Outpatient Coding Conundrums

April 10, 2018 1:22 pm

Physician practice staff should receive training on connecting diagnoses and procedure codes.

Question: We recently received a denial for a surgery performed in our outpatient surgery center because the diagnosis and procedure codes submitted for the procedure did not match those that were preauthorized. The surgeon’s office scheduled the surgery with the diagnosis code we submitted, but we coded the procedure based on the surgeon’s operative report. How can we avoid this situation during outpatient surgery coding?

Answer: Surgeons and hospitals should have a symbiotic relationship when it comes to billing for outpatient surgeries performed in outpatient surgery centers. However, each party bills separately for their part of the process. Surgeons bill for procedures performed, and outpatient surgery centers bill for resources used in operating rooms.

Furthermore, coding and billing processes for outpatient surgeries are performed separately. There is no coordination between surgeons’ offices and outpatient surgery center coding/billing teams. Ideally, both parties submit the same diagnoses and procedure codes for the services provided—but variances often occur. When the codes on the claims submitted by surgeons and outpatient surgery centers are not in agreement, one or both claims may be denied. This can be stressful for all involved—patients, surgeons, and outpatient surgery center staff.

Awareness of the following issues can mitigate code mismatches between surgeons’ offices and outpatient surgery centers.

Lack of communication. Although outpatient surgery center staff receive diagnoses codes used to obtain procedure authorizations, they rarely know what procedure codes were submitted by surgeons’ offices. The outpatient surgery center staff code procedures based on surgeons’ documentation in the records. Depending on the acumen of the surgeons’ coding staff, codes selected and submitted to payers may not match those submitted by outpatient surgery centers.

Insurance coverage changes. Some insurance companies may require preauthorizations for certain procedures while others do not. This can be confusing for physician office staff, especially if patients’ coverage changes.

For example, a surgeon’s office calls insurance company A to obtain authorization and is notified that no preauthorization is required for the specified procedure. However, prior to the surgery, the patient’s insurance changes to company B. Insurance company B does require preauthorization for the procedure. The patient forgets to notify the physician’s office staff of the change, so a required preauthorization is not obtained.

As a result, the office bills company A and receives a claim rejection. The practice contacts the patient and is informed of the new insurance coverage. When the office staff contacts company B, they are told that preauthorization is required and that retrospective authorizations are not issued. So, the claim is denied.

Diagnostic procedures. During diagnostic procedures, surgeons determine what must be done once surgeries begin. In these cases, there are strong possibilities procedure codes used to authorize procedures will not match codes submitted for performed procedures.

Wrong codes submitted. In some instances, office staff submit wrong diagnosis and/or procedure codes when obtaining preauthorizations. In many physician offices, preauthorization processes are performed by clerks who have limited coding knowledge. The clerk may not understand which procedures are to be performed and what information is required for correct code assignments.

Disconnects between diagnoses and procedures. Physician practice clerical staff may not understand the need to connect diagnoses and procedure codes. In some cases, diagnoses codes submitted are accurate, but procedure codes are not. Also, authorizations may be obtained for different, unplanned procedures. Here are three tips to consider:

  • Educate physician practice clerks to make sure they understand the connections between diagnoses and procedure codes.
  • Ensure clerks can discern when procedures do not match diagnoses.
  • Establish clear policies, and if disconnects occur, clerks should ask surgeons for clarifications.

Outdated cheat sheets. Some office staff use “cheat sheets” to select codes when completing authorization processes. While intended as efficient tools for front-end clerks, cheat sheets can lead to back-end denials if not managed properly. To avoid inaccurate code submissions for preauthorizations, routinely review and update sheets to coincide with annual updates to ICD-10 and CPT codes.

Extended surgeries. Sometimes surgeons initiate surgeries and discover the need for further interventions. These increases in levels of care do not usually present issues. If preauthorizations were accurately submitted for the intended procedures, and surgeons clearly document both original intents and reasons for changes, code changes on the claims should be accepted and paid.

Level Up Knowledge to Mitigate Risk

Physicians should be mindful of who is submitting codes on their behalf. Practices need people who fully understand what procedures are planned, the importance of correct diagnoses and/or procedure codes, and the process of securing insurance company authorizations or precertifications.

Transitioning the responsibility to coding professionals or staff with coding training could be a valuable move. Coding professionals understand the connections between diagnoses and procedures and the importance of ensuring correct codes are submitted to obtain proper certifications or preauthorizations.


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