Part IV — HCPCS, Edits, and the Price of a Service

Chapters 20–23

At the end of Part III you had a set of codes that accurately describe what happened. That is not the same thing as a set of codes that will be paid, and the gap between those two states is where a great many new coders lose their footing.

Three things stand between an accurate code and a paid one, and Part IV is one chapter for each, plus the chapter that explains what the code is worth in the first place.

Chapter 20 adds the second code set. CPT does not have a code for a wheelchair, a knee brace, an ambulance ride, or forty milligrams of methylprednisolone acetate. HCPCS Level II does. The chapter covers the letter families, the J-codes and the dosage-in-the-descriptor problem that produces more unit errors than any other single cause, discarded drug and the JW and JZ modifiers, durable medical equipment, the Medicare-only G-code vocabulary, and the situations where CPT and HCPCS both have a code and you have to know which payer wants which.

Chapter 21 is the edit file. The National Correct Coding Initiative publishes, quarterly, a list of code pairs that may not be billed together and a list of maximum units per code per day. It is free, it is public, and it is the single most useful document in outpatient billing that most billers have never opened. The chapter teaches procedure-to-procedure edits, Column One and Column Two, the modifier indicator that says whether an edit may be overridden at all, medically unlikely edits and their adjudication indicators, and the NCCI Policy Manual's actual language about standards of medical and surgical practice. Then it works the shoulder claim from Chapter 17 edit by edit and shows how a billing macro turned a coding shortcut into a False Claims Act exposure across forty-two claims.

Chapter 22 is medical necessity, and it opens by insisting on a distinction the whole industry blurs: medical necessity is a coverage word, not a clinical one. A service can be clinically appropriate, professionally indicated, and exactly what the patient needed, and still not be medically necessary in the sense the payer means — which is the only sense that determines payment. The chapter covers national and local coverage determinations, how to find the policy that actually governs your claim, diagnosis linkage, frequency limitations, the Advance Beneficiary Notice and the circumstances in which issuing one is improper, the GA/GX/GY/GZ modifiers, and commercial prior authorization.

Chapter 23 answers the question the reader has been carrying since Chapter 1: where did \$128.40 come from? Relative value units and their three components, geographic adjustment, the conversion factor, the site-of-service differential, and how a fee schedule is built from them. Then the other side: how a practice sets its charges, why the charge is almost meaningless, what a hospital chargemaster is, where charges are lost before they are ever billed, and what gross and net collection rates each conceal.

By the end of Part IV you will know, for every line of Account 10-4471, what it is worth, whether it may be billed alongside the others, and whether the payer considers it necessary. You will also know that the answer to the third question was available for free, in advance, in a document nobody in the practice had read.

The perennial warning, in its sharpest form. Everything in this part is on a revision schedule. HCPCS Level II changes quarterly. NCCI edits change quarterly. MUE values change quarterly. The conversion factor, the RVU file, and every fee schedule change annually, by rule, and sometimes mid-year by legislation. Local coverage determinations change continuously.

Every figure in these four chapters is constructed for teaching and labeled. Learn how the arithmetic works. Then go get today's numbers.

The themes Part IV carries

You code from the chart, but you get paid by the contract. Chapter 23 is this theme with the arithmetic shown.

A clean claim is a fast claim. Chapters 21 and 22 are both, in the end, about knowing the rule before you submit rather than after you are denied.

Chapters in This Part