Medical Billing & Coding for Dummies

The definitive guide to starting a successful career in medical billing and coding

With the healthcare sector growing at breakneck speed—it’s currently the largest employment sector in the U.S. and expanding fast—medical billing and coding specialists are more essential than ever. These critical experts, also known as medical records and health information technicians, keep systems working smoothly by ensuring patient billing and insurance data are accurately and efficiently administered.

This updated edition provides everything you need to begin—and then excel in—your chosen career. From finding the right study course and the latest certification requirements to industry standard practices and insider tips for dealing with government agencies and insurance companies, Medical Billing & Coding For Dummies has you completely covered.

• Find out about the flexible employment options available and how to qualify
• Understand the latest updates to the ICD-10
• Get familiar with ethical and legal issues
• Discover ways to stay competitive and get ahead

The prognosis is good—get this book today and set yourself up with the perfect prescription for a bright, secure, and financially healthy future!

Karen Smiley, CPC, is a certified, multi-specialty coding expert in physician and outpatient reimbursement. With an extensive background as a coder, auditor, accounts receivable manager, and practice administrator, she has also served as an independent consultant to physician practices and as an assistant coding instructor.

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 2

Beyond the Book 3

Where to Go from Here 3

Part 1: Getting to Know Medical Billing and Coding 5

Chapter 1: Dipping Your Toes into Medical Billing and Coding 7

Coding versus Billing: They Really Are Two Jobs 8

Following a Day in the Life of a Claim 9

Keeping Abreast of What Every Biller/Coder Needs to Know 10

Complying with federal and state regulations 10

Learning the lingo: Medical terminology 11

Demonstrating medical necessity 11

Deciding Which Job Is Right for You 11

Examining your workplace options 12

Thinking about your dream job 12

Prepping for Your Career: Training Programs and Certifications 13

Previewing your certification options 13

Going back to school 14

Planning for the Future 15

Chapter 2: Exploring the Billing and Coding Professions 17

Looking at the Medical Coding Job 18

Verifying documentation 18

Following up on unclear documentation 21

Assigning diagnosis and procedure codes 21

Transforming visits into revenue 22

Determining whether medical coding suits you 23

Breaking Down the Medical Biller’s Job 23

Knowing the payers and keeping up on their idiosyncrasies 24

Billing each payer correctly 25

Checking the claim over prior to submission 27

Assessing whether medical billing is the right choice for you 27

In Tandem: Working Together or Doing Both Jobs Yourself? 28

Wearing both hats 28

Deciding which job is for you 29

Chapter 3: Weighing Your Employment Options 31

Choosing Your Environment: Doctor’s Office, Hospital, and Others 32

The doctor is in: Working in a physician’s office 33

Hooking up with a hospital 33

Focusing on a billing or practice management company 34

Processing claims for an insurance company 35

Considering the best of the rest 36

Getting your foot in the door 36

Remote Access: Setting up Off-Site 37

Working in your PJs 37

The no-commute commute: Arranging a suitable workspace 38

Looking at the downside of working remotely 38

Reviewing Other Work Options: Freelancing, Temping, and More 39

Heeding a Word of Advice for New Coders 40

Part 2: Boning Up on the Need-to-Knows of Your Profession 43

Chapter 4: Compliance: Understanding the Rules 45

You Rule! Meeting the Rule Makers 46

The Centers for Medicare & Medicaid Services (CMS) 46

The Office of Inspector General (OIG) 47

The individual payer (insurance company) 47

Complying with HIPAA 48

Doing your part: Do’s and don’ts of compliance 49

Uh-oh! Facing the consequences of non-compliance 53

Unbundling the Compliance Bundle 53

Looking at incidental procedures 54

Identifying when separately reporting is okay 54

Recognizing when unbundling’s not okay 55

Defining exclusivity 55

Getting the Most out of the Dreaded Audit 57

Distinguishing between internal and payer audits 58

Guarding against an RAC audit 58

Avoiding an audit: You can’t 59

Protecting yourself from an audit 59

Chapter 5: Not-So-Strange Bedfellows: Medical Terminology and Medical Necessity 61

Brushing Up on Basic Anatomy 62

Getting familiar with body systems 62

Getting a handle on illness and disease 64

Encountering injuries 64

Say What? Deciphering Medical Terminology 65

In the beginning: Knowing your prefixes 65

Sussing out the suffixes 67

Eureka! Putting them together 67

Understanding Medical Necessity 69

Scrubbing In: Proving Medical Necessity for Surgical Procedures 70

Checking out endoscopic procedures 70

Examining open surgical procedures 73

Understanding incidentals and when procedures can be separately reported 75

Using billing modifiers 75

Connecting with the World of Evaluation and Management Codes 76

Looking at what happens during the run-of-the-mill E&M visit 77

Visiting the office 78

Visiting the hospital 80

Dealing with consultation visits 82

Determining the level of billable service 83

Chapter 6: Getting to Know the Payers 85

Wading through Commercial Insurance Payers 86

Identifying the carriers 87

Tuning in to networks 89

Choosing third-party administrators 89

Medicare: Meeting the Chief Government Payer 90

Examining Medicare, part by part 91

Looking at Medicare supplement policies 93

Coding and processing Medicare claims 94

Working with Other Government Payers 95

Patient Protection and Affordable Care Act (ACA) 95

Medicaid 96

Tricare (Department of Defense) 98

CHAMPUS VA (Department of Veterans Affairs) 99

Office of Workers’ Compensation Programs (Department of Labor) 100

Part 3: Becoming a Professional: Getting Certified 103

Chapter 7: Your Basic Certification Options, Courtesy of the AAPC and AHIMA 105

Introducing the Two Main Credentialing Organizations: AAPC and AHIMA 106

Going with AAPC 106

Choosing AHIMA instead 106

Being a joiner: The benefits of membership 107

Joining one or both: The pros and cons of multiple membership 107

Looking at the Basic Certifications 108

AAPC and its basic certifications: CPC, COC, CPC-P, CIC 108

AHIMA and its basic certifications: CCA, CCS, CCS-P 110

Choosing the Certification That’s Right for You 111

Examining the educational requirements 112

Prioritizing your career needs 112

Seeing what employers in your area want 113

Examining the Exams: A Quick Review of the Main Tests 113

The CPC exam (AAPC) 114

The CCS exam (AHIMA) 116

The CCA exam (AHIMA) 117

Chapter 8: The Path to Certification: Finding a Study Program 119

The Big Picture: Thinking about Your Degree and Career Objectives 120

Prioritizing your career needs 120

Determining what kind of program better meets your needs 121

Deciding whether you want to pursue a degree 122

Considering the Time Commitment 122

Planning for your time-to-degree 122

Anticipating your day-to-day schedule 124

First Things First: Squaring Away Your Prerequisites 125

Preparing for your training program 125

Getting ready for the certification test 126

Picking a Program of Study 127

In your backyard: Community college 128

Vocation station: Technical school programs 130

Clicking the mouse: Online training 133

Caveat Emptor: Watching Out for Diploma Mills 136

Chapter 9: Signing Up and Preparing for the Certification Exam 139

Establishing a Study Routine and Strategy 139

Setting up your own space 140

Clearing your calendar for study 141

Developing a study strategy 141

Focusing on the Right Topics 142

Identifying body systems 143

Understanding medical terminology 148

Boning up on insurer and payer rules 150

Preparing Yourself for Test Day 151

Finding ways to stress less 151

Knowing how to use your resources 152

Signing Up for and Taking the Big Test 153

Taking a quick peek at the exam 154

Making the grade — or not 156

Tackling test-taking tips 156

Chapter 10: Adding Street Cred: Specialty Certifications and Continuing Ed 159

Introducing Specialty Certification Options 160

Eyeing AAPC trademarked certifications 160

Showing off specialty AHIMA certifications 160

Perusing the best of the rest 165

Building on Your Cred with Continuing Education 166

Adding up the continuing ed units (CEUs) 166

Earning the units you need 167

Digging up complimentary CEU resources 167

Getting the most bang for your buck with CEUs 168

Part 4: Dealing and Succeeding with Nitty-Gritty On-the-Job Details 171

Chapter 11: Processing a Run-of-the-Mill Claim: An Overview 173

Dreaming of the Perfect Billing Scenario 173

Completing the initial paperwork 174

Getting the documentation about the patient encounter with the provider 175

Entering the codes into the billing software 175

Show me the money! Letting the payer take its turn 176

Delving into the Details: Contract Specifics 177

Understanding who’s contracting whom? 177

Looking at standard contracts 178

Cutting through reimbursement rates and carve-outs 179

Covering Your Bases: Referrals and Preauthorization 179

Checking for referrals 180

Dealing with prior authorization 180

Tracking Your Claim from Submission to Payment 182

Working with billing software 182

Passing from provider to clearinghouse 183

 And going on to the payer 185

Scoring the payment or going into negotiation 186

Fighting for Proper Payment: Filing an Appeal with the Payer 188

Chapter 12: Homing In on How to Prepare an Error-Free Claim 191

Assigning CPT Codes 192

Getting the lowdown on CPT codes and fee schedules 192

Knowing the rules governing which codes you can use 193

Linking your CPT codes to ICD-10-CM codes 194

Making your code as specific as possible 194

Paying attention to your bundle of joy 197

Applying Modifiers Correctly 199

Using modifiers for commercial payers 200

Managing modifiers for Medicare 201

Utilizing modifiers for other government payers 201

Using retired modifiers 202

Looking for Money Left on the Table 203

Turning a critical eye to the record 203

Overriding published edits 204

Setting the record straight: Physician queries 204

Checking and Double-Checking Your Documentation 206

Chapter 13: From Clearinghouse to Accounts Receivable to Money in the Pocket 209

Spending Time in the Clearinghouse 210

Scrub-a-dub-dub: Checking for errors 210

Matchmaker, matchmaker: Sending the claim to the right payer 210

Generating reports 211

Facing Factors Affecting Reimbursement Amounts 211

Understanding relative value units 211

Prioritizing procedures 213

Payment or Denial: Being in the Hands of the Payer 214

Reducing your time in accounts receivable 214

Overcoming rejection 216

Dealing with denial 216

Breaking Down the Remittance Advice 217

Getting familiar with the RA 217

Meshing the COB with the RA 218

Surveying subrogation 219

Chapter 14: Handling Disputes and Appeals 221

Dealing with Disputes Involving Contract and Non-Contracted Payers 221

Contract payers 222

Non-contracted payers 223

Knowing When to File an Appeal: General Guidelines 223

When general follow-up doesn’t yield a timely payment 224

When mix-ups in accounts receivable result in a delay 224

The Art of the Appeal: Understanding the Basics before You Begin 225

Recognizing who you’re dealing with 225

Knowing what to say and what not to say 226

Using the resources at your disposal 227

Going through an Appeal, Step by Step 228

Making the initial call 228

It’s in the mail: Composing an appeal letter 229

On the phone again: Following up when the check doesn’t arrive 232

Maxing out your appeals 234

Appealing Medicare Processing 236

Request for redetermination 236

Qualified Independent Contractor (QIC) reconsideration 236

Administrative Law Judge (ALJ) Hearing 237

Medicare Appeals Council and Judicial Review 238

Appealing a Workers’ Comp Claim 240

Chapter 15: Keeping Up with the Rest of the World 241

WHO’s on First: Providing Data to the World Health Organization 242

Charting Your Course with ICD 243

Understanding the differences between ICD-9 and ICD-10 244

Working on the 5010 platform 246

Moving beyond ICD-10 246

Part 5: Working with Stakeholders 249

Chapter 16: Dealing with Commercial Insurance Claims 251

Meeting Commercial Insurance 251

Noting big names in commercial insurance 252

Working with the major players 253

Cashing In with Commercial Payers 254

Determining reimbursement 254

Weaving through the ins and outs of pricing networks 255

Getting paid in- and out-of-network 257

Working your way around workers’ comp carriers 258

Finessing third-party administrators 259

Knowing What’s What: Verifying the Patient’s Plan and Coverage 261

Looking at the insurance card 261

Contacting the payer and/or network 262

Chapter 17: Caring about Medicare and Medicaid 263

Brushing Up on Medicare Basics 264

Working with Medicare Claims 264

Getting Medicare-approved 265

Processing Medicare claims 266

Deciding What Gets Paid 266

Going from local to national decision-making: LCDs and NCDs 266

Using an advance beneficiary notice (ABN) 267

Tracking the guidelines: The Medicare Coverage Database 268

Working with Medicare Contractors 269

Submitting your claims 269

Getting along with your Medicare rep 270

Doing Business with Medicare Part C Plans 270

Paying attention to plan differences 270

Turning to Uncle Sam for a helping hand 271

Verifying Coverage and Plan Requirements 271

Confirming plan specifics 272

Obtaining referrals and prior authorizations 273

Oops! Getting referrals and authorizations after the fact 274

Chapter 18: Coding Ethics: Being an Advocate for Your Employer 275

Playing the Part of the Professional Medical Biller/Coder 276

Dealing with patients 276

Working with payers 278

Providing positive feedback to colleagues 280

Protecting Yourself and Your Integrity 281

Surviving a sticky situation 281

Documenting your day 283

Mum’s the word: Keeping patient info private 284

Keeping yourself honest when you make a mistake 287

Getting the Most Bang for Your Client’s Buck — Honestly 287

Collecting payments from patients 287

Avoiding accusations of fraudulent billing 288

Part 6: The Part of Tens 291

Chapter 19: Ten Common Billing and Coding Mistakes and How to Avoid Them 293

Being Dishonest 293

Shifting the Blame 294

Billing More than Is Documented 294

Unbundling Incorrectly 294

Ignoring an Error 295

Mishandling an Overpayment 295

Failing to Protect Patients from Out-of-Network Penalties 296

Failing to Verify Prior Authorization 296

Breaking Patient Confidentiality 297

Following the Lead of an Unscrupulous Manager 297

Chapter 20: Ten Acronyms to Burn into Your Brain 299

ACA: Patient Protection and Affordable Care Act 300

ACO: Accountable Care Organization 300

CDI: Clinical Documentation Improvement 300

CMS: Centers for Medicare & Medicaid Services 301

EHR: Electronic Health Record 301

EOB: Explanation of Benefits 301

HIPAA: Health Insurance Portability and Accountability Act 302

INN: In-Network 302

NCCI: National Correct Coding Initiative 302

OON: Out-of-Network 303

Chapter 21: Ten (Plus One) Tips from Billing and Coding Pros 305

Insist on Proper Documentation 305

Verify Patient Benefits 306

Get Vital Patient Info at Check-In 306

Review the Documentation ASAP 306

Set Up a System to Ensure Accuracy 306

Play Nice with Others 307

Follow Up on Accounts Receivable Daily 307

Be a Bulldog on the Phone 307

Know Your Payer Contracts by Heart 308

Create a File System That Lets You Find What You Need 308

Make Payers Show You the Money! 309

Glossary 311

Index 319

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