, such
as billing, coders do at the same time.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
advanced-level job, which requires a solid track record of good
performance.
d. When coders are ready to change jobs and advance their careers, they
may seek a new job internally, within their current organization, or they
may choose to look externally, for a job with a different company.
3. Performance expectations are the outcomes employers need coders to
achieve in order to demonstrate competence in the job.
a. Coding jobs have high expectations because securing payment for
services from insurance companies requires a high degree of accuracy
and productivity by coders.
b. The average expectation for coding accuracy areas is 95% to 98%.
c. High levels of speed and accuracy in keyboarding are essential, with
common minimums of 30–40 words per minute (wpm) or 9,000–12,000
keystrokes per hour (ksph).
d. Case production standards, the number of cases to be coded each day,
are based on the type of record being coded; whether coders are
assigning diagnosis codes, procedure codes, or both; whether coders
work from paper or electronic charts; and what other responsibilities, such
as billing, coders do at the same time.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
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PowerPoint Lecture Slides for Chapter 1
Tables:
1-3 Examples of Types of Organizations that May Require Coding Skills
1-4 Examples of Job Titles that May Require Coding Skills
1-5 Examples of a Coding Career Path
In-Class Activities:
1. Refer to Table 1-3 Examples of Types of Organizations that May Require
Coding Skills.
2. Discuss the following question as a class or in small groups:
• What are the names of specific organizations in your community that fall
into each category identified in this table? For example, identify the names
of nearby hospitals, physician offices, and clinics.
• If using small groups, divide the list into sections and assign each group a
different section. Combine students’ suggestions into a list to which they
can refer and add as they begin job hunting.
3. Refer again to the opening Professional Profile of Jennifer Holland. Discuss
the following questions as a class or in small groups:
• What was Jennifer’s entry-level job?
• What was Jennifer’s mid-level job?
• What was Jennifer’s advanced-level job?
• How did each job prepare her for the next one?
Tables:
1-3 Examples of Types of Organizations that May Require Coding Skills
1-4 Examples of Job Titles that May Require Coding Skills
1-5 Examples of a Coding Career Path
In-Class Activities:
1. Refer to Table 1-3 Examples of Types of Organizations that May Require
Coding Skills.
2. Discuss the following question as a class or in small groups:
• What are the names of specific organizations in your community that fall
into each category identified in this table? For example, identify the names
of nearby hospitals, physician offices, and clinics.
• If using small groups, divide the list into sections and assign each group a
different section. Combine students’ suggestions into a list to which they
can refer and add as they begin job hunting.
3. Refer again to the opening Professional Profile of Jennifer Holland. Discuss
the following questions as a class or in small groups:
• What was Jennifer’s entry-level job?
• What was Jennifer’s mid-level job?
• What was Jennifer’s advanced-level job?
• How did each job prepare her for the next one?
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Teaching Notes/Tips:
1. In addition to career information provided by your school’s admissions
department and career services department, you also look to coding
instructors for more specific information about the coding and billing
profession.
2. Help students understand that in coding, like most careers, new graduates do
not start at the top; they start at a basic level and work their way up, with
greater responsibility and more skills at each level. Consider sharing
highlights of your own career path as an example.
3. Take time to review Table 1-5 Examples of a Coding Career Path to help
students understand the variety of career opportunities available to them.
4. Stress the importance of strong alphanumeric keyboarding skills. Many
employers require a keyboarding test before they will conduct interviews with
new graduates. If possible, contact your career services department to learn
what keyboarding rates are common for employers in your area.
Homework Assignment:
Coding Practice, Exercise 1.4, Coding Careers, #1–3
CHAPTER 1 REVIEW
Concepts for Lecture:
1. Coding is the process of accurately assigning codes to verbal descriptions of
patients’ conditions and the health care services provided to treat those
conditions.
1. In addition to career information provided by your school’s admissions
department and career services department, you also look to coding
instructors for more specific information about the coding and billing
profession.
2. Help students understand that in coding, like most careers, new graduates do
not start at the top; they start at a basic level and work their way up, with
greater responsibility and more skills at each level. Consider sharing
highlights of your own career path as an example.
3. Take time to review Table 1-5 Examples of a Coding Career Path to help
students understand the variety of career opportunities available to them.
4. Stress the importance of strong alphanumeric keyboarding skills. Many
employers require a keyboarding test before they will conduct interviews with
new graduates. If possible, contact your career services department to learn
what keyboarding rates are common for employers in your area.
Homework Assignment:
Coding Practice, Exercise 1.4, Coding Careers, #1–3
CHAPTER 1 REVIEW
Concepts for Lecture:
1. Coding is the process of accurately assigning codes to verbal descriptions of
patients’ conditions and the health care services provided to treat those
conditions.
Loading page 14...
2. The three skills of an “Ace” coder are abstracting, assigning, and arranging
(sequencing).
3. Coders assign diagnosis and procedure codes to patient encounters after the
encounter is completed.
4. Certification is a voluntary achievement that documents a coder’s having
attained a certain level of proficiency by passing a rigorous examination
offered by AAPC or AHIMA.
5. A career path is the progression of jobs and responsibilities throughout one’s
career.
6. Performance expectations are the outcomes employers need coders to
achieve in order to demonstrate competence in the job.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
Homework Assignment:
Concept Quiz, Completion, #1–10
Concept Quiz, Multiple Choice, #1–10
(sequencing).
3. Coders assign diagnosis and procedure codes to patient encounters after the
encounter is completed.
4. Certification is a voluntary achievement that documents a coder’s having
attained a certain level of proficiency by passing a rigorous examination
offered by AAPC or AHIMA.
5. A career path is the progression of jobs and responsibilities throughout one’s
career.
6. Performance expectations are the outcomes employers need coders to
achieve in order to demonstrate competence in the job.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 1
Homework Assignment:
Concept Quiz, Completion, #1–10
Concept Quiz, Multiple Choice, #1–10
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CHAPTER 2: CODING AND REIMBURSEMENT
INSTRUCTIONAL AND LEARNING OBJECTIVES:
After completing this chapter, students should have the skills to:
2.1 Spell and define the key words, medical terms, and abbreviations relating
to reimbursement. (Remember)
2.2 Describe the types of healthcare payers. (Understand)
2.3 Explain the importance and content of documentation. (Understand)
2.4 Describe the life cycle of an insurance claim. (Understand)
2.5 Summarize the most common reimbursement methods for physicians,
inpatient hospitals, and outpatient hospitals. (Understand)
2.6 Recognize the major healthcare claims formats. (Understand)
2.7 Explain the federal compliance initiatives. (Understand)
CHAPTER OUTLINE
• Healthcare Payers
• Documentation
• Life Cycle of an Insurance Claim
• Reimbursement Methods
• Healthcare Claims
• Federal Compliance
• Health Information Technology
RESOURCES
• Student textbook, Chapter 2
INSTRUCTIONAL AND LEARNING OBJECTIVES:
After completing this chapter, students should have the skills to:
2.1 Spell and define the key words, medical terms, and abbreviations relating
to reimbursement. (Remember)
2.2 Describe the types of healthcare payers. (Understand)
2.3 Explain the importance and content of documentation. (Understand)
2.4 Describe the life cycle of an insurance claim. (Understand)
2.5 Summarize the most common reimbursement methods for physicians,
inpatient hospitals, and outpatient hospitals. (Understand)
2.6 Recognize the major healthcare claims formats. (Understand)
2.7 Explain the federal compliance initiatives. (Understand)
CHAPTER OUTLINE
• Healthcare Payers
• Documentation
• Life Cycle of an Insurance Claim
• Reimbursement Methods
• Healthcare Claims
• Federal Compliance
• Health Information Technology
RESOURCES
• Student textbook, Chapter 2
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• Instructor’s Manual with Lesson Plans
• Chapter 2 PowerPoint Lecture
• Chapter 2 Image Library
DETAILED LESSON PLANS
Learning Objective 2.1:
Spell and define the key words, medical terms, and abbreviations relating to
reimbursement.
Concepts for Lecture:
1. The key terms listed at the beginning of the chapter are important concepts
for students to know, and appear in blue boldface type throughout the
chapter.
2. Students should also become familiar with the terms listed within tables in the
chapter.
3. Supplemental terms that appear in black boldface throughout the chapter are
defined in the glossary.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
Page 13
• Chapter 2 PowerPoint Lecture
• Chapter 2 Image Library
DETAILED LESSON PLANS
Learning Objective 2.1:
Spell and define the key words, medical terms, and abbreviations relating to
reimbursement.
Concepts for Lecture:
1. The key terms listed at the beginning of the chapter are important concepts
for students to know, and appear in blue boldface type throughout the
chapter.
2. Students should also become familiar with the terms listed within tables in the
chapter.
3. Supplemental terms that appear in black boldface throughout the chapter are
defined in the glossary.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
Page 13
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PowerPoint Lecture Slides:
Teaching Notes/Tips:
Point out to students that even if their ultimate jobs do not directly involve billing,
they still want to have a basic understanding of how their work as coders impacts
reimbursement so they can become valuable team members.
Learning Objective 2.2:
Describe the types of healthcare payers.
Concepts for Lecture:
1. Third-party payers are entities other than the patient or physician that pay for
healthcare services. Coders need to understand the various types of third-
party payers because each has separate, and sometimes conflicting, rules
about coding and billing.
2. Health benefit plans funded by federal or state governments are entitlement
programs for which beneficiaries qualify based on specific criteria.
a. Medicare is the single largest payer of healthcare services in the United
States and pays for healthcare services for most people age 65 and over,
people of any age with end-stage renal disease (E SRD), and people with
disabilities. Medicare offers four programs, called Part A, hospital
insurance; Part B, medical insurance; Part C, managed care; and Part D,
prescription drug insurance.
b. Medicaid is a program for low-income families that is funded two-thirds by
the federal government and one-third by state governments.
Teaching Notes/Tips:
Point out to students that even if their ultimate jobs do not directly involve billing,
they still want to have a basic understanding of how their work as coders impacts
reimbursement so they can become valuable team members.
Learning Objective 2.2:
Describe the types of healthcare payers.
Concepts for Lecture:
1. Third-party payers are entities other than the patient or physician that pay for
healthcare services. Coders need to understand the various types of third-
party payers because each has separate, and sometimes conflicting, rules
about coding and billing.
2. Health benefit plans funded by federal or state governments are entitlement
programs for which beneficiaries qualify based on specific criteria.
a. Medicare is the single largest payer of healthcare services in the United
States and pays for healthcare services for most people age 65 and over,
people of any age with end-stage renal disease (E SRD), and people with
disabilities. Medicare offers four programs, called Part A, hospital
insurance; Part B, medical insurance; Part C, managed care; and Part D,
prescription drug insurance.
b. Medicaid is a program for low-income families that is funded two-thirds by
the federal government and one-third by state governments.
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c. Other government programs include Tricare, State Children’s Health
Insurance Program, and the Veteran’s Health Administration.
3. Private health insurance is coverage for healthcare services offered by private
corporations, such as Aetna, Cigna, or United Health Care, and not-for-profit
organizations, such as Blue Cross and Blue Shield.
a. Group health plans are offered by employers and unions, which contract
with a private insurance company to provide a specific list of benefits to
their employees or members.
b. Individual health insurance plans are those that people purchase directly
from a health insurance company, such as people who are self-employed
or do not have benefits through an employer or government program.
c. Workers’ compensation plans pay for medical costs due to employment-
related injuries or illnesses, and vary from state to state.
d. Automobile insurance policies often include medical payments or personal
injury protection, which pays for medical expenses incurred during an
automobile accident.
e. Managed care plans contract with physicians, hospitals, and other
providers to offer services for a lower fee to health plans; then they
contract with private health insurance companies and self-insured plans to
promote an exclusive network of preferred providers
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
Insurance Program, and the Veteran’s Health Administration.
3. Private health insurance is coverage for healthcare services offered by private
corporations, such as Aetna, Cigna, or United Health Care, and not-for-profit
organizations, such as Blue Cross and Blue Shield.
a. Group health plans are offered by employers and unions, which contract
with a private insurance company to provide a specific list of benefits to
their employees or members.
b. Individual health insurance plans are those that people purchase directly
from a health insurance company, such as people who are self-employed
or do not have benefits through an employer or government program.
c. Workers’ compensation plans pay for medical costs due to employment-
related injuries or illnesses, and vary from state to state.
d. Automobile insurance policies often include medical payments or personal
injury protection, which pays for medical expenses incurred during an
automobile accident.
e. Managed care plans contract with physicians, hospitals, and other
providers to offer services for a lower fee to health plans; then they
contract with private health insurance companies and self-insured plans to
promote an exclusive network of preferred providers
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
Loading page 19...
Pages 14–16
PowerPoint Lecture Slides:
In-Class Activities:
Discuss the following questions as a class or in small groups. Consider assigning
each group a different payer to discuss.
• What are the advantages and disadvantages of each type of payer for
physicians or hospitals?
• What are the advantages and disadvantages of each type of payer for
patients?
Teaching Notes/Tips:
It is important that students understand the relationship between coding and
reimbursement. Tailor this part of the lecture to the needs of students. When
students have had reimbursement course(s) previously, a quick review may be
all that is necessary. When students have had little or no previous coursework,
more time will be required.
Homework Assignment:
Coding Practice, Exercise 2.1, Healthcare Payers, #1–3
Learning Objective 2.3:
Discuss the importance and content of documentation.
Concepts for Lecture:
1. Medical necessity is establishing the medical need for services.
PowerPoint Lecture Slides:
In-Class Activities:
Discuss the following questions as a class or in small groups. Consider assigning
each group a different payer to discuss.
• What are the advantages and disadvantages of each type of payer for
physicians or hospitals?
• What are the advantages and disadvantages of each type of payer for
patients?
Teaching Notes/Tips:
It is important that students understand the relationship between coding and
reimbursement. Tailor this part of the lecture to the needs of students. When
students have had reimbursement course(s) previously, a quick review may be
all that is necessary. When students have had little or no previous coursework,
more time will be required.
Homework Assignment:
Coding Practice, Exercise 2.1, Healthcare Payers, #1–3
Learning Objective 2.3:
Discuss the importance and content of documentation.
Concepts for Lecture:
1. Medical necessity is establishing the medical need for services.
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a. Payers establish medical necessity rules to avoid paying unscrupulous
providers who might provide a service just so they could receive
payments, rather than because the patient actually needs the service or
would benefit from it.
2. The medical record is the comprehensive collection of all information on a
patient at a particular facility.
a. The diagnosis and procedure codes reported on the health insurance
claim form or billing statement must be supported by information in the
medical record for each encounter.
b. Documentation is the written or electronic record of medical care and
services provided, and may refer to the overall medical record as well as
to progress notes.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
PowerPoint Lecture Slides:
Tables:
2-1 Examples of Medical Necessity Criteria
2-2 Elements of a Progress Note and Their Use in Coding
2-3 Elements of a Medical Record and Their Use in Coding
Figures:
2-1 Example of a paper-based medical record.
providers who might provide a service just so they could receive
payments, rather than because the patient actually needs the service or
would benefit from it.
2. The medical record is the comprehensive collection of all information on a
patient at a particular facility.
a. The diagnosis and procedure codes reported on the health insurance
claim form or billing statement must be supported by information in the
medical record for each encounter.
b. Documentation is the written or electronic record of medical care and
services provided, and may refer to the overall medical record as well as
to progress notes.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
PowerPoint Lecture Slides:
Tables:
2-1 Examples of Medical Necessity Criteria
2-2 Elements of a Progress Note and Their Use in Coding
2-3 Elements of a Medical Record and Their Use in Coding
Figures:
2-1 Example of a paper-based medical record.
Loading page 21...
2-2 Example of an electronic health record.
In-Class Activities:
Review the examples in Table 2-1. Discuss the following question as a class, in
small groups, or on an online discussion board:
• What are other examples of appropriate and inappropriate medical
services?
Teaching Notes/Tips:
Stress that coders should not manipulate codes in a way that distorts or alters
the diagnoses and procedures as documented in the medical record. Coders
need to be certain they are accurately describing everything that was done for
the patient and the reasons for which the services were provided.
Homework Assignment:
Coding Practice, Exercise 2.2, Documentation, #1–3
Learning Objective 2.4:
Describe the life cycle of an insurance claim.
Concepts for Lecture:
1. Each step involved in converting a patient encounter into a paid insurance
claim needs to be completed in a timely and accurate manner in order for
providers to receive correct payment for their services
2. Although providers do not code or bill for scheduling an appointment, the
appointment begins when providers begin collecting insurance information.
In-Class Activities:
Review the examples in Table 2-1. Discuss the following question as a class, in
small groups, or on an online discussion board:
• What are other examples of appropriate and inappropriate medical
services?
Teaching Notes/Tips:
Stress that coders should not manipulate codes in a way that distorts or alters
the diagnoses and procedures as documented in the medical record. Coders
need to be certain they are accurately describing everything that was done for
the patient and the reasons for which the services were provided.
Homework Assignment:
Coding Practice, Exercise 2.2, Documentation, #1–3
Learning Objective 2.4:
Describe the life cycle of an insurance claim.
Concepts for Lecture:
1. Each step involved in converting a patient encounter into a paid insurance
claim needs to be completed in a timely and accurate manner in order for
providers to receive correct payment for their services
2. Although providers do not code or bill for scheduling an appointment, the
appointment begins when providers begin collecting insurance information.
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3. After completing registration information, a patient sees the physician and/or
receives the treatments and procedures needed. The physician documents
the patient’s problem in a progress note and may check off services and
diagnoses on an encounter form or charge slip.
4. The encounter is coded based on a charge slip or information directly from
the medical record; then the bill is prepared and submitted to the insurance
company.
5. When payers receive electronic claims, the computer system first performs a
front-end edit check, which scans the claims for valid data including the policy
number, patient name, provider number, diagnosis codes, and procedure
codes.
a. A rejected claim is one that is not accepted into the insurance company’s
computer system for processing due to missing or invalid data.
b. Clean claims are those which pass the front-end edit checks and have no
missing or invalid information. Most clean claims are processed using
automatic adjudication, a process in which the computer automatically
determines benefits and payment.
c. Some claims are suspended from the automatic process for manual
review in order to gather more information before payment is determined.
d. After the payer has processed the claim, the provider receives a check or
electronic deposit and an E OB.
e. If payment was denied for one service or for the entire claim, an accounts
receivable specialist needs to investigate the reason.
receives the treatments and procedures needed. The physician documents
the patient’s problem in a progress note and may check off services and
diagnoses on an encounter form or charge slip.
4. The encounter is coded based on a charge slip or information directly from
the medical record; then the bill is prepared and submitted to the insurance
company.
5. When payers receive electronic claims, the computer system first performs a
front-end edit check, which scans the claims for valid data including the policy
number, patient name, provider number, diagnosis codes, and procedure
codes.
a. A rejected claim is one that is not accepted into the insurance company’s
computer system for processing due to missing or invalid data.
b. Clean claims are those which pass the front-end edit checks and have no
missing or invalid information. Most clean claims are processed using
automatic adjudication, a process in which the computer automatically
determines benefits and payment.
c. Some claims are suspended from the automatic process for manual
review in order to gather more information before payment is determined.
d. After the payer has processed the claim, the provider receives a check or
electronic deposit and an E OB.
e. If payment was denied for one service or for the entire claim, an accounts
receivable specialist needs to investigate the reason.
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f. After all insurance payments are received and follow-up is complete, the
office sends the patient a bill for any deductible, coinsurance, or patient
responsibility amounts that have not been paid.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
PowerPoint Lecture Slides:
Tables:
2-1 Coding Problems Causing Rejected or Denied Claims
In-Class Activities:
As a class, or in small groups, create a flow chart that illustrates each step in the
life cycle of an insurance claim. Active participation and visualization help
students understand a complex process.
Teaching Notes/Tips:
1. Point out to students that the billing and coding procedures are not exactly the
same in every office and every hospital, but the general process is similar.
2. A student intern or new coder can bring immense value to an organization by
offering to follow up on problem and unpaid claims. Positive financial results
are almost always seen on claims that are reactivated. In addition, new
coders can learn a tremendous amount about coding and the payment
process by doing insurance follow-up.
office sends the patient a bill for any deductible, coinsurance, or patient
responsibility amounts that have not been paid.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
PowerPoint Lecture Slides:
Tables:
2-1 Coding Problems Causing Rejected or Denied Claims
In-Class Activities:
As a class, or in small groups, create a flow chart that illustrates each step in the
life cycle of an insurance claim. Active participation and visualization help
students understand a complex process.
Teaching Notes/Tips:
1. Point out to students that the billing and coding procedures are not exactly the
same in every office and every hospital, but the general process is similar.
2. A student intern or new coder can bring immense value to an organization by
offering to follow up on problem and unpaid claims. Positive financial results
are almost always seen on claims that are reactivated. In addition, new
coders can learn a tremendous amount about coding and the payment
process by doing insurance follow-up.
Loading page 24...
Homework Assignment:
Coding Practice, Exercise 2.3, Life Cycle of an Insurance Claim, #1–3
Learning Objective 2.5:
Summarize the most common reimbursement methods for physicians, inpatient
hospitals, and outpatient hospitals.
Concepts for Lecture:
1. The healthcare industry uses many different reimbursement or payment
methods for services. The methods vary by type of payer; the setting, such as
physician’s office, outpatient hospital, or inpatient hospital; and the type of
service. It is important to understand the terminology associated with
reimbursement.
a. Fee schedule is a list of services with charges.
b. Negotiated rate schedule or a discounted fee schedule specify lower,
reduced rates, or rates agreed upon by the payer and the type of setting.
c. Prospective payment system (PPS) is a reimbursement method in which
payment is made based on a predetermined fixed amount per case.
d. Medicare uses the inpatient prospective payment system (I PPS).
e. Medicare also uses the outpatient prospective payment system (O PPS).
f. Capitation is a prospective payment system in which physicians are paid a
fixed amount per month for each member assigned to them, regardless of
whether that person requests services.
2. Physician Reimbursement
Coding Practice, Exercise 2.3, Life Cycle of an Insurance Claim, #1–3
Learning Objective 2.5:
Summarize the most common reimbursement methods for physicians, inpatient
hospitals, and outpatient hospitals.
Concepts for Lecture:
1. The healthcare industry uses many different reimbursement or payment
methods for services. The methods vary by type of payer; the setting, such as
physician’s office, outpatient hospital, or inpatient hospital; and the type of
service. It is important to understand the terminology associated with
reimbursement.
a. Fee schedule is a list of services with charges.
b. Negotiated rate schedule or a discounted fee schedule specify lower,
reduced rates, or rates agreed upon by the payer and the type of setting.
c. Prospective payment system (PPS) is a reimbursement method in which
payment is made based on a predetermined fixed amount per case.
d. Medicare uses the inpatient prospective payment system (I PPS).
e. Medicare also uses the outpatient prospective payment system (O PPS).
f. Capitation is a prospective payment system in which physicians are paid a
fixed amount per month for each member assigned to them, regardless of
whether that person requests services.
2. Physician Reimbursement
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a. Physicians are reimbursed based on fee schedules and capitation.
Medicare publishes the Medicare Physician Fee Schedule (M PFS),
updated annually.
b. Medicare uses a resource-based relative value scale (RBRVS) to
establish reimbursement rates.
c. A relative value unit (RVU) identifies the amount of work and expense
involved in providing a particular service.
d. Geographic costs are also factored into the calculation of RBRVS. This is
called a geographic practice cost index (GPCI).
e. Annual conversion factor (CF) is used to calculate the fees.
3. Inpatient Hospital Reimbursement
a. Inpatient hospitals are reimbursed based on fee schedules; per diem
payment (an all-inclusive flat charge per day); and prospective payment.
b. Diagnosis-related groups (DRGs) are the most common prospective
payment system. Hierarchical condition category (HCC) coding further
fine-tunes reimbursement.
c. Best-known DRGs are the Medicare severity-adjusted DRGs (MS-DRGs).
d. Case-based payment means that the rate is determined per case, or per
inpatient admission.
e. Cost outliers are unusual cases in which the cost is above or below a
standard threshold amount established for the D RG.
f. A DRG grouper is software that considers several clinical and
demographic characteristics of a patient.
Medicare publishes the Medicare Physician Fee Schedule (M PFS),
updated annually.
b. Medicare uses a resource-based relative value scale (RBRVS) to
establish reimbursement rates.
c. A relative value unit (RVU) identifies the amount of work and expense
involved in providing a particular service.
d. Geographic costs are also factored into the calculation of RBRVS. This is
called a geographic practice cost index (GPCI).
e. Annual conversion factor (CF) is used to calculate the fees.
3. Inpatient Hospital Reimbursement
a. Inpatient hospitals are reimbursed based on fee schedules; per diem
payment (an all-inclusive flat charge per day); and prospective payment.
b. Diagnosis-related groups (DRGs) are the most common prospective
payment system. Hierarchical condition category (HCC) coding further
fine-tunes reimbursement.
c. Best-known DRGs are the Medicare severity-adjusted DRGs (MS-DRGs).
d. Case-based payment means that the rate is determined per case, or per
inpatient admission.
e. Cost outliers are unusual cases in which the cost is above or below a
standard threshold amount established for the D RG.
f. A DRG grouper is software that considers several clinical and
demographic characteristics of a patient.
Loading page 26...
g. Hierarchical condition category coding (HCC) was developed to estimate
future health risks and costs for Medicare Advantage and inpatients. The
focus is to identify inpatients with chronic, high-cost illnesses, such as
certain types of cancer.
4. Outpatient Hospital Reimbursement
a. CMS OPPS assigns individual services to an ambulatory payment
classification (APC) based on similar clinical characteristics and similar
costs.
b. Private payers may adopt Medicare APCs, modify them, establish their
own, or pay based on individual C PT codes.
5. Reimbursement in other settings includes inpatient rehabilitation hospitals,
ambulatory surgery centers, skilled nursing facilities, home health agencies,
and others.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
PowerPoint Lecture Slides
In-Class Activities:
Discuss the extensive terminology and the acronyms associated with that
terminology.
Discuss the role Medicare and CMS play in establishing fees and
reimbursement.
future health risks and costs for Medicare Advantage and inpatients. The
focus is to identify inpatients with chronic, high-cost illnesses, such as
certain types of cancer.
4. Outpatient Hospital Reimbursement
a. CMS OPPS assigns individual services to an ambulatory payment
classification (APC) based on similar clinical characteristics and similar
costs.
b. Private payers may adopt Medicare APCs, modify them, establish their
own, or pay based on individual C PT codes.
5. Reimbursement in other settings includes inpatient rehabilitation hospitals,
ambulatory surgery centers, skilled nursing facilities, home health agencies,
and others.
Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
PowerPoint Lecture Slides
In-Class Activities:
Discuss the extensive terminology and the acronyms associated with that
terminology.
Discuss the role Medicare and CMS play in establishing fees and
reimbursement.
Loading page 27...
Discuss how important reimbursement is in all medical settings.
Teaching Notes/Tips:
1. Show how a fee is established by multiplying the total RBRVS value for a CP
T code by the annual conversion factor (CF). For example, a conversion
factor of $35 means that an RBRVS value of 1.0 is worth $35 on the MPFS.
A code with an RBRVS value of 0.5 would be worth $17.50. A code with an R
BRVS value of 2.0 would be worth $70. A code with an RBRVS value of 10.0
would be worth $3,500. When Medicare adjusts prices each year, it publishes
a new conversion factor that is applied to all CPT codes.
2. When discussing DRG groupers, be sure to mention the seen variables,
including principal diagnosis, secondary diagnosis, surgical procedures,
complications and comorbidities, age and gender, discharge status, and trim
points. Show the students an example. (An example of a MS-DRG is DRG
375 Digestive Malignancy with Complication or Comorbidity. The MDC for this
DRG is MDC 06 Diseases and Disorders of the Digestive System.)
Homework Assignment
Coding Practice Exercise 2.4, Reimbursement Methods, # 1-3
Learning Objective 2.6:
Recognize the major healthcare claims formats.
Teaching Notes/Tips:
1. Show how a fee is established by multiplying the total RBRVS value for a CP
T code by the annual conversion factor (CF). For example, a conversion
factor of $35 means that an RBRVS value of 1.0 is worth $35 on the MPFS.
A code with an RBRVS value of 0.5 would be worth $17.50. A code with an R
BRVS value of 2.0 would be worth $70. A code with an RBRVS value of 10.0
would be worth $3,500. When Medicare adjusts prices each year, it publishes
a new conversion factor that is applied to all CPT codes.
2. When discussing DRG groupers, be sure to mention the seen variables,
including principal diagnosis, secondary diagnosis, surgical procedures,
complications and comorbidities, age and gender, discharge status, and trim
points. Show the students an example. (An example of a MS-DRG is DRG
375 Digestive Malignancy with Complication or Comorbidity. The MDC for this
DRG is MDC 06 Diseases and Disorders of the Digestive System.)
Homework Assignment
Coding Practice Exercise 2.4, Reimbursement Methods, # 1-3
Learning Objective 2.6:
Recognize the major healthcare claims formats.
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Concepts for Lecture:
1. Providers must submit claims for services to payers to receive
reimbursement. Specific formats or forms are required in each healthcare
setting.
2. After completing registration information, a patient sees the physician and/or
receives the treatments and procedures needed. The physician documents
the patient’s problem in a progress note and may check off services and
diagnoses on an encounter.
3. Physicians bill services on the CMS-1500 form. The electronic format for
claims submission of physician services is the 837P.
a. The National Uniform Claim Committee (N UCC) provides specific
guidelines for completion.
b. Items 1–13 are for patient and insured information.
c. Items 14–33 are for physician or supplier information.
4. Inpatient hospitals bill services on the U B-04, also known as the CMS-1450.
The electronic format is the 837I. The National Uniform Billing Committee (N U
BC) maintains and updates this form.
a. There are 81 form locators or boxes that must be completed. There are
very specific rules that apply to each locator.
b. Instructions to complete the form are found on either www.cms.gov or
www.nubc.org.
5. The UB-04/837I is used to bill the facility portion of outpatient services and
the CMS-1500 is used to bill for professional services.
1. Providers must submit claims for services to payers to receive
reimbursement. Specific formats or forms are required in each healthcare
setting.
2. After completing registration information, a patient sees the physician and/or
receives the treatments and procedures needed. The physician documents
the patient’s problem in a progress note and may check off services and
diagnoses on an encounter.
3. Physicians bill services on the CMS-1500 form. The electronic format for
claims submission of physician services is the 837P.
a. The National Uniform Claim Committee (N UCC) provides specific
guidelines for completion.
b. Items 1–13 are for patient and insured information.
c. Items 14–33 are for physician or supplier information.
4. Inpatient hospitals bill services on the U B-04, also known as the CMS-1450.
The electronic format is the 837I. The National Uniform Billing Committee (N U
BC) maintains and updates this form.
a. There are 81 form locators or boxes that must be completed. There are
very specific rules that apply to each locator.
b. Instructions to complete the form are found on either www.cms.gov or
www.nubc.org.
5. The UB-04/837I is used to bill the facility portion of outpatient services and
the CMS-1500 is used to bill for professional services.
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Teaching Notes
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
PowerPoint Lecture Slides
Figures:
Figure 2-3 Example of a completed CMS-1500 claim form.
Figure 2-4 Example of a completed UB-04 form (with annotations).
In-Class Activities:
Have the students complete a CMS-1500 form based on a patient’s encounter
form.
As a group, have the students complete a U B-04 based on a patient’s hospital
stay.
Teaching Notes/Tips:
1. Electronic standards specify exactly how data is to be submitted, so that
payers’ computers can read the information submitted by providers and
clearinghouses.
2. Discuss the “crosswalk” between the paper form and the electronic format.
3. Go to the website www.nucc.org.
4. Go to www.nubc.org.
5. Carefully review the codes and information that populate the locators on the
form UB-04.
Teaching Resource:
Pearson’s Comprehensive Medical Coding: A Path To Success, Chapter 2
PowerPoint Lecture Slides
Figures:
Figure 2-3 Example of a completed CMS-1500 claim form.
Figure 2-4 Example of a completed UB-04 form (with annotations).
In-Class Activities:
Have the students complete a CMS-1500 form based on a patient’s encounter
form.
As a group, have the students complete a U B-04 based on a patient’s hospital
stay.
Teaching Notes/Tips:
1. Electronic standards specify exactly how data is to be submitted, so that
payers’ computers can read the information submitted by providers and
clearinghouses.
2. Discuss the “crosswalk” between the paper form and the electronic format.
3. Go to the website www.nucc.org.
4. Go to www.nubc.org.
5. Carefully review the codes and information that populate the locators on the
form UB-04.
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Homework Assignment:
Coding Practice Exercise 2.5, Healthcare Claims, #1-5
Learning Objective 2.7:
Explain the federal compliance initiatives.
Concepts for Lecture:
1. In this era of electronic transmissions, it is much easier for payers to track
patterns of billing, compare a physician’s fees with the average or norm, and
target providers who deviate from the norm.
a. If the insurance company or Medicare detects a pattern of overpayments
due to over coding or improper billing, it can conduct an audit.
b. Fraud is knowingly billing for services that were never given or billing for a
service that has a higher reimbursement than the service actually
provided.
c. Abuse is mistakenly accepting payment for items or services that should
not be paid for by Medicare, due to improper coding and billing practices.
d. Compliance means following the rules established by multiple federal,
state, and county government agencies.
2. The Office of the Inspector General is a division of D HHS which investigates
fraud, abuse, and other noncompliance matters in the Medicare and Medicaid
programs.
a. The federal False Claims Act imposes penalties on individuals and
companies that defraud government programs.
Coding Practice Exercise 2.5, Healthcare Claims, #1-5
Learning Objective 2.7:
Explain the federal compliance initiatives.
Concepts for Lecture:
1. In this era of electronic transmissions, it is much easier for payers to track
patterns of billing, compare a physician’s fees with the average or norm, and
target providers who deviate from the norm.
a. If the insurance company or Medicare detects a pattern of overpayments
due to over coding or improper billing, it can conduct an audit.
b. Fraud is knowingly billing for services that were never given or billing for a
service that has a higher reimbursement than the service actually
provided.
c. Abuse is mistakenly accepting payment for items or services that should
not be paid for by Medicare, due to improper coding and billing practices.
d. Compliance means following the rules established by multiple federal,
state, and county government agencies.
2. The Office of the Inspector General is a division of D HHS which investigates
fraud, abuse, and other noncompliance matters in the Medicare and Medicaid
programs.
a. The federal False Claims Act imposes penalties on individuals and
companies that defraud government programs.
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Medicine