Coding Software Upgrades

January 1, 2009

It’s time to get those annual coding upgrades to your billing software. But, how can you defray the cost without losing the upgrades?

How do you determine which ICD-9 and CPT codes have changed each year? By waiting until your claims are rejected by one or more of your payers? If so, you’re not alone. Consultants and other observers say that many physician practices use this fly-by-the-seat-of-their-pants approach, which means they’re resubmitting claims and appealing denials much more than necessary. Perhaps it’s time to find a more organized way to update codes in order to maximize efficiency and minimize lost revenue.

OK, granted, not all physicians use such primitive methods to stay abreast of new billing codes. Some of them have their vendors update their practice management software, and others have developed their own methods.

Case in point: Internist Jeff Kagan of Newington, Conn., gets some of the new codes from business and professional journals, and his billing person picks up other tips from coding newsletters. Between them, he says, they dig up many of the relevant new codes, and the biller prints them on labels that she sticks on encounter forms.

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Another example: Naperville, Ill.-based family physician Elizabeth Pector says her staff attends coding classes at a local hospital, highlighting code changes they learn from the class; while she educates herself by reading articles in professional journals. Also, the practice uses Ingenix’s Encoder Pro software to get updated codes so they can be entered into its Lytec billing system. “Our staff has not seen many rejections from code changes, and if there are any, they can be fixed,” she says.

But in general, physician practices don’t address this issue proactively. As the president of the North Carolina chapter of the American Association of Professional Coders, Sonja Thompson has witnessed slapdash coding update habits all too often. “Practices waste a lot of time resubmitting claims that would have gone through the first time if they’d coded correctly or appended the right modifier,” says Thompson, who is also the financial services manager for Alamance Ear, Nose, and Throat in Burlington, N.C.

Waste in any area is something you can’t afford, but especially in billing. Here are some more efficient ways she and other experts suggest to stay ahead of the coding curve.

The basics of coding updates

Each year, CMS releases a list of ICD-9 updates that go into effect Oct. 1, and the AMA issues a roster of CPT changes that become effective Jan. 1. Sounds simple. But, whereas CMS publishes the impending changes in the Federal Register the previous spring and puts them online during the summer, the CPT codebook doesn’t come out until November. So, while practices have a few months to prepare for the ICD changeover, they have no more than six weeks to reprogram CPT codes by the Jan. 1 deadline.

Complicating matters further are the AMA’s quarterly updates, which may or may not be on every payer’s radar. “The only way you can get those CPT codes is by going onto the AMA Web site,” notes Maxine Lewis, a veteran coding consultant based in Cincinnati. “Not all payers are aware of that, and not all [medical] offices are aware of it, but there are codes coming out throughout the year. The majority of changes are given out in November and are effective Jan. 1, but some take effect July 1.” Lewis suggests that your billers contact your major payers to see if they’re aware of the latter codes before you use them.

Your not-so-ready payers

Under federal HIPAA regulations, payers are required to use the new CPT codes starting Jan. 1, and the new diagnosis codes on Oct. 1. The reality? Not all of the insurance companies are ready by then. The consensus in the industry is that the major insurers have gotten much better about this, but there’s still a spike in rejected claims around the beginning of each year.

Mandy Rollins, a certified coder who teaches coding to residents in a family practice residency program in Greenville, S.C., says that even large carriers are not always prepared to receive new codes on the effective dates. “Last year, there was one commercial payer that took almost a month to finish their edits and get back to us. We did our stuff correctly, but when we sent it out, their edits weren’t matching. So it was causing problems.”

Similarly, Christina Allen, a reimbursement specialist for the Wellspan Medical Group, a 50-office multispecialty group based in York, Pa., says the practice gets denials for several months after it does its own updates, especially with ICD-9 codes, due to lack of preparation on some payers’ parts. “And that’s frustrating because it costs us money to appeal the denials,” she says.

Although there isn’t much you can do about the incompetence of some of your payers, Lewis offers this tip: “I’d call the plans and find out what the fee schedule is for the new codes, so you can see what they’re going to pay for them. Then you can tell whether they’re going to accept them, too.”

What about software vendors?

You may think that your practice management system vendor will update the codes in its software under your maintenance contract. In fact, vendors all approach coding updates differently. Some, especially smaller firms, leave it entirely up to the practices. Others are willing to help practices do manual updates from CMS and AMA files, or provide them with computer programs that help them download the files themselves. Other vendors provide automatic updates.

Some experts say that many practices prefer to update their software manually - adding and deleting codes themselves - because automatic updates might disturb any customized features they’ve put into the system. Sheri Poe Bernard, vice president of member relations for the AAPC, says that tends to be true for larger groups. But most small practices don’t customize their billing software, she points out.


If you have a maintenance agreement, your vendor should update your codes quarterly. “That’s what you’re paying for,” she notes. “They’ll alert you that there’s an update available, and then you’ll either load it on your machine when it comes on a disk, or download it from their Web site.”

That’s how eClinicalWorks does it, says Sam Bhat, vice president of sales for the Westborough, Mass., vendor. “When updates are available for any of these codes, we publish that on a secure support portal. It automatically sends a notification to the customer saying, ‘There’s a new update available; would you like to apply it today?’ You can schedule that update as well.”

In contrast, Tampa-based Sage Software doesn’t include coding updates in maintenance contracts for its Intergy and Medical Manager systems. Instead, explains Stelle Smith, clinical products marketing manager for Sage, the company provides an application that makes it easy to download the ICD-9 and CPT code files into your system yourself. Sage no longer does coding updates for customers, he says, because it’s too hard to keep them straight. If billers fail to keep the effective dates current, they can accidentally use the wrong version of codes.

Multiple code versions are found in all sophisticated billing systems, and they should be, to some extent. The programs keep earlier versions of codes on file because billers might have to resubmit a claim that was originally sent in before the codes were changed. Also, claims that were submitted before the code update’s effective date may have to be transmitted to a secondary insurer after the primary carrier pays its share.

To prevent conflicts with the earlier codes, Thompson says, her ENT group manually enters changes in its billing system the day before they become effective. “We’ll be using the previous codes up until that day, so we have to do it manually the day before, or the night after we do our charges.”

Practices that use McKesson’s Horizon program can update their codes themselves or have the company do it for them, says Jim Reynolds, director of product management for the Horizon line. McKesson’s Medisoft and Lytec customers, which include many small practices, can either get the coding updates by buying a new version of the software each year, or they can update them manually, perhaps with the help of the value-added-resellers who sold them the software.

There are also programs that can help practices reduce the work of updating. For example, Sage’s Jump Start application uses information culled from many other practices in the same specialty to identify the codes that the specialty will normally use. Applications from third-party firms like Ingenix and 3M identify the “billable” codes for particular specialties and translate them into user-friendly language.

The updating gameplan

Fortunately for most single-specialty practices, the relevant code updates aren’t that numerous in any given year, notes Debra Wiggs, a health IT consultant based in Bellingham, Wash. In primary-care practices, she says, most of the CPT codes are for evaluation and management and just a few procedures. “The biggest challenge is modifiers; they keep refining them. So it’s about how CMS and other payers use the modifiers.”

Here are some key issues to be aware of:

  • Stay on top of payer rules. Even among Medicare carriers, the specifics of how and when they apply the new codes varies from one region to another. And private payers don’t always use codes exactly the same way. What all of this points to is this: Your billers must stay abreast of different payers’ billing rules and effective dates for coding changes - not easy.

 

 

  • Update your encounter forms and charge tickets accordingly. In most single-specialty practices, Wiggs points out, 20 CPT codes account for 80 percent to 90 percent of revenue, so being aware of changes in those codes - and how to document them properly - will mostly prepare you for the transition.

 

 

  • Pay particular attention to updates to diagnosis codes, which usually change more than CPT codes do. In 2007, for example, there were nearly 300 ICD-9 additions, deletions, and revisions. Some of the 142 new codes were related to more precise definitions of signs, symptoms, and conditions. For example, there were new codes for more than 30 subtypes of non-Hodgkin’s lymphoma and six new codes for various kinds of dysphagia. Many of the new codes were highly specialized. Still, some were used by primary-care physicians.

 

 

  • Don’t depend too heavily on your EMR. Even if your practice has an EMR that offers pick lists of updated codes, you can’t necessarily depend on those, says Mandy Rollins, whose family practice residency does have an electronic medical record system. “I teach my residents to use the code book. I emphasize to them not to let the EMR [choice] be their final choice.”

 

 

  • Don’t rely completely on your vendors’ coding updates. Have a certified coder look at your claims periodically to make sure they’re being correctly coded. (For a list of certified coders in your area, go to www.aapc.com.)

One reason to do this, says Bernard, is that the code updates don’t necessarily include certain subtle changes. In ICD-9, for example, codes for certain conditions are indexed to particular categories: for example, “skin tags” may be indexed to “hypertrophic skin conditions.” Even if CMS decides to reclassify that condition, she says, “all they change is the index. The reassignments of diseases to a different code don’t show up at all, and they happen every year.”

 

Coding updates are a handful, but don’t be daunted. For most coding changes that affect your practice, an experienced and conscientious biller is all you need to make the necessary changes in your system, says Lewis. “The ordinary biller could do it,” she says. “Because even though there are a lot of coding changes, there aren’t a lot that deal with a specific practice.”

Ken Terry is a New Jersey-based freelance writer and the author of the book “Rx for Health Care Reform.” He can be reached via physicianspractice@cmpmedica.com.

This article originally appeared in the January 2009 issue of Physicians Practice.