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Hospital Coders Face Challenges with Physician Coding: A Focused Guide for Ensuring Your Services Are Coded Correctly

MichaelGCalahan1By Michael G. Calahan, PA, MBA

There is a growing trend of physician private practices moving under the auspices of health care systems, whether they are purchased or are incorporated into the health systems under other business arrangements.  The coding and billing of professional (“pro-fee”) services in many cases is becoming centralized, being taken out of the physician practices and brought to the incumbent facility coders.  A fact providers should be aware of, however, is that in many cases there is a lack of physician-oriented coding experience in the facility settings where highly skilled coders in inpatient and/or outpatient services are typically found.  The facility coders themselves are feeling the pinch, too.  They are facing new challenges by tackling the physician pro-fee cases.  Mistakes in pro-fee coding can negatively impact the practice’s bottom line as well as create potential compliance problems, especially in the tangled virtual environment of transmittals, “Change Requests” and official guidelines issued by the Centers for Medicare and Medicaid Services (CMS) for federal claims.

Certain features of pro-fee coding are markedly different than coding for inpatient cases, and even though coding for pro-fee services is more similar to outpatient services, the differences between the latter two are still numerous, especially considering all of the outpatient prospective payment system (OPPS) rules/regulations.  There are a few simple steps the private practice physician can take to alleviate selected aspects of the transitional stress such as sharing charge capture documents (e.g., superbills), transferring electronic code tables, and so forth.  This data will be immensely beneficial to the facility’s coding staff.  But what are the major points of pro-fee coding that physicians themselves, in the process of bringing their businesses into the health system fold, should be aware to spotlight before and during practice migration?  In terms of pro-fee coding, there are four major audit areas that providers should be aware to ensure their pro-fee services are coded accurately and within compliance standards: (1) aspects of ICD-9-CM diagnosis coding; (2) Evaluation and Management (E/M) services coding; (3) modifier assignment; and (4) HCPCS Level II code and units reporting for drugs and biologicals.

  • ICD-9-CM official reporting guidelines for pro-fee cases are the same as those for outpatient services, but certain areas of the guidelines tend to cause confusion across the board for coders simultaneously performing inpatient, outpatient and pro-fee coding duties.  One area typically found on audit is the incorrect coding of “probable,” suspected,” “rule out” and “versus” diagnosis code differentials as confirmed diagnoses.  This mistake is frequently made by inpatient coders also tapped to do periodic outpatient and/or pro-fee cases, since under inpatient ICD-9-CM coding rules the inpatient coder can assign a “probable” or otherwise unconfirmed diagnosis with a code for a confirmed condition or illness.

Coding from diagnostic reports has also been an area of difficulty in scenarios where facility coders are tasked with coding pro-fee cases.  It is an area of perennial confusion between coders in the various health care settings.  The bottom line: in pro-fee settings any test findings, impressions or abnormal test values provided in laboratory, radiology, pathology and other ancillary test reports are not coded as specific, confirmed diagnoses unless the treating physician has acknowledged those particular findings, impressions or results, thereby indicating their clinical significance (in the absence of confirmed diagnoses for abnormal labs, there are appropriate code selections from Chapter 16 “Symptoms, Signs and Ill-Defined Conditions” of Volume 1, ICD-9-CM).  This can be achieved by the treating physician in a variety of ways but typically is found when the physician signs/initials the test report and frequently adds patient-specific comments or – in the optimal documentation scenario – the physician documents the test results in a confirmatory way within the patient’s progress notes, together with his/her commentary or assessment on the test findings.

  • Evaluation and Management (E/M) services such as office visits, inpatient hospital visits, observation services and other such cognitive services tend to have CPT codes assigned based on the extent of the case documentation and the degree of “key component” fulfillment under pro-fee coding.  This differs greatly from facility E/M coding wherein tally or point systems are utilized, grading the various services and items not separately billable to account for resource expenditures, and adding up the points into a facility level E/M code.  For example, Emergency Department visits can vary in facility E/M levels based on nursing and other assistive services provided to the patient, as well as various interventional efforts and other considerations such as the patient’s age (e.g., an infant might require more intensive staff triage effort), the nature of the presenting problem (e.g., a myocardial infarction presentation will automatically engage certain facility responses accounted for at a specific assessment point value), special care, etc.  While these are also factors in the pro-fee assignment of an E/M code, for physicians and nonphysician practitioners the final pro-fee code assignment for E/M services is only reflective of the degree, quality and content of documentation of three key components: history, physical examination and medical decision making.  These distinct E/M components all mesh together for final, appropriate code selection under either the 1995 or 1997 E/M Documentation Guidelines which establish the basis of documentation for E/M codes.  The facility does not follow such E/M documentation guidelines but instead utilizes its own E/M facility level point-based gradations.  The differences between these two approaches to E/M coding, then, are numerous and significant.  The private practice physician must be knowledgeable enough about the coding process to ensure his/her cognitive services will be coded accurately.
  • Modifier assignment, including both CPT Level I and HCPCS Level II modifiers, differ from facility outpatient modifier assignments in several ways.  The number of modifiers available and applicable to pro-fee coding is much greater than the gamut of modifiers for facility outpatient services. CPT Level I modifiers reported by outpatient facilities include -25, -27, -50, -52, -58, -59, -73, -74, -76, -77, -78, -79, and -81.  Pro-fee coding allows for nearly all of those particular Level I modifiers except -73 and -74 as well as -27 (note: the -27 modifier is not accepted at this time by CMS as a payment modifier for facility outpatient services; other commercial payors may accept it, however), and includes such modifiers as -22, -23, -24, -53 and numerous others.  Of the HCPCS Level II modifiers, about 40 modifiers are applicable to facility outpatient services while many more are applicable to pro-fee coding.  Therefore the familiarity by facility coders of the pro-fee coding choices in terms of modifiers may be limited by virtue of the fewer number of modifiers they deal with on a frequent basis.

Physicians should also ask in which manner modifiers are assigned to cases by the facility; many facilities have moved from hard-coded protocols (via the chargemaster or “CDM”) to soft-coded protocols (via the HIM Department coders or assigned clinic coders) because of compliance concerns, such as indiscriminately appending modifier -59 Distinct Procedural Service on line items regardless of the scenario or supporting documentation.  A compliance-oriented health system will ensure that modifiers affecting payment and/or enabling the claims to bypass system edits will be appropriately assigned by coders per the documented case circumstances, not by an automated system.  For pro-fee coding this is of paramount importance.

  • A great deal of confusion typically surrounds the assignment of HCPCS-II codes for drugs/biologicals (with each item’s attendant units) by facility coders not typically responsible for coding such items.  In many cases the items such as J0696 Rocephin IM 250mg are “dropped” through the charge capture system to the claims processing module via the CDM from various outpatient clinics, and may not be coded directly from provider documentation.  This operational issue accounts for numerous HCPCS Level II code and unit errors found on outpatient clinic audits.  Again, mis-coding of these services can compromise revenue as well as burden the provider with avoidable compliance issues.  To help avert this, the private practice staff can supply the health system with its “cheat sheets” and/or superbill, if these documents are thorough and up-to-date, to apprise the facility coders of the full complement of HCPCS Level II codes typically engaged by the practice.  The facility representatives can then decide if these services should be added to any particular CDM subset in an automated fashion, or if they should continue to be soft-coded by coders.

The transition of the physician’s practice from a private enterprise into a health system or network setting can bring both rewards and compromises, but in the conversion certain coding and billing issues must be addressed as early as possible.  If centralized coding and billing is to be part of that transition, one of the due diligence issues to address is the level of expertise the health system’s coders have with pro-fee coding.  The private practice physician can avoid revenue compromise and stay clear of fraud, waste and abuse issues by being aware of the differences between facility and professional services coding, and ensuring health system staff designated to handle pro-fee cases are knowledgeable and accurate.

Michael G. Calahan, PA, MBA, is the Director of Physician Services at KForce Healthcare, Inc.; he works in the Washington DC Metro area and specializes in compliance, revenue cycle management, CDI, coding and billing in the physician and facility inpatient/outpatient arenas. He may be contacted by e-mail at

One comment

  1. When coding pro-fee and inpatient regarding CPT codes we seem to have issues where the two different coders are coming up with two different CPT codes. Is this normal? If so why? A procedure is a procedure so in my mind of thought that code should always be the same.

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