Insurance Billing Codes and Modifiers: What's the Difference and Why It Matters
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Lost insurance revenue can devastate an eye care practice. Navigating the complexities of insurance coding can be challenging. That’s why assigning the correct diagnosis codes, procedure codes, and modifiers is critical before you file a vision plan or medical insurance claim.
Ignoring educating your staff about the new, deleted, and revised codes for optometry and ophthalmology can make or break your eye care revenue cycle management process. In this blog, we’ll review the difference between billing codes and modifiers.
Current Procedural Terminology (CPT®) Codes
CPT® codes were developed in 1966 by the American Medical Association® (AMA) to describe a medical, surgical, or diagnostic procedure that doctors and healthcare providers perform. CPT® codes ensure uniformity and are required for billing medical insurance payers. Every calendar year, the AMA announces changes to the CPT® code set.
The AMA publishes CPT® codes, which consist of various categories/types of five-digit codes and two-character modifiers to describe any changes to the procedure. Many of the codes are numeric, but a few are alphanumeric. Some codes may have a fifth alpha character, such as A, F, T, or U.
Types of CPT Codes:
Category I Codes: Describes services, procedures, devices, and drugs (including vaccines) usually placed into sub-categories. This category includes evaluation and management (E/M) codes.
Category II Codes: Alphanumeric supplemental codes track follow-up care and outcomes for performance measurement, such as whether the patient smokes. These codes are not linked to reimbursement.
Category III Codes: These are temporary alphanumeric codes when a physician uses a new or emerging technology, procedure and service. Category III codes were “created for data collection, assessment, and payment of new services and procedures that currently don’t meet the criteria for a Category I code,” reports the AMA.
Proprietary Laboratory Analyses (PLA) Codes: PLA codes are an alphanumeric CPT® code set that the AMA CPT® Editorial Panel recently added to describe proprietary clinical laboratory analyses. PLA codes include a corresponding descriptor to identify tests for specific labs or manufacturers.
ICD-10 Codes (International Classification of Diseases)
The World Health Organization (WHO) owns, develops, and distributes ICD (International Classification of Diseases) codes. The U.S. codes include ICD-10-CM (Clinical Modifications) and ICD-10-PCS (Procedure Coding System). ICD-10 codes are updated at the beginning of each October.
Why is it so important to pay attention to using the correct ICD-10 codes? Well, the consequences of not doing so can be dire. Picture this: delays, rejections, and denials of your claims.
What are ICD-10-CM diagnosis codes?
The ICD-10-CM code is a medical code that describes the condition and diagnoses of patients when you bill Medicare, Medicaid, and other insurance payers.
ICD-10-CM codes are updated annually to reflect the latest scientific and clinical knowledge.
An ICD-10-CM diagnosis code tells the insurance payer why you performed the service.
ICD-10-CM codes are divided into 22 chapters. The chapters are based on code subjects.
What are ICD-10-PCS codes?
The ICD-10-PCS code is a medical classification coding system used to describe inpatient procedures.
A diagnosis code tells the insurance payer why you performed the service.
ICD-10 Code Checklist
Review plans, assessments, and outbound documents in your eye care EHR that are mapped from the old codes to the new ones.
Add new codes and remove old codes. Update codes if you have a “favorites” list in your ophthalmology or optometry EHR and practice management system. Review plans, assessments, and outbound documents in your EHR that are mapped from the old codes to the new ones.
Review and update all “code rules” you created in your EHR and practice management software affected by the new and deleted codes.
Be careful when using “copy from previous” as many ophthalmology and optometry software systems copy over removed codes.
Ensure that the primary ICD-10-CM codes match the primary chief complaint and reason for the visit in the exam note.
Contact your optometry and ophthalmology associations for specific coding changes and ICD-10 coding resources. For instance, the American Academy of Optometry marketplace provides a Code Book for Optometry.
Evaluation and Management (E/M) Codes
E/M codes are a category of CPT® codes used for billing services provided by a doctor or other healthcare provider. The E/M codes describe patient visits in various categories.
These medical codes apply to visits and services that involve “evaluating and managing” patient health for new and established patients. E/M coding consists of three components: history, medical decision-making (MDM), and exam.
TIP: It is the provider’s responsibility to determine the appropriate E/M code and if the history and/or medical exam is medically necessary, and to what extent it is performed and documented.
What coding elements should you use for medical decision-making?
E/M codes recognize four types of decision-making: minimal, low, moderate, and high. You must meet or exceed the medical decision-making level to qualify for that particular E/M coding level. The following three elements define medical decision-making.
Number and complexity of problem(s) addressed during the encounter. A problem is a disease, condition, illness, injury, symptom, sign, finding, complaint, or other issue you note on the encounter. Problems are addressed or managed when you evaluate and treat them during the visit, which might include further testing or treatment.
You need to review and analyze the amount and/or complexity of data (such as medical records and test results) for the encounter.
Risk of complications, morbidity, and/or mortality of patient management decisions made at the visit associated with the patient’s problems, diagnostic procedure(s), and treatment(s).
Healthcare Common Procedure Coding System (HCPCS) Codes
HCPCS is a standardized set of codes you use for billing healthcare claims to Medicare, Medicaid, and other third-party payors that correspond to services, procedures, and equipment not covered by CPT® codes.
For instance, coding modifiers are added to HCPCS codes to provide additional information for processing a claim. HCPCS codes consist of two medical code sets: Level I and Level II.
Level I: Includes CPT codes to submit medical claims for procedures and services performed. Level I codes consist of 5 characters (numeric). These codes are maintained by the American Medical Association (AMA). For example, to bill a comprehensive eye exam, use CPT code 92004 (new patient) or 92014 (established patient).
Level II: Identifies products, supplies, and services not included in the CPT codes. Level II codes consist of 5 characters (numeric and alphanumeric). CMS maintains HCPCS Level II codes. Most eye care HCPCS codes fall under the “V” range. For example, V2530 is used for contact lenses, scleral, gas impermeable, per lens.
Medical Billing Modifiers
Modifiers are added to the HCPCS or Current Procedural Terminology (CPT®) codes to provide additional information required for processing a claim. For instance, modifiers identify why a doctor or other qualified healthcare professional provided a specific service and procedure.
Related: How (and How Not) to Use Common Medical Billing Modifiers
Why Knowing the Difference Matters
Accurate Billing: Properly using billing codes ensures accurate representation of services you provide, which supports appropriate reimbursement.
Claims Processing: Modifiers play a crucial role in claims submissions. Incorrect or missing modifiers can lead to claim denials or delays, impacting cash flow for healthcare providers.
Effective Communication: Both codes and modifiers help streamline communication between healthcare providers and payers, reducing misunderstandings and facilitating faster payments.
Compliance and Audits: Understanding the correct application of billing codes and modifiers is vital for compliance with healthcare regulations, helping avoid penalties during audits
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