Understanding Insurance Codes and Their Function

Understanding Insurance Codes and Their Importance

The administrative side of navigating health insurance in America is daunting at best. One crucial aspect that often mystifies patients is the process of coding and billing for medical visits–CPT, ICD, E/M, oh, my! You may have been surprised to see a bill for a lab test and when you asked about it, the lab said “The doctor didn’t use the right code.” What does that even mean? Let’s try to unpack some of those details. 

Understanding the Basics:

1. What is Medical Coding?

   This is the process of translating a diagnosis, visit and procedures into universal alphanumeric codes. These codes, usually derived from standardized code sets like Current Procedural Terminology (CPT) and International Classification of Diseases (ICD), serve as a common language for healthcare providers, insurers, researchers and government agencies. Coding is how pay is determined, how we track trends in disease, and keep tabs on overall healthcare expenditures. 

2. The Role of Medical Billing:

   Once the medical codes are assigned, the billing process comes into play. Medical billing is the systematic submission of these codes to insurance companies or patients for reimbursement. It involves creating and sending claims, tracking payments, and managing any denials or rejections.

The Importance of Accurate Coding and Billing:

1. Ensuring Proper Reimbursement:

   Accurate coding and billing are essential to ensure that healthcare providers receive proper reimbursement for the services they render. Errors or inaccuracies can lead to delayed payments or even claim denials.

2. Compliance and Regulatory Standards:

   Following correct coding and billing practices is not just about getting paid; it’s also a matter of compliance with industry regulations. Healthcare providers must adhere to guidelines set by entities like the Health Insurance Portability and Accountability Act (HIPAA) to protect patient privacy and maintain ethical standards.

3. Facilitating Communication:

   Standardized coding facilitates effective communication between healthcare providers, insurers, and government agencies. It streamlines the sharing of information and helps maintain a cohesive and accurate patient health record.

Example

Let’s say you have Type 2 Diabetes. The diabetes has also caused complications such as chronic kidney disease, neuropathic pain, low blood sugar and a severe condition called gastroparesis. You’ve also had a heart attack because diabetes is a very strong risk factor for heart disease. To treat your conditions, you take insulin through an insulin pump, monitor your sugar with a continuous glucose monitor, take a statin for your heart, aspirin and some other medicines that help protect kidneys and heart from the effects of diabetes. Your a1c is high, 8%. You see your endocrinologist for a follow up visit that takes 45 minutes after having some labs done. She adjusts the insulin pump, renews medication refills,  What kinds of codes are we talking about? 

Here is what that billing would look like: 

1. 99215 – for diabetes follow up visit of 45+ min duration.
2. 95251 – to download and interpret the continuous glucose monitor. 
3. Diagnoses codes to support payment for #1 & #2 include:
   1. E11.4 – diabetes type 2 with neuropathy
   2. E11.22 – diabetes type 2 with chronic kidney disease
   3. E11.64 – diabetes type 2 with hypoglycemia
   4. E11.65 – diabetes type 2 with hyperglycemia
   5. E11.43 – diabetes type 2 with gastroparesis 
   6. Z79.4 – long term use of insulin 
   7. Z51.81 – monitoring for drug levels
   8. I25.1 – atherosclerosis of coronary artery
   9. Z79.899 – long term drug therapy
   10. E78.2 – mixed hyperlipidemia 
   11. Z96.41 – presence of an insulin pump
   12. Z46.81 – fitting/adjustment of insulin pump

So you can appreciate how much extra time and energy it takes to translate a clinical note into the codes, and how many variables are in play during what might seem like “a simple diabetes visit.” 

Frequently there are other diagnoses involved as well that necessitate additional coding. If a patient also has hypothyroidism, osteoporosis, obesity, etc. these all require additional codes. 

“They Didn’t Use the Right Code”

This is very, very sticky. 

There are different rules for different insurances about what constitutes “the right code.” It is impossible to know them all, because they all change–sometimes more than once per year.

In general, though, many insurances agree to cover a test for a known diagnosis. So if you have problems with low vitamin D, then using the relevant code E55.9 will ensure this is covered. However, if you are at risk for low vitamin D, and need to be screened, the test is VERY hard to get covered. Essentially none of the “screening” codes such as Z13.228 (screening for metabolic disorder), Z13.21 (screening for nutritional deficiency), or Z13.29 (screening for suspected endocrine disorder) will ensure that the lab is covered. If you have any type of osteoporosis diagnoses, those codes will get a vitamin D test covered, but if you only have early thinning of the bone (osteopenia), vitamin D screening is not covered–even though it’s still medically necessary. 

As if that wasn’t enough, there are other somewhat random codes that CAN help get testing covered, such as the above Z79.899. Why does it work? Who freaking knows. 

So why can’t we just change a code to something that we know will work? Because if we use a code that does not apply to the patient (like osteoporosis when the patient does not have it), then that constitutes insurance fraud, which can cost someone their medical license, or result in prison time. Or both!