Is your practice ready for coding in 2023 and beyond?
Derm Coding Consult
By Faith C. M. McNicholas, RHIT, CPC, CPCD, PCS, CDC, Manager, Lead Coding and Reimbursement Strategist, March 1, 2023
Academy coding staff address important coding topics each month in DermWorld Coding Consult. Read more Derm Coding Consult articles.
As health care continues to evolve, dermatologists are transitioning almost at the same rate, especially in the way they provide patient care, including the implementation of monumental changes in how patient care is provided and reported to the health insurance carriers. Integration of technology (teledermatology) in patient care allows dermatologists the opportunity to receive and access patient medical information and continue to provide care with minimal disruption, resulting in more efficient and timely patient care than we offered three years ago.
However, as dermatology practices continue to navigate post-pandemic patient care, it seems like the only thing constant is change — changes to evaluation and management (E/M) coding guidelines, changes to pathology consultation coding guidelines, the introduction of digital pathology coding capabilities, the addition of new social determinants of health (SDoH) diagnosis codes, and more. If you do not believe me, just look at the rate and volume of 2023 code and content updates released by the AMA and CDC/NCVHS, which hit an all-time high all because these institutions have transitioned to more frequent data-release schedules with significantly larger numbers of code families.
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As the provision of health care services transitions from a fee-for-service to a more value-based care model, dermatologists and non-physician clinicians (NPCs) are expected and required to maintain a more complete documentation process with a greater focus on ensuring code specificity that fully captures the acuity of the patient and the care provided. In tandem, health insurance companies have also adopted a reimbursement model that is contingent upon the quality of care provided, rather than the number of services. While this may be a significant shift, health insurance payers insist that the goal is to improve patient outcomes.
All these changes make it even more imperative that dermatologists and their practices review the medical record documentation patterns and coding practices and remedy any deficiencies to ensure healthy accounts receivable free from unwarranted payer claim audits and payment denials. As such, a proactive approach will keep a healthy revenue flow as your practice continues to implement more changes to the documentation, coding, and billing practices.
Tips for stress-free coding and reimbursement success in 2023 and beyond
In its continued effort to reduce administrative burdens that can lead to physician burnout, the AMA has released new modifications that make coding and documentation easier and more flexible for E/M services performed in both in/out-patient as well as office-based settings. In the past three years, the Academy, using the AMA documentation guidelines, continues to translate and provide easy-to-interpret coding guidance that reflects typical dermatology encounters to help dermatology practices successfully implement these requirements.
The key to successful and stress-free E/M coding is for dermatologists and NPCs to focus on documenting only those elements pertinent to the patient problem(s) addressed during the encounter. Remember, E/M services in all health care settings are now reported based on either medical decision-making or time spent taking care of the patient.
Dermatologists are encouraged to not spend time reviewing and documenting information not pertinent to the problem being addressed during the encounter. A pertinent history and physical examination of the condition being treated is appropriate and should be documented, even though it does not bear any relevance to the overall selection of the E/M level of service.
E/M documentation and coding example
A 35-year-old established female patient presents to the office for treatment of persistent inflammatory acne, predominately on her lower cheeks and jawline. She has previously taken courses of oral antibiotics without long-term improvement and is on a combined oral contraceptive pill and has no plans for future pregnancies. She is otherwise healthy and only takes a daily multivitamin. After taking a relevant history and performing an appropriate physical exam, decision to initiate treatment with spironolactone is discussed with the patient and the prescription is ordered.
Coding # of problems addressed:
1 or more chronic illness with exacerbation and poor progression (moderate)
Risk of complications and patient management: prescription drug management (moderate)
E/M level of service: 99214 (moderate)
With all the best intentions to make a perfect coding and billing structure, this may present some unforeseen challenges. It is important that after the implementation of succinct and accurate documentation guidelines, the practice continues to monitor the documentation and billing practices to see how the changes impact the process flow within the practice. Further, continue monitoring claim reimbursement patterns, by payer, to ensure that the payments are accurate and timely. Address any payment disparities and denials immediately by reviewing the reason for the claim denial and/or disparity, correcting the deficiency, and resubmitting the claim for re-processing.
Another important part of successful documentation and appropriate claim reimbursement is that the service rendered must be considered medically necessary. Medical necessity is determined by the condition (diagnosis) that prompts the patient to seek health care services. The most effective way to communicate the medical necessity to the responsible paying party (health insurance) is by identifying and reporting an accurate and succinct ICD-10-CM code.
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A careful examination of the patient record will likely guide you to extract information that justifies the selection of a more specific diagnosis code. Note that in the office setting, we do not code for ‘rule outs,’ ‘presents like,’ or other non-specific condition descriptions. Whatever the circumstance, it is imperative that the dermatologist or NPC documents the most concise description of the condition being treated to allow for a specific diagnosis code assignment. A specific diagnosis code includes up to seven alpha-numeric characters (where applicable). Assigning and reporting unspecified diagnosis codes will result in claim denials.
To ensure the diagnosis code reported is considered medically necessary, most payers maintain coverage policies that include a list of acceptable diagnoses and CPT codes that when reported together, will result in claim payment with little-to-no questions asked when all other coding criteria are met. Medicare maintains its administrative contractor Local Coverage Determinations (LCDs). We recommend you check the private payer coverage policies directly from their websites.
Diagnosis coding and documentation example
An inflamed, ruptured, abscessed cyst that may represent an epidermal inclusion cyst or a pilar cyst is excised. The billing staff submit a claim to the insurance payer with ICD-10-CM code L72.9 - Follicular cyst of the skin and subcutaneous tissue, unspecified.
Coding guidance
This diagnosis will likely result in claim denial because payer coverage policies will deem this diagnosis code ‘not specific’ enough to justify medical necessity. Based on the documentation, one may not find a diagnosis describing the cyst as described. However, coding guidance allows the use of ‘other’ or ‘other specified’ diagnosis codes when information in the medical record provides details for which a specific code does not exist.
Therefore, in this circumstance it will be appropriate to report ICD-10-CM code L72.8 - other follicular cysts of the skin and subcutaneous tissue. This is a covered diagnosis code.
Always ensure there is medical record documentation to support that the description is not supported by a specific diagnosis code.
More coding guidance and resources can be viewed on the AADA Coding Resource center at staging.aad.org/coding.
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