October 1997 Bulletin

Accurate coding vital to your practice

Documentation essential to avoid future problems

by Robert B. Connelly

Robert B. Connelly, is a consultant with The Health Care Group®, a national medical practice consultation firm based in Plymouth Meeting, Pa.

Accurate procedure coding for the orthopaedic services you provide is vital to your practice. You can use your procedure codes to assess the services you offer under any managed care contracts you might have, analyze those contracts and check your utilization rates.

But, of course, the main reason to use procedure codes is to submit bills to third-party payers. Accurate billing is essential for two reasons. First, it lets you capture all costs, and thus bill for all services to which you are entitled payment. Second, and most important, accurate, justifiable coding can keep you out of trouble with the federal government.

The Health Care Financing Administration (HCFA) monitors coding. HCFA routinely compares CPT codes with ICD codes to determine whether the treatment the physician applies matches the diagnosis he or she makes.

If there is a Medicare fraud investigation, HCFA's Office of the Inspector General (IG) will subpoena your records and check to see if the notations in your patients' medical charts support your diagnostic codes. HCFA also watches for up-coding or "unbundling."

Naturally, where HCFA leads, other payers follow. Expect all of your insurance companies and HMOs to review your records the same way, for the same reasons.

Don't let your point of view obscure your approach to coding. Some procedure codes may seem unfair to you. You may believe that you are justified in billing for all services you provide, simply to receive fair payment. Thus, from your perspective, it may follow that "unbundling" is synonymous with "doing whatever I've got to do to get paid fairly."

However, as far as HCFA is concerned, "unbundling" is synonymous with "Medicare fraud and abuse." HCFA's IG and the Department of Justice have taken an increasingly aggressive posture in their efforts to eliminate Medicare fraud and abuse.

The courts have been extremely unsympathetic toward physicians who commit Medicare fraud; judges and juries rarely see the physician's point of view with enough clarity to accept it as justification for unbundling.

Codes must match

Change is slow in coming, but there have been improvements. Lobby for more improvements. While you do, make sure your coding is accurate and entirely justifiable.

To start, make sure that you use at least three coding systems in your practice:

Make sure your diagnosis, procedure and materials codes all match all the time.

Understand that, even if you do not use diagnostic codes, HCFA's IG will convert your written diagnoses into ICD codes and then match CPT with ICD code, case by case. All things considered, it is best for you to apply these codes from the beginning.

In every case, the reason established by the diagnostic code must support the action indicated by the procedure code. If it does not, an isolated mismatched claim could be denied for lack of medical necessity. If multiple mismatches exist, you may expect legal action to be taken. Also be aware that Medicare is starting to deny claims if the ICD-9 code (which may have three, four or five digits) has not been carried out to its full specificity. Thus, if it takes five digits to describe a diagnosis, be sure to use all five.


Be certain that every orthopaedist in your practice is committed to accurate coding and to be emphatically involved in the coding process. Fraudulent coding, even accidentally fraudulent coding or down-coding, as opposed to up-coding, can lead to criminal prosecution of the practice's orthopaedists. It is they, not the practice's nonphysicians, who risk discovering all about prison life.

Orthopaedists often perform multiple procedures at the same operative session. Often, it is difficult to get paid for all the work you did at that one time. Insurance companies tend to bundle codes and services together and some orthopaedic practices often resort to unbundling to get paid "fairly." Be careful not to unbundle. Instead, adjust your operating protocols, if you can. When you are reviewing contracts, review the payer's list of unbundled surgical procedures.

Coding and documentation uniformity among a group practice's orthopaedists is essential. No two physicians can be expected to code the same way. Often, physicians disagree on such vital starting points as degree of patient sickness or injury. Thus, inter-doctor agreement upon coding is an impossible code. Rather, each physician should seek to apply coding uniformly and take great pains to ensure that documentation supports all coding. Your payers monitor your practice's records for discrepancies; avoid them. Your practice faces the risk of being forced to pay back funds you received that payers subsequently contest, plus interest and penalties. You also face the possibility of criminal prosecution.

Coding form

Coding forms are fairly easy to complete. Consider drawing up a coding form that includes a list of all services your practice provides, with the correct codes, as a quick coding reference. If you attach the form to the patient's chart, you can complete both simultaneously.

Asking a nonphysician to determine a correct CPT or ICD code invites trouble. You must establish each code and leave no doubt about it, so the staff can perform its job without error.

Appoint one orthopaedist to be in charge of coding education for your group. He or she should attend coding seminars and conferences. Find out whether the Academy and/or your subspecialty societies are offering coding education germane to your practice. Attend, learn and report developments to the other physicians and the practice's nonphysician coding specialist. Be available to answer questions about unusual cases.

Consider using a billing service that takes steps to prevent mismatched coding and associated worries. Just by using a service, you can argue that you are taking significant measures to prevent inadvertent coding problems.

Have a coding expert on your staff. Physicians are ultimately responsible for all coding and must take an active part in the process, but your orthopaedic surgeons must focus first on patient care; thus, you need a nonphysician specialist, who may be your practice administrator, chief billing clerk, or, if your practice is large enough to justify the expense, a staff member with no other responsibilities. He or she will:

Staff coding

Only your orthopaedists should select codes. However, your staff then should enter the information into the system, post the billing and monitor the system.

A scribe can accompany your orthopaedists as they work with patients. The scribe will write down the codes the orthopaedist selects, which allows the orthopaedist to focus on patient care and frees the orthopaedist's hands. Incomplete and/or illegible notes invariably cause problems; a scribe can alleviate this potential problem.


Periodically perform a practice self-audit of your entire coding system. Your coding specialist is the most appropriate person to audit the system. Someone should audit your coding specialist's performance, as well.

Medicare's "E/M Documentation Auditor's Instructions" and forms were published in the March 1996 Medicare Report. CPT1997, Complete Global Service Data for Orthopaedic Surgery and other coding guides are available from the Academy customer service department (800) 346-2267. The Academy also has developed computer software called CodeX to make coding easier.

© 1997 The Health Care Group®

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