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Study guide for medical coding and billing.


International Classification of Diseases.

ICD-9 Volume 1

Tabular list contains disease and condition codes as well as the descriptions also contains V codes and E codes.

ICD-9 Volume 2

Alphabetic Index this is the alphabetic index of volume 1

ICD 9 Volume 1 and 2 are used where?

inpatient and outpatient settings

ICD-9 Volume 3

Tabular list and Alphabetic Index contains codes for surgical, theapeutic and diagnostic procedures; used primarily by hospitals.

To find the correct code in the ICD-9

look first in the alphabetic index volume 2 and then cross reference with the tabular list volume 1

V codes

supplementary classification codes used to identify health care encounters for reason other than illness or injury or to identify a patient who illness is influenced by certain circumstances found in both volume 1 and volume 2.

E codes

supplementary classification codes used to describe the reason or the external cause of injury, poisoning or other adverse effects.


are the main division in the ICD-9-CM; they are divided into sections Endocrine, Nutritional, and Metabolic Diseases, and Immunity Disoreders (240-279)


Composed of a group of three-digit categories representing a group of conditions or related conditions.


Composed of three-digit codes representing a single disease or condition. The three-digit code is used only if it is not further subdivided. There are about 100 category codes and most require a fifth digit.


Provides a 4 digit code ( one after the decimal point ) which is more specific then a category code in terms of cause, site, or manifestation of the condition. This must be used if available.


Provides a five digit code which gives the highest specificity of description to a condition. Use of it is mandatory if it is available.

Level of detail in coding

To the highest level of specificity

Sequencing in the diagnosis

the diagnosis, condition, or other reason for the encounter are coded first. Coexisting conditions that were treated or medically managed are listed as additional codes. Conditions treated previously or no longer exist are not coded. personal or family history that influence treatment may be assigned as a secondary code.

Terms in the alphbetic index that are in parenthesis

non-essential modifiers they do not have any affect on the code selection

Codes indented two spaces to the right of main term

are called subterms. These are essential modifiers because they have bearing in the selection of the right code.

Everything in the index is listed by

condition, diagnosis, signs, symptoms, and conditions such as pregnancy or admission.

Hypertension table

found in the index under main term hypertension.

Three classifications of hypertension

Malignant, Benign and Unspecified.

Neoplasm table

located in index under neoplasm and is organized by anatomic site.

Codes for Neoplasms

Malignant, Primary Malignancy, Secondary Malignancy, Caricinoma in situ, Benign, Uncertain Behavior, Unspecified Nature.

Section 1 Alphabetic Index

Index to Diseases

Section 2 Alphabetic Index

Table of Drugs and Chemicals

Section 3 Alphabetic Index

Index to External Causes

National Provider Identifier

the standard unique health identifier for heath care providers to use in filling and processing health care claims & other transactions


Healthcare Common Procedure Coding System

Level I codes

Consist of codes found in the CPT manual. They have five position numeric codes used to report physicians services rendered to patients.

Level II codes

(national codes) are codes formulated thru the joint efforts of the CMS, the health insurance association of america, and the blue cross and blue shield association. Contains 5 positions alpha-numeric codes for physicians and non-physician services not found in the CPT ( level I ) These codes start with a letter followed by four numbers and make up more than 2400 five digit alphanumeric codes divided to 22 sections, each covering a related group of items

Level III Codes

Codes which were used locally or regionally have been eliminated by the CMS since the implementation of the HIPAA. Some of the codes are now in level II.


current procedural terminology

Category I codes

Represent services and procedures widely used by many health care professionals in clinical practice in multiple locations and have been approved by the FDA

Category II Codes

supplemental codes used for performance measurements. Although these codes are intended to facilitate data collection about quality of care, their use is optional.They are published twice a year Jan 1 and July 1.

Category III Codes

Temporary codes for emerging technology, services and procedures that are used instead of unlisted codes when available.

CPT Manual

composed of 8 sections

Sections of CPT Manual

e&m, anesthesia, surgery, radiology, pathology & lab., medicine, category II codes and category III codes

stand alone code

a CPT code that contains the full description of the procedure without additional explanation

Addon code

used for procedures that are performed and reported only in addition to a primary procedure; indicated in CPT by a + sign next to the code. Never used separately.


Provide the means by which the reporting physician can indicate that a service or procedure that has been performed has been altered by some specific circumstance but not changed in its definition or code

Indented codes

listed under associated stand alone codes

triangle symbol in the CPT

represents change in the code description since the last addition

Two triangle symbols

represent changes in the text or definition between the triangles.

A bullet symbol

represents a new procedure

(+) plus sign

indicates add on code

(-) circle with line through it

represents exemption from modifier 51

CPT Manual

contains 3 parts: main text, appendices and the alphabetic index and is divided into 6 sections

Evaluation and Management



00200-01999, 99100-99140



Radiology (Including Nuclear Medicine and diagnostic Ultrasound)


Pathology and Laboratory


Medicine (except anesthesiology)

90281-00100, 99500-99602

add-on codes

used for procedures that are performed and reported only in addition to a primary procedure; indicated in CPT by a + sign next to the code. Never used separately. They are modifier -51 exempt.

CPT 5 location methods

Service or Procedure, Anatomic Site, Condition or disease, Synonym or Eponym, Abbreviation.

CPT modifiers

provide additional info to insurance company or 3rd party of circumstances of which the services or the procedure was altered.


2 digit numeric codes are added to the five-digit CPT code.

Modifiers are found where

Appendix A of the CPT manual.

modifier -24

Unrelated E&M Services by the Same Physician During a Postoperative Period

modifier -26

Professional Component

modifier 32

Mandated Services

modifier -50

Bilateral Procedure

modifier -51

Mulitple Procedures

When is modifier -51 used

more than one procedure is performed during the same surgical episode, one code does not describe all of the procedures performed, the secondary procedure is not minor or incidental to the major procedure.

3 instances modifier 51 is used

1)same operation, different site 2) multiple operations,same operative site 3)procedure performed multiple times.

modifier -58

stage or related procedure or service by same physician during the postoperative period

modifier -78

return to the operating room for a related procedure during the operative period.

modifier 79

unrelated procedure or service by the same physician during the postoperative period

modifier -90

Reference (outside) Laboratory

modifier -99

Multiple Modifiers

unlisted procedures

considered unusual, experimental or new or do not have a specific code

surgical package

"A global package for surgical procedures that refers to the payment policy of bundling payment for the various services associated with a surgery into a single payment covering professional services for preoperative care, the surgery itself, and postoperative care; also known as the global package"

3 ways an individual can obtain health insurance

Group Insurance, Personal Insurance, Pre-paid Health plan.

Group Insurance

When a group of employees and their dependents are insured under 1 group policy issued to the employer.

Personal Insurance

An insurance plan issued to an individual. Premium rates are usually higher than a group rates and service availability is lessened with this type of coverage.

Prepaid Health Plan

predetermined set of benefits covered under one set annual fee.

Indemnity Insurance

This is also known as fee-for-service. Under this plan, the services that are paid for are listed in the policy and payments are based on the fees physicians charge for the service.

Managed Care Plans

Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Point-of Service Plan (POS)

Health Maintenance Organization

Is a managed care benefits plan that provides a wide range of medical services to individuals that have been enrolled into the program.This plan is the least costly but most restrictive. It uses a gatekeeper physician whom the beneficiary is required to visit initially for any case.

Preferred Provider Organization

charges a higher premium than HMO,s in exchange for more flexibility and more options for the beneficiaries. There is no gatekeeper-physician and beneficiaries choose the provider from whom to seek services so long as the provider is within the network.

Point -of -service plan

managed care plan that gives beneficiaries the option whom to see for services. If she goes to a provider within the network she will receive benefits similar to the HMO and if chooses to go to out of network the POS will still pay but at a rate significantly lower than the in network physician and the difference will be billed to the beneficiary.

The Usual, Customary, and Reasonable

Mostly used reference for fee-for service reimbursement. To arrive at a payment amount for a claim the carrier compares the physician's most frequent charge for a given service (the usual), the average charge of all providers of similar training and experience in a geographical area (the customary), The actual charge submitted on a claim (must be reasonable to the provider) the lowest amount is used for the allowable charge.

Medicare RBRVS

procedures relative value is the sum of three elements. Work (represents the amount of time, intensity of effort, and medical skill required), Overhead (practice costs related to performing the service, and Malpractice (cost of malpractice insurance) .

conversion factor

determined by multiplying the codes relative value by a constant dollar amount.

Medicare Part A

Called the Hospital Insurance for the Aged and Disabled. It covers institutional providers for inpatient, hospice, and home health services.

Medicare Suffix A

Wage Earner (upon retirement)

Medicare Suffix B

Spouse of wage earner

Medicare Suffix C

Disabled child

Medicare Suffix D


Medicare Suffix HAD

Disabled adult

Medicare Suffix M

Part B benefits only

Medicare Suffix T

Uninsured and entitled only to health insurance benefits

Medicare Part B

Referred to as Supplementary Medical Insurance (SMI) This coverage is a supplement to part A, which covers medical expenses, clinical laboratory services, home health care, outpatient hospital treatment, blood, and ambulatory surgical services. Premiums are usually deducted from monthly Social Security check.

Medicare Part C

(Formerly Medicare plus (+) choice plan) Was created to offer a number of healthcare services in addition to those available under Part A part B. The CMS contracts with managed care plans or provider service organizations to provide Medicare benefits. A premium similar to part B may be required for coverage to take effect.

Medicare Part D

Prescription Drug, Improvement, and Modernization Act enacted in December 2003 and began implementation in January 2006 where Medicare beneficiaries can enroll in the Medicare in the Medicare prescription drug plan. The beneficiary have a choice among several plans that offer drug coverage for which they pay a monthly premium.

Clean claim

Has all required fields accurately filled out, contains no deficiencies and passes all edits.

Dirty claim

Contains errors and omissions. Usually these claims do not pass front-end edits. They either are processed manually for resolving problems, or rejected for payment.

Invalid Claim

any medicare claim that contains complete, necessary information but is illogical or incorrect

rejected claim

Requires investigation and needs further clarification.

Advanced beneficiary notice

document provided to a medicare beneficiary by a provider prior to service being rendered letting the patient know his or her responsibility to pay if Medicare denies the claim.


To pay for medical services and items that medicare does not cover and medicare's coinsurance and deductibles, beneficiaries may purchase a supplement insurance. Those amounts that are typically the patient's responsibility under medicare. There are several standard _ policies established by the federal government with insurance industry.


Federal program administered by the state government to provide medical assistance to the needy. Each state has its own guidelines for eligibility and services, therefore benefits and coverage may vary widely from state to state.

Categorically needy

Families, pregnant women and children (families with dependent children, pregnant women and children.), Aged and disabled person (SSI related groups) Qualified medicare beneficiaries) Persons receiving long term care in nursing facilities. and intermediate care facilities. (medicare and medi/medi beneficiaries).

medically needy

Medically indigent low income families, low income persons losing health insurance coverage. (Medicaid purchase of cobra coverage)

Payer of Last Resort

Medicaid, The principle that Medicaid pays last on a claim when a patient has other insurance coverage in place.

Workers Compensation

A state required insurance plan, the coverage of which provides benefits to employees and their dependents for work related injury, illness or death. Each state has an established minimum number of employees required before this law comes into effect.Not all states offer this plan.

Worker Compensation Covers

Medical treatment, temporary disability, permanent disability, vocational rehabilitation, death benefits for survivors.

Disability Insurance

Defined as reimbursement for income lost as a result of a temporary or permanent illness or injury. When patients are treated for disability diagnosis and other medical problems, separate patient records must be maintained. This insurance does not pay for healthcare services, but provides the disabled person with financial assistance.

Liability Insurance

Policy that covers losses to a third party caused by the insured, object owned or on the premise.


regionally based managed healthcare program for active duty and retired members of the uniformed service, their families, and survivors

Tricare standard

fee-for-service cost-sharing type option

Tricare extra

preferred provider organization type option

Tricare prime

The basic managed care health (HMO) plan offered by TRICARE with the point of service option.

Tricare co-payments are determined by

Active duty family members and Retirees and the family members and survivors of deceased personnel.


Created to provide medical benefits to spouses and children of veterans with total, permanent service related disabilities or for surviving spouses and children of a veteran who died as a result of service-related disability. A service benefit program therefore, there are no premiums. Members who receive TRICARE benefits do not qualify.

Gender rule

Coordination of benefits rule for child insured under both parent's plans under which the father's insurance is primary.

Birthday rule

The guidelines that determines which of two married parents with medical coverage from different employers has the primary insurance for a child; the parent whose day of birth is earlier in the calendar year is considered primary

Coordination of Benefits

Health insurance policy clause that applies to an individual covered by more than one medical insurance policy that explains how the policy will pay if more than one insurance policy applies to the claim.

Blue Cross

an insurance company that provides hospital care benefits, outpatient care, some institutional services, and home care.

Blue Shield

covers physician services, and in some cases dental and vision care.

Blue Cross Blue Shield Plans

group of independently licensed local companies usually non profit that contracts with physicians and other health entities to provide service to their insured companies and individuals. Most BC/BS plans offer HMO's, PPO's and POS plans.

Paper Claim

The traditional method used by providers for submission of charges to the insurance companies. Most common is CMS 1500.

Electronic Claim

An alternative to paper claims submitted to the third party payer directly by the physician or through a clearinghouse.

claims submission

the transmission of claims data either electronically or manually to third party payers or clearinghouse for processing.

claims processing

third party payers or clearinghouse verify the information found in claims about the patient and the provider.

claims adjudication

the process by which the claim is compared to payer edits and the patient's health plan benefits to verify that the required information is available to process the claim, claim is not a duplicate, payers rules and procedures have been followed, procedures performed or services provided are covered benefits.

non-covered benefits

this is any procedure or service reported on the insurance claim that is not listed in the payers master benefit list. This will result in the denial of the claim. Provider may be able to recover charges from the patient.

unauthorized benefits

procedure or service provided without the proper authorization or was not covered by a current authorization. The claim is denied and the provider cannot bill the patient for the charges.

Medical Necessity Edits

check the procedure codes match, procedures are not elective, procedures are not experimental, procedure is essential to treatment. procedures are furnished at the appropriate level.

accept assignment

The provider agrees to accept what the insurance company approves as payment in full for the claim.

new patient

A patient who has not received professional services from a provider (or another provider with the same specialty in the same practice) within the past three years.

established patient

A patient who has received professional services from a provider (or another provider with the same specialty in the same practice) within the past three years


a patient who has been admitted to a hospital for at least one overnight stay


a patient who receives in depth medical treatment, such as a surgical procedure, from a facility such as a hospital but not required to stay at the facility overnight


Services rendered by a physician whose opinion or advice is requested by another physician or agency in the evaluation or treatment of a patient's illness or suspected problem

explanation of benefits

Describes the services billed and includes a breakdown of how the payment is determined.


the amount of money an insured pays for insurance coverage paid monthly, semi annually, or annually to keep their policy in effect.


Specified amount of money that the insured must pay for covered medical expenses before the insurance policy begins to pay; usually annual amount per individual or family


A cost-sharing arrangement in which a member pays a specified charge for a specified service (e.g., $10 for an office visit). The member is usually responsible for payment at the time the service is rendered.

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