Navigating the Complexities of Outpatient Facility Coding

On our latest episode of Compliance Conversations, we’re taking an in-depth look at the revenue cycle and coding. We’re joined by Stephanie Perry, the outpatient medical supervisor for e4health, as she shares insights from her 12 years of experience in coding, auditing, training, and leadership roles within the healthcare industry.

Tune in to our episode, “Coding Strategies for Successful Revenue Cycle Management,” to understand modifiers, status indicators, and their significance in the reimbursement process. Stephanie sheds light on how coding decisions can either facilitate or hinder the smooth progress of claims through the revenue cycle.

Whether you are a compliance professional, coder, or anyone involved in healthcare revenue cycle management, this episode offers practical insights and tips to enhance your understanding.

Episode Transcript

CJ: Welcome everybody to another episode of Compliance Conversations. My name is CJ Wolf and I am with Healthicity, our sponsor for this podcast, and we talk about compliance issues in healthcare. Today's guest is Stephanie Perry. Welcome, Stephanie!  

Stephanie: Hi, thank you for having me!  

CJ: Yeah, we're excited to have you and we're going to talk a little bit today about revenue cycle and coding with the focus mostly on the facility side, outpatient facility, and those sorts of things.  

But before we jump into our topic, Stephanie, we always love to have our guests just tell us a little bit about themselves. What got you into the line of work you're doing? Or whatever you'd like to share a little bit. About your background.  

Stephanie: I am currently the outpatient medical supervisor for e4health. I have over 12 years of coding experience that includes coding, and auditing. I've been a trainer, and I've worked in denials following up on claims in the rev cycle process. I've done a lot of leadership roles. I have several certifications my mom calls me alphabet soup. I do! I can't stop getting my certs, but just to name a few, if I have a CDEO for my certified documentation expert for outpatient. I'm also AHIMA certified coding specialist with my CSS. I also obtained through AAPC certified outpatient coder for the hospital it used, it's called COC now, it used to be the CPCH-certified professional coder and I also obtained my certified revenue cycle representative certification through HFMA.  

CJ: Nice! Yeah!  

Stephanie: About 12 years and I've crammed a whole bunch of credentials in there.  

CJ: Well, that's awesome! And plus, it's from a wide group of different organizations. You said AHIMA, HFMA, and AAPC, are all wonderful organizations. I also have been coding for over 20, almost 25 years now. I also earned that CPCH and then they changed it on us, right? to the COC.  

Stephanie: I think that one that one was my favorite credential to get. I learned so much doing that. Yes, I learned.  

CJ: That's a really good one, and I remember back in the day. When and maybe, we'll talk a little bit about this. If you feel it's right, CMS instituted the outpatient prospective payment system or OPPS, right? And that was a new thing, at least when I was working 20-some years ago that was a new thing for a lot of the hospitals that I worked for.  

And so, we had a major shift to teaching about how coding is going to affect outpatient facilities and those sorts of things. And so, I'm excited to talk to you because I know you've got a lot of experience in that. In that area as well.  

Stephanie: Yeah, it's fun stuff to me. Yeah, it's shifted to the APC reimbursement for the OPPS. It Changed the game, but it's been there since, I've started 12 years ago.  

CJ: Yeah, exactly. Yeah, it's been there a long time. So, let's just kind of set the stage a little bit and talk about, because you know our audience, we have a lot of compliance professionals. We do have a lot of coders. So, some of the coders might know some of this stuff, but those who come from a compliance background maybe and they don't have a really deep coding background. Could you tell us a little bit about your thoughts on how coding plays such an important role in the revenue cycle? And what role does that play? And why is it so important?  

Stephanie: I absolutely can. I think coding outside of your registration and prior auth all the things you know in the recycle that get you before charge capture and coding and billing, proper or improper coding is going to make or break your claim. So, it kind of stalls, if you have great coding it keeps on going through the revenue cycle process, claim submission into payment with the payers. But if it's incorrectly coded, that's definitely going to stall it. You're looking at timely denials, maybe not getting the proper reimbursement that the facility or the provider deserves because it wasn't coded to this highest level of detail. Coding plays such a huge role. Your use of modifiers will really help that claim just keep going through that process.  

CJ: And you mentioned APCs and you can fill in some of the details as well, but in general OPPS and OPPS is the Medicare methodology and so commercial payers might do things a little differently, but... 

Stephanie: Generally, they generally follow Medicare, most commercial.  

CJ: Yeah, it can vary a little bit and you're right, most payers will follow what Medicare is doing, and billing that CPT code is really what drives those APCs. And then the reimbursement, as opposed to like an inpatient where a lot of facilities are reimbursed off of DRGs, which is basically based on those diagnosis codes, is that basically how you would describe it?  

Stephanie: Yep, that's pretty much how I would describe it. Yeah, your CPTs and HCPCS Codes are, that's what drives your APC.  

CJ: Exactly! And like you said, if you miss code, if you don't code something, you're going to miss revenue. I remember working for the hospital system, this was back before they changed some of the coding, but there were some add-on codes and since this time these add-on codes have just been built into the code description. But years ago, decades ago we had, you know, facilities coding for like a nuke Med procedure, but they failed to code for an add-on code for like some pharmacologic stimulation or something like that, right? And so, they were missing out on those atom codes because they were missing the CPT code. Without the CPT code on the claim, it doesn't map to an APC and you don't get reimbursement. 

Stephanie: And that claim becomes a hard stop, and then you have your denials management, they're coming in trying to figure out, "Hey, what happened to this claim?" and may have to go back to coding, you have another look at it. So, coding it properly the first time based on what you have, your medical record documentation is going to be the driving force to keep that claim going into the rev cycle.  

CJ: Exactly! 

Stephanie: And following those guidelines and knowing, because even with the APC, because we can get in such a lengthy conversation, your APC is driven by your primary service, right? which has a status indicator attached to it. But going further, even though it's on an outpatient claim, your primary diagnosis should match that primary procedure as well to support that at the weight of the APC I guess, because the weight of the APC comes from the resources used by the facility, the area that you're in, they take all of that into consideration and the contract with the payers, which is your allowable amount is with the payer. All of that goes into that APC.  

CJ: And you mentioned the ICD coding; diagnosis coding, that's still really important on the outpatient side because, like Medicare, there are LCDs, right? There are local coverage determinations and if your diagnosis code doesn't support that procedure, you're still going to have problems.  

Stephanie: Right! You want to look for that level of detail in the entire record to support like you said, medical necessity for those outpatients. You could go to the ER and have labs, infusions, injections, and a culture. Maybe you have a UTI. Maybe they reported they had shortness of breath and now they're doing chest X-rays if you're not picking up all of those, you're going to miss payment on those procedures.  

CJ: I'm interested in your experience because in my experience, but again this was 20 years ago, we had different people picking the codes, right? So, like if it was outpatient surgery, we might have HIM coders who actually looked at the record and chose the code. But if it were in, you know, let's say it was an infusion or something we have Charge Masters and sometimes the charge codes will map to a CPT code and so it might be a nurse or somebody who's picking the charge code. Are you still seeing that?  

Stephanie: Yeah, a lot of, I call them à la carte! When I get the claim, it already has your labs on it, your radiology code, your CT scan, your X-rays, Venipunctures, lab draws, all of that, and then I pick up your, either that if it's a surgical cause, I've done all kinds of outpatient. My favourite is same-day surgery. But if I'm your surgical coder, I'm just looking for the surgery. But in the facility for like ED or observation, even though I did not code those labs, they're still on my claim, so I need to go look for medical documentation to support why they did that.  

CJ: Exactly! And those are on the claim from somebody who selected it, usually through a chargemaster, right?  

Stephanie: Chargemaster driven, yep! Those are what we call hard coding.  

CJ: Exactly! And that was my experience is you have to educate, you know, because you're a trained coder, certified coder is picking that surgical code, but now you have to train people who you know coding is not their profession when it's hard coded on the chargemaster you still have to educate folks.  

Stephanie: And help them understand the importance. Because at any point the goal is for pre-registration all the way into claims submission and AR management; posting. You really want that claim just to go through smoothly, right? with no errors, but a lot of times that doesn't happen, and at some point, it gets a hard stop and it takes additional work to figure out why did this deny and it could be because you know a coder didn't pick up something to support that lab or maybe you know any reason. 

CJ: And you know, again, I'm kind of going back to the years that I did this. You know, we had like an internal editor to kind of pick up on some of those things before we drop the claim, right, so that we could make it as clean as possible. Is that a part of the revenue cycle activities that you've seen as well?  

Stephanie: There are like edit teams in place because of a lot of coders when you get the claim, they're just kind of focused on what they're doing. And so, we have like a backup system where we have an edit team in place. So if these hit a denial or in the scrubber, the billing software, when you bill it and it hits an edit, it bounces back to the edit work queue and you go in and say, OK, what are we, we got, you know, you can have a medically unlikely edit and NCCI edit, something is preventing that claim from being what they call a clean claim, so that kind of helps us on the forefront when we're billing it out to try and catch everything, especially if it needs a modifier or something so that it can go, but at the payer level, it still may, if that diagnosis isn't specified or anything, there's not a lot of laterality modifier on the claim it could, or on the procedure, it could bounce back or deny.  

CJ: Yeah, good points. So, let's talk a little bit. I think you mentioned earlier Status Indicators, tell us a little bit about what are those and what role do they play in all of this.  

Stephanie: Yeah, status indicators are a pretty big deal. They are how a particular CPT or Hicks fix code and APC are paid or not paid is a big deal under the outpatient prospective payment system, the OPPS, it's really important to have a clear understanding of what status indicators are and what they mean.  

So basically, a status indicator it could be a number, it could be alphanumeric. It just kind of, Is this payment separately reportable? Will additional payment be received? Does the multiple reduction rule apply? meaning if multiple procedures are done, are they going to be paid at 100%, or is one 100%, and then the next one is 50%? You have your 59, everybody knows about your 59 and your ex-modifier, so you have those status indicators that are put in place to let you know if a modifier is even allowed, so it's really, I think status indicators, that's why I really like getting my COC for the hospital, because a light bulb went off in my head, I was like, "Oh my gosh. This makes so much sense to me." Like, this makes a huge difference. And I'm glad that I know this because now when I look at my claim, I know, you know, pretty quickly with my status indicators. Okay, they should be sequenced first. This is a status indicator of N, not going to pay, not going to pay. And then it drives your modifiers too.  

The important thing about status indicators they can change depending on what procedures were done on the same day as service for that claim. So, you may start off with an E&M level, and they throw laceration repair in there and it may, you may need a 25 modifier now, where before you didn't. So, it really does change the game, especially if the services are done on the same data service on a claim.  

CJ: That's such a great point. Let's talk some more about this right after our break, we're going to take a short break, everybody, and we'll be right back. 

Welcome back from the break. We're talking with Stephanie Perry about revenue cycle, coding predominantly on the outpatient facility side. And we were talking about status indicators before the break. 

Are there still some status indicators that say that something's bundled and so there may be a CPT code for that service, but there's not separate reimbursement it's considered included in something else. Is that concept still exist?  

Stephanie: Yeah, that's your status indicator N, which indicates the services for the payment that you're looking for that has a status indicator of N is already packaged into the primary procedure. But it's still really important to report those codes because you'll still get that status indicator of N as long as you're putting 59, that's a big no no, but you still report those services, so they know like the intensity of a procedure because CMS still needs that information. That's why it's given that status indicator of N. Like all of this goes into the primary procedure, but we're still going to report it, but it will not get any additional payment. So when I see it, the status indicator of N, I think, "No, nothing!" That's how...  

CJ: Yeah, that's a good point. But it's as you mentioned, it's still really important to report because the charge, meaning the dollar amounts will still show up on the claim and as you said CMS is still looking at that data, right? It's important for them, as they set payment rates for APCs and those sorts of things, as I understand.  

Stephanie: Absolutely, yeah.  

CJ: The other thing you were talking about before the break, we're talking about coding like your surgeries and it's interesting what your thoughts are. It's probably unique like the surgical code that you pick is very similar to what the surgeon's going to pick, right? Probably exactly the same, or should be, but as a facility coder, you're probably also looking for, on the claim; supplies, right? Like the doctor's not going to build those supplies because the hospital is the one incurring the expense for those supplies. So, these HCPCS codes and those sorts of things, is that a part of what you're seeing and what you're doing as well?  

Stephanie: Well, they're already present on the claim because those are chargemaster-driven as well. But what I do is I make sure like if it's a device-dependent procedure like you see with like your knee, your total knee arthroplasties or shoulders if it involves any kind of device, I make sure my device is my HCPCS code is there. So, I make sure that every element of it is there, and if I don't see it then I won't complete my coding, I'll send it on to say: "Hey, this is a device-dependent procedure we're missing, you know, blah blah blah device," and it'll come back to me, "Okay, the device has been added, you can complete coding." That's just one example, but there are many where if I don't see that it's fully ready and I just know that, "Okay, this is in a complete picture of what I'm seeing," because that's what your claim essentially is, it paints a picture for the insurance company and it needs to tell a story. And if that story does start to not make sense, that's when we need to pause and say, "Okay, what about this claim? Is it going to, you know, go easily through the revenue cycle?" And you can usually track it back to probably charging a lot of time, the charging department.  

CJ: Yeah! And I think that comes back to like the people who charging or picking the charge code might be kind of an added duty to their job, right? They might be theirs. They might be, you know, so they may be clinically trained or something. And so, it's like making sure that they understand their role in the revenue cycle. Yeah.  

So, if you have a CPT code for replacing a pacemaker pulse generator, replacing leads, or replacing the whole AICD, there should be on the claim that device, because you can't do that procedure without some sort of mechanical device.  

Stephanie: Correct! 

CJ: So that's really interesting like what you said, it's a device-dependent procedure.  

Stephanie: Yeah. And they'll use and they'll use that terminology too, just for like your cement for your arthroplasties or things like that that don't in your mind, you're not thinking device, but you're thinking it is materials too, supplies maybe.  

CJ: And someone has to buy that and it's the hospital and they need to get paid, or at least you need to be identifying what you're using for claims data and that sort of stuff. So, we've talked about, you know, how denials can happen. Are there things that coders can do to help prevent denials that you've seen?  

Stephanie: Absolutely! I think the most important thing a coder can do is stay up to date on their coding guidelines. And as we all know, they change every October 1 the new guidelines are published, and I think staying on top of that, really getting to know what modifiers are and how they can be used, especially the 59 modifier, you don't want to just go all willy nilly with your 59 modifier and X modifiers, right? I like the X modifiers, but the 59 modifier? Yeah, it'll pass, and it'll clear the edit, but does it make it proper to use?  

So really understanding when you tell these insurance companies that this is a separately reportable service, it's identified as a separate procedure like you mean that, and in the documentation, it can be backed up. And there are a lot of rules that go behind using that modifier. Same with your 25 modifiers for your E&M levels, you have to really have the documentation to support it. Even though an edit will be cleared with the modifier, doesn't mean you should use it. So, understanding modifiers, following coding guidelines, and coding clinics that are out there. Oh, they're amazing. I don't know what I would do without coding clinics. Any questions that people before you have and you just really get stuck and believe it or not, there's a lot of answers for a lot of common coding questions. And they even give examples too; in the coding clinics. Status indicators, I know that's maybe new for some people, but like I said it, uh light bulb went off in my head. I was like, oh this makes sense to me.  

CJ: Absolutely! And so, when you were talking about modifiers, you were talking about edits and the main edits are the NCCI edits. Can you explain a little bit about those? What role do they play in coding and revenue cycle?  

Stephanie: So, there's the national correct, NCCI edits, national corrective coding initiative edits, and basically those are column one and column two edits meaning that column two is somehow in a way the system is thinking it's unbundling from that primary procedure. Again, it's not the status indicator N because you really wouldn't get that because the payment would be included. But this is saying, for example, a screening colonoscopy or let's just say a screening colonoscopy turns into a therapeutic or diagnostic, they do a biopsy or they move a polyp. You cannot bill the diagnostic colonoscopy with your biopsy. They're going to hit what's called an NCCI edit and depending on the edit it's going to either allow or not allow a 59 modifier to pass it. Obviously, in this situation, it's inherent, right? A diagnostic colonoscopy would be inherent to your biopsy, so you would not put a 59 modifier on that. You're going to take off that, you're going to code the highest level, which is your biopsy in that situation.  

Stephanie: I was just saying that you have your also medically unlikely edits too as part of the NCCI. So, you have NCCI and then it kind of branches off into CCIs in Medically Unlikely Edits.  

CJ: And the medically unlikely are those are more like units, right? Like not expected you would do more than one of these a day or six of these a day or something, right?  

Stephanie: Yeah! And then with that, you have to justify, if you're billing in excess of units of the maximum number of units allowed, right, then you go into an adjudication indicator, right? So, I think it's a one, two, or three and that depends on like absolute data service. If it's a claim line edit data, it's really tricky when you get into that stuff. But it basically says, can these units be billed if they can, do you want them all on one line? Or do we need to put them on separate lines? The 59 modifier on the second line or 91 for your labs and then you have somewhere they're not going to probably pay at all and I think that's EMI of a three. So, you're going to have to submit medical records with that, so it's like a person comes in and has an EGD and they build 2 units. It's probably not, you probably have a that's highly unlikely for someone to have two EGDs in one day.  

CJ: Right!  

Stephanie: And if you did, we need to know the circumstances behind that.  

CJ: Exactly, like theoretically as possible, right? Like maybe they had one scheduled for the morning. Then they went home, and then all of a sudden, they're starting to cough up blood and they go to the emergency room and they have an EGD done. And so, it's like 2 EGDs on the same day. But that's pretty rare and unlike. 

Stephanie: Exactly! So, you have to say why was it necessary for us to go beyond the allowable amount? And then if you know and follow your adjudicator accordingly because some you can you can bill them out on separate lines and put your modifier on the second line some, they just want all of the units or the charge amount rolled into one line and update the units. So, there are different ways to handle that.  

CJ: Yeah, and with Modifier 59 and the NCCI edits. I remember working with department leaders and they would, you know, I try to teach them about these column one, column two, and then the indicator, and sometimes there's an indicator of zero; meaning no modifier will bypass the edit and sometimes it says one and they're like, "Oh, it says one we could use it," I said, "You could only use it when it's appropriate to use. It doesn't mean you could always just use it like you were saying." You just don't want to be slapping on the 59 or those X modifiers, just so you can bypass and that is it and get reimbursed.  

Stephanie: Right! That's you're opening up a world of rack audits and all kinds of stuff, you just start putting that 59 on there.  

CJ: Exactly! But then again, on the other side, there may be times when it's appropriate, like if you have a lesion on your right arm and the skin and you're biopsying that one, but you're excising the lesion on the back. So, they're two separate lesions in those cases, the excision, and the biopsy, it's appropriate, but you need a modifier to say these were separate lesions.  

Stephanie: Correct! Absolutely! There are definitely situations where 59 is warranted and useful.  

CJ: Yeah, it just takes training people and making sure they understand and then doing audits, right? Like it's always you can train people, but then it's probably always a good idea just every now and then, and I tell a lot of people this; "Just randomly check every now and then 10 times their claims where 59 modifier was used, or 25 modifier and then just look at the medical records and make sure that it's really substantiated, make sure...  

Stephanie: Yeah!  

CJ: It's Because I also come from a compliance background. And as you mentioned, rack audits and others, this is how these multimillion settlements come about and people just use the modifier and they think; "Oh, it says that's a one in that column, that means I can use the modifier." No, that means you can use it when clinically appropriate.  

Stephanie: Yeah, you still have to have documentation to support it, all of it.  

CJ: Exactly! Well, you know, Stephanie, we could talk all day. We are getting kind of towards the end here. We have a couple more minutes. Any other thoughts or ideas on revenue cycle, coding, or just outpatient facility kind of revenue cycle in general, or anything that we didn't talk about that you think would be good for our listeners? 

Stephanie: Revenue codes maybe I was thinking about that earlier we were talking about chargemaster-driven codes, just a little bit about revenue codes. The revenue codes are linked to the department where they receive the services. So, when you see a claim and you have revenue 250, Revenue Code 250 and 450 and 361, 750, when that claim, those are all linked to a department within that hospital, right? So, 450 is your ER, your 316, and your 361 those either your major OR, your minor OR. When that claim pays at the payer level, whatever the allowable amount is for whether there is a reimbursement or not when that check gets in it goes back to those departments.  

And a lot of times it's helpful for me if I when I open up a claim, especially an emergency room claim, I know I'm supposed to Co-diagnosis and in my infusions and injections, but I'll go look, I go look at that chargemaster because I want to get a full picture, so I think it's really helpful for coders that want to dig in a little bit more, familiarize yourself with those revenue codes, because it'll start making more sense. "Okay, pharmacy drugs are your two 50s. Self-administered drugs are your 636." You have your radiology and your labs, so revenue codes also play an important role, I think.  

CJ: Yeah! And while we're just maybe we end with this. So, revenue codes are on a different kind of claim that gets submitted versus a physician claim is a 1500, these are the fourteen fifties, right, or the old UBs, is that still the case?  

Stephanie: Yeah, the UBO4.  

CJ: So, it's a different-looking claim, you could actually just Google it, I think and you can get images where you could see it, and what Stephanie just said is, you know, there's a place for the HCPCS code, there's a place for the units, there's a place for modifiers, and then there's a place that says Revenue Code. And so that has to deal, like with just what you were saying about, you know, where is that revenue going to be allocated more or less.  

Stephanie: Right, yep!  

CJ: Well, Stephanie, thank you so much for sharing all your knowledge. This has been wonderful. We really appreciate your experience, the tips, and the explanations that you shared.  

Stephanie: No, thank you for having me! I've had a blast. This is really fun. I love this kind of stuff. I'm glad I was able to be on your podcast. It's pretty cool.  

CJ: Yeah, I'm so grateful that you were able to be on as well. Thank you so much! And thank you to all our listeners for listening to our episodes. If you like these please hit like and share and do all those good things to kind of spread the word, if you will. If you have colleagues that you think this topic would be good for, send it their way. And if you have ideas for topics, for future episodes we love to hear those. So don't be shy, let us know if you know of people who might make good guests, we always are interested in entertaining that as well. So again, thank you again for listening to this episode of Compliance Conversations until next time. Have a great day!