Outpatient coding changes cut errors, billing time

‘V’ codes replaced with specifics

Complaints from a radiologist’s office about the generic, too-vague outpatient billing codes they were being sent by St. Joseph Hospital in Augusta, GA, resulted in a new, streamlined procedure that has reduced billing error rates and time-consuming recoding and cut the number of days required to bill rehab patients.

A couple of years ago, radiologists who downloaded outpatient billing information from St. Joseph complained that they couldn’t bill properly with the generic diagnosis codes, known as "V" codes, often used by outpatient registrars, says Loretta Scott, admissions director. V codes are supplemental codes used to deal with situations when a medical visit is not directly due to disease or injury, such as when a patient presents for a vaccination or continuing therapy.

The coding in question at St. Joseph was for routine lab tests and X-rays, she explains, adding that medical records codes all inpatient, emergency department, observation, and day surgery accounts.

"If a patient was coming in for a certain test, like a urinalysis, we would put in a general code that just meant ‘lab,’" Scott explains. "Since the doctor’s office that we send billing information to couldn’t bill with those codes, it was slowing down the process."

Looking at a one-day sample of outpatient codes, patient accounting found that of 135 codes submitted, 68 had to be reworked, she says. Additionally, the changes that patient accounting made didn’t necessarily make it into the computer system, Scott points out.

"We edited the UB92 [billing form], but we didn’t have the time or staff to go into the patient’s computer file and make the changes," adds Betty Barber, St. Joseph’s director of patient accounts. The accounts were corrected in the system only if they had to go through electronic billing.

Coding team reports to JCAHO

To address the coding issues, St. Joseph formed an outpatient coding project team, which later presented its findings to a surveyor from the Joint Commission on Accreditation of Health Care Organizations as an example of the hospital’s performance improvement process.

The team established seven objectives:

1. Have accurate outpatient ICD-9 (diagnosis) codes. The codes being used that begin with a "V" are not valid for physician billing purposes.

2. Eliminate rework resulting from the use of "V" codes.

3. Consider centralizing outpatient coding, which currently is being done in the following departments: admitting, medical records, ambulatory care, business office, rehab therapy, and pathology.

4. Address the issue of how preoperative tests should be coded.

5. Determine the appropriate time required to code and report.

6. Develop a system that ensures that the hospital’s and the physician’s codes are the same for the same test/procedure.

7. Ensure that the hospital is receiving appropriate reimbursement based on the ICD-9 coding.

The team’s data collection included the following steps:

• Track the number of "V" codes that need to be changed for billing vs. the "V" codes that are accepted by insurance carriers. Do so by payer category and report the percentage of changes.

• Create a spreadsheet to track the amount paid vs. the amount that should have been paid to illustrate the differences. Record the variances between coding done by admitting/business office/medical records.

• Find out from the radiology group the number of rebills it needs to generate and the time lost due to inaccurate coding.

• Compare the number of patients who register and have a diagnosis/order form given to them by the doctors with those who do not. Record the number of patients who are scheduled vs. those who walk in.

• Flowchart the departmental processes to clarify how the system currently works so team members can educate each other.

The team recorded these improvements:

ICD-9 codes were corrected for radiology procedures/patients.

"V" codes that are not valid for physician billing were modified to eliminate recoding by physician and billing office.

ICD-9 codes were updated for radiology and laboratory.

Patient registration began entering codes when a computer upgrade was implemented in March 1995. "We were training on a new registration system anyway, so it was a good time to implement the new procedure," Scott notes.

Ambulatory care coding process for recurring rehabilitation patients was revised.

After the team’s examination, patient accounting started a master list of recurring therapy patients that included name, occurrence code, value code (indicating the date the treatment started and number of treatments per month) and gave that information to registrars, Barber says.

"When they preadmitted a recurring therapy patient, all that information was brought forward, where before it was not," she adds. "We maintain the list periodically, as they get new patients."

"V" codes used by the hospital for billing were validated, and their accuracy determined.

The team’s study showed that the general codes were acceptable for lab work paid for by Medicare, which did not require specific diagnoses, Barber explains. Since that time, requirements have changed so that certain tests do require a specific diagnosis, she adds.

Days required to bill rehab patients was reduced to four days from 21-plus days.

Having the diagnosis coded at the time of registration, as mentioned above, cut back on the edits that had to be done by patient accounting, Barber says. Based on 300 recurring therapy accounts, in July 1994, when the project began, only 50% (150) of the accounts were filed within 21 days, while 35% (105) were filed within 39 days, and 15% (45) took more than 60 days.

Within six months, 96% (294) of those accounts were filed within four days, and the other 4% (12) within 13 days. (See chart, p. 46.)

Although the team looked at the possibility of centralizing outpatient coding, it found that was not realistic because of the volume involved and the way the facility is laid out, Scott says. Much of the same benefit has been realized by doing as much of the coding as possible at the point of registration.

"It’s not centralized, but it’s significantly improved," she adds.

Meanwhile, the improved coding has meant less rework for physicians’ offices who receive weekly printouts of the hospital’s radiology activities, Scott notes.