ICD-9 to ICD-10 Medical Coding Crosswalk

The United States healthcare system will discontinue its use of ICD-9-CM diagnostic codes and upgrade its entire system to the next revision of the code: ICD-10-CM. Because ICD codes are integral to the medical billing process, the changes are taking place at every level of the patient-provider-payer relationship. As the person who interacts with diagnostic codes on a daily basis, the medical coder must be prepared for this transition. A medical coder must be fluent in both ICD-9-CM and ICD-10-CM in order to make the switch as seamlessly as possible.

This change was originally planned for October 1st, 2014 , however, the U.S Senate  introduced a bill on March, 26th, 2014 that will delay the change of ICD-9-CM to ICD-10-CM until October 1st, 2015.

A process called crosswalking is used to translate from one code to another. Crosswalking means mapping or translating a code from one set to another. Use the AAPC tool below to crosswalk between the different coding systems.

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Learn Why the Change Will Happen

In order to understand this important shift in health informatics, it’s important to first look at why the change is occurring. ICD-9-CM is being phased out because it is outdated (published in 1978) and not flexible enough to deal with changes and expansions to medical procedures and diagnoses. To put it another way, ICD-9-CM is out of room. As new methods, diseases, and diagnoses are discovered, ICD-9-CM has been unable to find space in its code to accurately report these advances in medicine. ICD-9-CM caps out at around 13,000 codes, while ICD-10-CM has roughly 68,000.

Explore How the Change Will Happen

Being able to perform translations between ICD-9-CM and ICD-10-CM codes is a vital skill for a professional coder. One way in which translation is useful is that you can crosswalk codes back to ICD-9-CM if you are tracking or analyzing data. For example, if you are creating a report on the 2014 calendar year (which, again, will see the use of both ICD-9-CM and ICD-10-CM codes), it may be easier to crosswalk ICD-10-CM codes back to ICD-9-CM to create a standard set of data. Crosswalking will also help you update your records and programs.

There are, however, a number of difficulties in this process. Because ICD-10-CM expands so significantly on the body of codes in ICD-9-CM, there are a number of discrepancies and inaccurate or incomplete translations between the two code sets. It’s the medical coder’s job to watch out for these discrepancies and become familiar with crosswalking procedure as the deadline to switch from ICD-9-CM to ICD-10-CM approaches. Note that it is impossible in most cases to perform a 100 percent accurate translation from one code set to the other, as ICD-10-CM is significantly different from ICD-9-CM in terms of the format, concept, and structure.

One resource that will help you learn to crosswalk between the two code sets is the National Center for Health Statistics’ General Equivalence Mappings, or GEMs. These GEMs find and list equivalencies between the code sets, and they are considered the authoritative source for mapping between both sets. The GEMs allow you to map forward and backward between ICD-9-CM and ICD-10-CM. Coders should be familiar with both processes.

Understanding Different Code Matches

There are different types of matches that occur between the ICD-9-CM and ICD-10-CM code sets. The AMA identifies four types of matches between the two code sets, and an additional type that is reserved for “no match.”

One-to-one exact matches

In one-to-one matches, a coder is able to identify an exact match between the two code sets. These are relatively rare; only 5% of codes translate exactly from ICD-10-CM to ICD-9-CM, and just over 24 percent map directly in the opposite direction. One example is the ICD-9-CM code 416.0 (primary pulmonary hypertension) and the ICD-10-CM code I270 (primary pulmonary hypertension).

One-to-one approximate matches with one choice

A significantly more common occurrence in ICD code crosswalking is a one-to-one approximate match. In fact, 82.6 percent of ICD-10-CM codes can be backward-mapped this way, while 49.1 percent of ICD-9-CM codes can be forward-mapped to a similar degree of accuracy. It should be noted that this is not a direct translation, but more of a “close enough” approximation. For example, the ICD-9-CM code 422.91 (idiopathic myocarditis) is an approximate match for ICD-10-CM code I401 (isolated myocarditis).

One-to-one approximate matches with multiple choices

Exact and approximate matches with one choice make up the majority of ICD code crosswalking, but there are still a large number of codes that do not translate with the same level of accuracy. Approximate matches with multiple choices put much more responsibility on the coders, as they must pick the best fit from a number of similar choices. In certain cases, different diagnoses may fall under one code in the other set. For example, ICD-10-CM codes C220 (liver cell carcinoma) and C22 (hepatoblastoma) both correspond to ICD-9-CM code 155.0 (malignant neoplasm of the liver, primary). Each code set has instances of different diagnoses corresponding to only one code in the other. Coders must pay attention to these areas, as a miscoded diagnosis could affect the status of a claim.

One-to-many matches

By far the most difficult instance of crosswalking, one-to-many matches involve one code in a code set corresponding to several codes in the other. For instance, the ICD-9-CM code 80010 (closed fracture of vault of skull with cerebral laceration and confusion, state of consciousness unspecified) corresponds to two different codes in ICD-10-CM: S02.0xxA (fracture of the vault of the skull, initial encounter for closed fracture) and S06.339A (contusion and laceration of the cerebrum, unspecified, with loss of consciousness of unspecified duration, initial encounter). Essentially, the diagnosis code in one set must be created out of multiple codes in another set. The groups of codes that translate to a single code in another set are called “clusters.” Clusters are always between two and four codes in size. Some single codes may correspond to multiple clusters. All codes in a cluster need to be listed in order to fully represent its corresponding translation. This process of translating one-to-many matches requires diligence and constant review, as a code missing from a cluster creates fundamental inaccuracies in your report.

ICD-9-CM and ICD-10-CM Codes

The International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) is a system used by physicians and other healthcare providers to classify and code all diagnoses, symptoms and procedures recorded in conjunction with hospital care in the United States.


The International Classification of Diseases (ICD) code is one of the most essential pieces of the medical billing and coding process. Created by the World Health Organization (WHO) as a way of standardizing healthcare classification, ICD codes are diagnostic codes that represent all aspects of a medical diagnosis, including symptoms, social circumstances, cause of injury or disease, and more.

Exploring the ICD-9 and ICD-10 with Easy Lookup Tools
On this page are two tools for investigating ICD-9-CM and ICD-10-CM codes. They are a good place to get started with your education in medical billing and coding.

ICD-9-CM Tool

To use the ICD-9-CM tool, simply type the name of a disease or injury in the search field. The search engine should then give you the corresponding ICD-9-CM code. You can look up that code in the ICD-9-CM index, available through the CDC. You will have to download a copy and open it as an RTF file.

ICD-10-CM Tool

Use the ICD-10 -CM Tool to search by the name of the disease or injury, or by the code itself. You can then take your search results and use them to find more information on the World Health Organization’s version of ICD-10-CM. Click on the chapter title (like “diseases of the respiratory system”) in the drop-down menu on the left to get a list of code blocks that chapter contains. You can also click the arrow button to the left of the chapter title to navigate the drop-down menu from the sidebar.

Background on the ICD

ICD-9—the ninth revision of the International Classification of Diseases—was published in 1978 by the WHO and adapted for use in America by the NCHS. ICD codes were originally intended to be used for epidemiological purposes, but in the United States these codes are used by healthcare providers and insurance companies for billing and reimbursement.

In America, “CM” stands for “Clinical Modification,” which was instituted in the United States by the National Center for Health Statistics (NCHS) to provide additional information related to diagnosis and procedural codes. The CM allows for a much wider spectrum of specific information. ICD-9-CM is updated annually on October 1st in order to reflect new diagnoses, practices, and procedures in the healthcare industry.

How the ICD-9-CM Works

ICD codes create a standard vocabulary for identifying causes of illness, injury, and death around the world.

Physical copies of the ICD-9-CM codes are divided into volumes. Volume 1 contains a tabular list of codes (codes listed by number with the diagnosis following the number) and Volume 2 contains an alphabetical list of symptoms and diagnoses. The third volume for each of these contains procedure codes, which are only used by hospitals to report surgeries performed in their facility. Healthcare providers and insurance companies only use the first two volumes. For the purposes of this course, you will be looking up ICD codes entirely online, but it is still helpful to understand the organization of the ICD manuals.

The 5-digit numeric ICD-9-CM codes are organized from 000 to 999 according to the type of disease or injury they describe. For instance, codes in the 320-359 range represent diseases of the nervous system, such as encephalitis or meningitis. Codes 800-999 correspond to injury and poisoning, like dislocation (codes 830-839) or poisoning by drugs, medications, or other biological substances (codes 960-979).

Those first three digits in an ICD-9-CM code describe the general type of injury or disease, and are called the “category.” The category can be followed by a decimal point and up to two other digits, which provide more specific information about the type, location, and severity of the disease or injury. These last two digits are called the subcategory, and allow coders to increase the level of specificity of their report on a disease or injury.

Example:

The code 722.52 corresponds to degenerative disc disease of the lumbar, where:

• The 3-digit code, or category, “722” corresponds to “intervertebral disc disorders” in the list of diseases and injuries
  • The two-digit sub-subcategories refers to degenerative disc disease, lumbar

Generally speaking, the more digits in a code, the more specific the type, cause, and/or area of injury or disease.

There are also two sets of alphanumeric codes in ICD-9-CM. E-codes describe external causes of injury, while V-codes describe factors that influence health status and/or describe interactions with health services. An example of an e-code would be E905.2, which describes a scorpion sting causing poisoning and toxic reactions. An example of a V-code is V30.00, which describes a single live infant (V30) born in a hospital (V30.0) without mention of caesarean section (V30.00). Like the numeric codes in ICD-9-CM, each of these codes has varying degrees of specificity based on the incident.

Preparing for the Change to ICD-10

The ICD-9-CM will be replaced by the updated ICD-10 in late 2014. In order to comply with this change, healthcare providers, insurance companies, and clearinghouses must all be prepared to fully adopt ICD-10-CM by October 1, 2014. All claims filed with ICD-9-CM after that date will be rejected as non-compliant. Procedures arranged or completed before that date may still be filed with ICD-9-CM.

This switch is happening for a variety of reasons. For one, the ICD-9-CM is out of room. ICD-9-CM is set up so every category can only have 10 subcategories. As it currently stands, the ICD-9-CM can only classify around 13,600 diagnoses, compared to ICD-10-CM’s estimate of 69,000. As diagnoses continue to expand, the system can no longer support the breadth of medical study. The ICD-10 is also better suited for modern technological advances in the field, allowing for more optimized analysis of disease patterns and treatment outcomes.

There are similarities between the two code sets. The conventions and guidelines for assignment codes are largely the same, as is the organization of both sets. For instance, the first chapter, or category cluster, in both ICD-9-CM and ICD-10 is “Certain infectious and parasitic diseases,” so any professional qualified to manage ICD-9-CM should not have a problem with ICD-10. However, there are also key differences between the ICD-9-CM and ICD-10 systems, requiring a conversion on the part of the medical coder.

The composition of codes in the ICD-9-CM is primarily numeric, with limited alphanumeric additions, as discussed above. Valid ICD-9-CM codes are three, four, or five digits. In ICD-10-CM, all codes are alphanumeric and may be anywhere from three to seven digits, depending on the need for specificity. For instance, in ICD-9-CM, the cluster for “Certain infectious and parasitic diseases” is 001-139. In ICD-10 that same cluster would be labeled A00-B99.

Here is a broader example of the tabular breakdowns in ICD-9-CM and ICD-10:

ICD-9-CM

• Certain infectious and parasitic diseases (001-139)
  • Intestinal infectious diseases (001-009)
    • Cholera (001)
      • Cholera due to vibrio cholerae (001.0)
      • Cholera due to vibrio cholerae eltor (001.1)
      • Unspecified (001.9)

ICD-10

• Certain infectious and parasitic diseases (A00-B99)
  • Bacterial infections, other intestinal infectious diseases, and STDs (A00-A79)
    • Intestinal infectious diseases (A00-A09)
      • Cholera (A00)
        • Cholera due to vibrio cholerae (A00.0)
        • Cholera due to vibrio cholerae eltor (A00.1)
        • Unspecified (A00.9)

As you can see, the two code sets are largely similar, but with key differences. The alphanumeric numbering system of ICD-10 follows the same tabular tree as the numeric system in ICD-9-CM, adding a new subcategory within the A00-A79 cluster. As medical coders prepare for the shift, plenty of resources will be made available to translate ICD-9-CM into ICD-10.

Because ICD-10 and ICD-10-CM have a significantly larger set of codes than ICD-9 and ICD-9-CM, direct translation between the two code sets is impossible. The translation of ICD-9-CM codes into ICD-10-CM codes using a “crosswalk” program will be discussed in Course 11.

Watch for Coding Notes

In many cases, codes will have notes attached to them that prevent redundancies or inaccurate coding. These notes help medical coders accurately translate the diagnosis into code, and may include instructions like:

• “Code first,” in which case the coder must list an underlying condition or prior procedure
• “Includes,” which tells the coder which symptoms or afflictions the code contains
• “Excludes” or “excludes1,” which are especially important. Unique to ICD-9-CM, the “excludes” note instructs the coder that there is another, more appropriate code for a certain diagnosis. “Excludes1” indicates that the term listed under the “excludes1” field cannot occur simultaneously with the term listed above it. For example, systemic inflammatory response syndrome (SIRS) is coded as R65.1, but excludes severe sepsis (R65.2).

Those these notes can be complicated, they are essential for coding accurately. Even the smallest mistake can cause a medical claim to be denied, creating more work for the office and possibly delaying vital payments from the insurance company to a patient.

The Medical Coding Process

Medical coding is usage of standardized codes to diagnose the services rendered to a policyholder. Every possible injury and diagnosis is assigned a universal code that is readily understood by both healthcare providers and insurance companies so these parties are operating under the same umbrella of information. This process has become particularly useful, in terms of efficiency, ever since the claims process moved over to a largely digitized format.

Because clinical documentation practices vary, the process of abstracting code-able information about the patient involves some detective work. Coders must sift out the crucial information regarding diagnosis and treatment from the documentation. For example, a coder might receive a clinical file that looks like this:

• Date of Procedure: 6/13/20xx
• Patient Name: Jaswinder Patel
• DOB: 11/28/19xx
• HPI: Mr. Patel is a 27-year-old male who states he was doing light chores around the house when he fell off a ladder and felt sharp pain in his left hand. Upon receiving advice from his neighbor, he sought medical treatment.
• Past Medical: History of sinusitis
• Diagnosis: Multiple fractures of hand
• Procedure: Splint

Workers on the administrative side of healthcare and insurance may be prone to misunderstanding the technical terms in this document. Therefore, after the diagnosis and procedures are complete, this medical statement is given to the medical coder, who looks at this report and sifts out the most crucial information that needs to be reported to the insurance company: the diagnosis and procedure, or treatment, prescribed by Mr. Patel’s physician. Coders convert the diagnosis and treatments into a code set, “translating” the physician’s jargon into the universal medical language understood by all healthcare professionals.

The medical coder then hands the converted data to the medical biller, who sends the claim to the policyholder’s insurance company. Often, the medical coder and the medical biller are the same person.

Coding Diseases: Navigating the ICD

The standard accepted code set for medical diagnosis is called the International Classification of Diseases, or ICD. The ICD was created by the World Health Organization (WHO). Since the medical field, particularly in the realm of diagnosis and treatment, is constantly changing when new treatments evolve, many updates of the ICD have been issued since its initial conception. Despite being more than 30 years old, the Ninth Revision of the International Classification of Diseases (ICD-9) is still the primary code set in use in the United States. However, ICD-10 is due to be implemented in the United States on October 1, 2014 and students interested in this field should be prepared for the change, which is discussed further in Course 10.

Since there are thousands of different diagnoses needing to be represented in code, down to extremely specific diagnoses, the coding system needs to be extensive, but easy to navigate. Medical coders navigate these codes using conventions, or guidelines for selecting and sequences ICD-9-CM codes. They are generally set up in a tabular list to make navigating easier.

Reading the ICD codes

An ICD-9-CM code is broken down into categories and subcategories, and can contain as many as five digits. To take Mr. Patel’s injury, for example, coders use the ICD-9-CM code for “multiple fractures of hand bones” is 817, or 817.0. The three digits before the decimal denote the category. It falls within categories 810-819, or “Fracture of the upper limb.” The categories 810-819 themselves fall within the larger categories 800-999, or “Injury and poisoning.”

The digit after the decimal is called the subcategory. In the case of this diagnosis, 817 (817.0) is the default, since it has no subcategory and represents “multiple closed fractures of the hand bones.” If the fractures were open, the ICD-9-CM code would be 817.1, or “multiple open fractures of the hand bone.” The digit “1” marks the subcategory of open fractures.

To review, if a medical coder received a statement listing “multiple open fractures of the hand bone,” or alternative language that describes the same diagnosis, the coder may navigate the ICD-9-CM codes through the following breakdown:

• Injury and poisoning (800-999)
  • Fractures (800-829)
    • Fractures of the upper limb (810-819)
      • Multiple fractures of the hand bones (817)
        • Multiple open fractures of the hand bones (817.1)

The categories and subcategories break down in a logical manner. The medical coder will always have a comprehensive reference guide to break down the ICD-9-CM using this tabular system.

Coding Treatments: Using the CPT or HPCPS

In addition to translating the diagnosis to the appropriate ICD code, medical coders convert the treatment to a CPT code or HCPCS code. The differences are explored below.

Exploring the CPT

Despite how extensive it is, the ICD is just one portion of medical coding, as it covers only diagnoses. There is an entirely separate code set for medical treatments. This code set is called Current Procedural Terminology (CPT), and is copyrighted and maintained by the American Medical Association’s CPT Editorial Panel.

CPT codes refer to the wide range of all medical procedures, including every task and service performed by a medical practitioner. These codes are broken down into three categories. The majority of CPT codes exist in Category I. Category II is reserved for optional performance measurement, and Category III denotes emerging technologies.

Like the ICD system, CPT codes are broken down into categories. Unlike ICD codes, the CPT codes do not exist in detailed tabular format, and are broader in their organization.

Category I is broken down into six main sections:

• Codes for Evaluation and Management: 99201-99499
• Codes for Anesthesia: 00100-01999; 99100-99150
• Codes for Surgery: 10021-69990
• Codes for Radiology: 70010-79999
• Codes for Pathology & Laboratory: 80047-89398
• Codes for Medicine: 90281-99199; 99500-99607

Individual sections are then broken down further. For example:

• Codes for Evaluation and Management: 99201-99499
  • Office/other outpatient services 99201-9215
  • Hospital observation services 99217-99220
  • Hospital inpatient services 99221-99239
    Consultations 99241-99255
  • Emergency department services 99281-99288
  • Critical care services 99291-99292

Because the CPT is copyrighted and run by the American Medical Association, a comprehensive list of codes is generally not made available to the public.

Using the HCPCS

Not all insurance providers accept the CPT. Medicare and Medicaid (both of which will be discussed below) use the Healthcare Common Procedure Coding System (HCPCS). This coding system is comprised of two levels.

Level one consists of the CPT codes and is identical in its implementation. Level two is a coding system that is used to identity medical products and services not included in CPT codes, such as ambulance services, prosthetics, and durable medical equipment. These products and services are usually used outside of the medical practitioner’s office, and Medicare/Medicaid often cover these services where other insurance providers may not.

Medical Billing Errors

As a medical billing specialist, it’s critically important that you minimize any coding and processing errors as you file claims. Healthcare providers receive the majority of their revenue through the processing of successful claims, so any mistake you make could cost your employer. This course is designed to help you avoid the most common errors and keep denied and rejected claims at a minimum.

Understanding the Difference Between a Denied and a Rejected Claim

First, you need to know the difference between a denied claim and a rejected claim. A denied claim is one that has been determined by an insurance company to be unpayable. Typically, insurance companies explain the reasons in the Explanation of Benefits (EOBs) attached to the claim. Claims are often denied because of common billing errors or missing information, but can also be denied based on patient coverage. Denied claims can be appealed and reprocessed in some cases.

A rejected claim has been rejected because of errors. An insurance company might reject a claim because a medical billing specialist incorrectly input patient or insurance information. Once a medical billing specialist amends the errors on a rejected claim they can resubmit it for processing with an insurance company.

Common Errors Made When Filing a Claim

It is easy to overlook parts of a claim when you’re processing many in a given day. But if you can identify some of the more common mistakes medical billing specialists make, you can try to avoid them. Here are some of the most common mistakes made when filing a claim:

• Entering incorrect information for the provider (name, address, contact information, etc.)
• Entering incorrect information for the patient (name, sex, date of birth, insurance ID information, etc.)
• Entering incorrect information for the insurance provider (policy numbers, address, contact information, etc.)
• Inputting the wrong codes or confusing codes such as CPT codes, point of service codes, or ICD-9-CM codes
• Entering too few or too many digits for ICD-9-CM codes
• Inputting mismatched treatment and diagnostic codes
• Forgetting to input codes at all for services performed by a physician or another healthcare official

Again, every piece of information on a claim has to be accurate in order for it to be processed correctly. It is particularly important to make sure the correct codes are used. Be sure to familiarize yourself with all the relevant codes as well as patient, provider, and insurance information prior to filing a claim.

Other common billing errors include the following:

• Not having access to EOBs on denied claims: Sometimes an insurance company may forget to attach the EOB to a denied claim. In these cases, you won’t know the reason the claim was denied because the insurance company didn’t provide it at all or it was mistakenly sent to another provider. You can minimize problems with the EOB by keeping track of denied claims as soon as you receive them from insurance companies.
• Not verifying a patient’s insurance coverage: A patient’s health insurance can change at any time, sometimes without the patient knowing it. As a medical billing specialist, part of your job is to verify insurance coverage.
• Duplicate billing: Duplicate billing is an issue that occurs when you bill for the same service more than once. This might happen if more than one person at a provider’s office reports that a patient received services without checking whether or not those services had been paid for. The best way to avoid duplicate billing is for you to be extra vigilant about suspicious entries on a patient’s superbill and to communicate your concerns to a physician about them.

Some billing errors are simply beyond your control including the following:

• Upcoding: Upcoding occurs when physicians or medical coders enter codes into a patient’s superbill for services not received. Typically this is done to inflate the total amount a patient owes for receiving care at a healthcare provider. Upcoding is illegal and can lead to fines and criminal prosecution.
• Undercoding: Undercoding occurs when a physician or a medical coder leaves out codes from a patient’s superbill or codes them for less treatment than they actually received. Healthcare providers might undercode for healthcare services in an attempt to avoid audits or to minimize a patient’s cost. Undercoding is also illegal and can have legal repercussions.
• Sloppy documentation: Medical billing errors can also arise when physicians or other healthcare providers turn in sloppy documentation to medical billing specialists. A physician might have illegible handwriting, for example, making it hard to assign codes and bill for a patient’s healthcare. A physician’s documentation may also cause you to inadvertently undercode a patient’s bill.

How to Catch and Correct Errors Early

To avoid common medical billing: stay vigilant about simple mistakes on your end, be thorough when reviewing a patient’s superbill, and consult with your physician whenever you have questions about what should or shouldn’t be billed for. Most medical billing errors can be avoided well before claims are sent for processing with an insurance company, and it’s up to you to keep the claims moving through the system quickly and accurately. Here are a few tips to help you stay on track:

• Coordinate with everyone at the provider’s office: You aren’t the only person responsible for the information you in a claim. The physician who administered the actual healthcare and the personnel who collected a patient’s co-pay and insurance information also contributed to the superbill. So if you have any concerns about a claim, you can check with them to work out any issues before submitting the claim.
• Double-check patient and insurance information before filing a claim: Entering patient and insurance information incorrectly is one of the easier mistakes to avoid, but they still happen. The strategy for avoiding this mistake is simple: double-check your work.
• Study billing and coding trends: You can guard against coding mistakes by staying up to date on the latest medical billing codes. Medical billing codes change over time to accommodate modifications in healthcare regulations, newfound illnesses, and new treatments for illnesses and conditions. Be sure to study new codes and billing procedures as they become available.
• Follow up on claims: You can avoid and anticipate errors by following up on claims filed with insurance companies. A representative working on the claim for the insurance company might be able to tell you of any errors they find on their end, and thereby provide you with an opportunity to resubmit a claim before it gets denied.

Health Insurance Providers

Government Insurance Providers

The federal and state governments fund and operate several government insurance providers. Many of the government-operated insurance programs are specifically designed to cover a certain part of the population, such as veterans, the elderly, or low-income persons. Below are some of the government insurance providers that you will encounter when filing claims:

• Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA): This government program covers certain healthcare costs for dependents of veterans who are permanently disabled due to injuries or conditions suffered during service, as well as dependents of veterans who died during service.
• Consolidated Omnibus Recollection Act (COBRA): COBRA was a law passed by the federal government to serve as a safety net for individuals recently terminated by a company that provided health insurance. Under COBRA, terminated employees and their dependents can still receive health insurance from their previous company’s healthcare plan for up 18 months, and up to 36 months if they are disabled.
• Medicare: Medicare is a program started by the federal government to provide healthcare coverage options for persons over 65 years old, as well as younger people with disabilities. The Medicare program itself is broken up into several parts, each of which provides insurance that covers certain aspects of healthcare (such as prescription drug coverage) to eligible individuals.
• Medicaid: Medicaid is a program started by the federal government to offer healthcare coverage to low-income individuals. The costs of the Medicaid program are divided between the state and federal governments, a complication you will need to be aware of as you file claims. Note that all states have their own version of a Medicaid program, though they all must meet minimum requirements of care as established by the federal government.
• Children’s Health Insurance Program (CHIP): This program provides health insurance to children of families who can’t afford private coverage and whose incomes are too high to receive Medicaid coverage. CHIP is jointly funded by state and federal governments just like Medicaid, and each state has a different interpretation of its program.
• TRICARE: This healthcare program provides insurance to active-service members and their families, retired military personnel and their families, and the survivors of deceased service members. TRICARE (formerly known as Civilian Health and Medical Program of the Uniformed Services, or CHAMPUS) is funded and run by the federal government.
• Worker’s Compensation Insurance: This type of health insurance is available for employees who suffer injuries or illnesses while performing their regular work duties. Worker’s compensation insurance is required by law in most states.

There are other federal and state insurance programs available to those who are eligible, but those mentioned above make up the majority that you will encounter as a medical billing specialist. Check out the federal government’s resource for more information about government insurance providers.

Commercial Insurance Providers

Commercial insurance providers are private insurance companies that contract with businesses or individuals to help cover healthcare costs according to criteria set forth in a formal health plan. Private health insurance plans typically require that the company or the individual receiving coverage pay a predetermined deductible or a monthly premium before benefits take effect.

Commercial health insurance providers offer plans that can be sold individually or collectively as a group plan. Plans offered by commercial insurance providers range in price and in the scope of services covered. Coverage from commercial providers depends on a number of factors, including a patient’s personal medical history, family medical history, and the amount of money the patient (or the sponsoring employer) is willing to spend on premiums, co-pays, and deductibles.

Most Americans who have health insurance have plans with private insurers. According to a recent survey by the Center for Disease Control, nearly 64.2% of insured Americans have private health insurance. Commercial insurance providers include companies like Aetna, United Health Care, and Prudential.

Key Differences Between Government and Commercial Insurance Providers

It is important to keep in mind that commercial insurance providers are for-profit institutions whose success depends on the premiums that they receive from insured businesses and individuals. As such, commercial insurance providers are likely to provide coverage for people who have an uneventful medical history rather than someone with a long history of medical problems. Commercial insurance providers make money by avoiding as much risk as possible in their health plans. If a private insurance company mostly covers people who need constant medical attention for chronic illnesses or conditions, that company would be in danger of offsetting the revenue generated by its premiums.

Government insurance providers are a reliable alternative for certain people denied coverage by commercial insurance providers. Because government insurance providers aren’t interested in generating a profit from premiums, they can afford to cover “riskier” people.

About Blue Cross Blue Shield

Blue Cross Blue Shield is an exception to typical health insurance providers because it is neither a for-profit privately owned company nor a program run by the federal government. Blue Cross Blue Shield is a federation of 38 independent health insurance companies across the U.S. that covers over 100 million Americans. Blue Cross Blue Shield has partnered with a number of government insurance providers like Medicare to help process claims associated with Parts A and B of Medicare coverage. Blue Cross Blue Shield companies also enroll in the Federal Employee Program (FEP), providing private health insurance to over 5 million federal employees. As a medical billing specialist, you should become more familiar with Blue Cross Blue Shield’s role in the American healthcare system.

Types of Health Insurance Coverage

There are a number of ways in which health insurance carriers provide coverage. Health insurance coverage can be quite complex, as it involves the coordination between a healthcare provider, the health insurance provider, and the actual person receiving care. As a medical billing specialist, you will need to be especially aware of the role that each party plays in these coverage plans as you process claims. Some of the methods of coverage include managed care, indemnity policies, and high-deductible plans.

Managed care

Managed care is the most common form of health insurance coverage. Managed care coverage is administered by organizations that contract with healthcare providers to create an active network of participating providers. The three main components of managed care are preferred provider organizations, health maintenance organizations, and point of service plans.

• Preferred provider organizations (PPOs): PPOs operate off a list of preferred healthcare providers that patients can choose from for their coverage. Patients save the most money on their healthcare plans by selecting the preferred providers affiliated with a PPO. Providers on the preferred list are considered “in-network,” while those not on the preferred list are “out-of-network” providers. Sometimes an insurance carrier will not cover a person who receives treatment from an out-of-network provider, though PPOs tend to have more coverage options for out-of-network providers than HMOs.
• Health maintenance organizations (HMOs): HMOs are groups of physicians, medical facilities, and healthcare services that work to keep patients under the care of providers within their network. Healthcare providers in HMOs coordinate a patient’s healthcare decisions and suggest a suitable hospital for urgent care. Because of the close-knit healthcare community in HMOs, members enrolled with these organizations tend to have limited provider options. The upside to HMO membership is that patients tend to pay less in deductibles and receive higher quality medical care coverage at facilities within the HMO network.
• Point-of-service Plans: Point-of-service plans form a hybrid between PPOs and HMOs. As with HMOs, point-of-service plans allow you to select physicians and services from within a dedicated network of providers. Unlike HMOs, you have the option of coverage for care received from out-of-network providers. Note that patients in point-of-service plans have to get a referral before being covered by out-of-network providers, and they likely have to pay a deductible. Some HMOs offer point-of-service plans to people who want more options with their healthcare coverage.

Indemnity policies

Indemnity policies, or fee-for-service insurance, allows people the freedom to choose whatever healthcare provider they want and receive some form of coverage for these services. Patients covered by an indemnity policy can go to any healthcare provider and receive care, even when traveling across state lines.

The caveat to indemnity policies is that patients are typically required to pay a deductible or out-of-pocket fee before they start to receive coverage. This means patients with an indemnity policy can able to receive emergency room care at a hospital of their choosing, but they might have to pay a sizable deductible (ranging from a few hundred to several thousand dollars) before insurance carriers will pay for their care. Many indemnity policies allow patients to choose how much they pay for their deductible, and that amount is commensurate with the level of coverage they receive from insurance carriers.

High-deductible plans

High-deductible plans have low premiums and high deductibles, which make them enticing to those who don’t want to pay for health insurance up front. High-deductible plans may be a preferable coverage option for people with a clean bill of health who don’t anticipate requiring any medical services in the near future. Of course, when those with a high-deductible plan do require care, they are responsible for covering the cost of their care until they reach the predetermined deductible. However, people with high-deductible plans don’t have to pay the deductible before receiving coverage for preventive care services. Some people opt to enroll in health savings accounts or health reimbursement arrangements to help mitigate the potential costs of high-deductible plans:

• Health savings account (HSA): HSAs allow people to pay for certain medical expenses (including expenses incurred before meeting a deductible) using nontaxed funds. Patients build their savings in an HSA by contributing a portion of their paycheck or other earnings on a regular basis. Funds that remain at the end of the year can often be rolled over to the next year. Furthermore, people with an HSA keep their funds once they leave a job and can continue contributing to their HSA with their next employer. However, there is a limit to the amount of earnings that can be contributed to an HSA.
• Health reimbursement arrangement (HRA): HRAs are different from HSAs in that employers, not the employees, contribute funds to the account that is used to offset healthcare costs. Employees lose their HRA funds if they leave or are terminated from a company, and any funds unused by the end of the year are no longer accessible in the following year.

Medical Billing for Medicaid/Medicare

The Difference Between Medicaid and Medicare

Medicaid and Medicare are often mentioned in the same breath, but the two programs perform completely separate functions in the American healthcare system.

Medicare

Medicare is a federal healthcare program created in 1965 with the passage of the Social Security Amendments to ensure that citizens 65 and older as well as younger persons with certain disabilities have access to quality healthcare. Medicare is administered by the Centers for Medicare and Medicaid Services (CMS). CMS manages Medicare programs by selecting official Medicare administrative contractors (MACs) to process the Medicare claims associated with various parts of Medicare. Medicare as a healthcare plan is divided into different parts, each of which cover a specific healthcare service:

• Part A (Medically necessary services): Part A of Medicare covers basic healthcare necessary to treat a pressing medical condition. Covered services may include hospital care, skilled nursing care, nursing home care, hospice care, and other support deemed essential to treating an illness or a condition.
• Part B (Preventive Care): Services covered in Part B include services or supplies needed to treat or prevent a medical condition. Part B of Medicare also covers some preventive care services such as inpatient/outpatient mental health, clinical research, and ambulance services.
• Part C (Medicare Advantage Plan): Part C of Medicare covers all healthcare services through a provider organization such as a hospital or a private practice. Patients must be enrolled in Medicare Parts A and B to qualify for Part C.
• Part D (Prescription Drugs): Part D was created in 2003 with the passage of the Medicare Prescription Drug, Improvement, and Modernization Act. It covers many prescription drug costs and is paid for by monthly premiums of Medicare enrollees.

For more information regarding Medicare, check out the federal government’s official page for Medicare.

Medicaid

Medicaid is a program that provides healthcare coverage for low-income families and individuals, for persons with disabilities, and in some cases the elderly. For medical billing purposes, the most important difference between Medicare and Medicaid is the organization of each program. Medicare is a program provided by the federal government through CMS and has universal applications across state boundaries. Medicaid is a program funded by both state governments and the federal government. States provide Medicaid benefits in cooperation with CMS and federal guidelines. Medicaid programs differ from state to state, though they must all meet certain standards established by the federal government.

Medicaid coverage plans can change from state to state. Some states have extended their Medicaid programs to cover comprehensive healthcare issues for recipients, while other states only meet the minimum program requirements as mandated by the federal government. The following are some of the minimum Medicaid services covered:

• Inpatient/outpatient hospital services
• Family planning care
• Pediatric services
• Prescription drug costs
• Dental healthcare and services
• Mental health services
• Occupational, physical, and speech therapy

Rules of Medicaid eligibility also vary by state. Some states have stricter rules for eligibility, while others are more relaxed. As a medical billing specialist you should understand Medicaid eligibility in your state. You can visit the official Medicaid site in addition to the Medicaid page for your state to learn more.

Medical Billing for Medicaid

Medical billing for Medicaid is more complicated than medical billing for Medicare simply because Medicaid programs differ from state to state. Some citizens eligible for care in one state may not be eligible for care in another state, or they may receive a more or less benefits depending on the state in which they receive care. Billing codes, claim submission protocols, reimbursement rates, and other billing information will vary by state.

You will start the medical billing process for Medicaid by filling out a state claim form for the services and procedures covered. Most state Medicaid claim forms will be divided into main two parts: information regarding the patient and/or the insured person and information regarding the healthcare provider. As you complete the Medicaid form you will input codes from the following code sets:

• International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) Codes: ICD-9-CM is the system by which official codes are assigned to medical diagnoses and procedures relating to hospital use in the U.S. The ICD-9-CM lists the official disease codes for relevant medical conditions and procedures. ICD-9-CM codes are a series of alphanumeric digits followed by a decimal point followed by one or two numeric digits.
• Place of Service Codes: Place of service codes specify where the patient received their medical care or supplies. Place of service codes are ascribed to medical facilities such as inpatient hospitals, nursing facilities, and hospices. Place of service codes are typically two digits long.
• Healthcare Common Procedure Coding System (HCPCS) Level II Codes: HCPCS Level II codes are used to identify and categorize supplies, services, and products not included in CPT codes. HCPCS Level II codes may include ambulance services and prosthetics. HCPCS Level II codes have a single letter followed by four numeric digits.
• Current Procedural Terminology (CPT) Codes: CPT codes (also known as Level I HCPCS codes) are a subset of the HCPCS and they are used for identifying and categorizing medical procedures and services. CPT codes are created and revised as necessary by an official editorial board in conjunction with the American Medical Association. CPT does are five numeric digits long.

You can check the format of the Medicaid claim form in the state where you live in addition to state Medicaid policies on the official Medicaid webpage.

Medical Billing for Medicare

Medicare functions as a single-payer healthcare system that pays insurance companies on behalf of people enrolled in its various programs. It’s up to medical billing officials to submit claims to appropriate MACs for processing after a person has received care covered by their Medicare plan.

Your duties as a medical billing specialist include inputting information from a provider’s superbill into compatible medical billing software. This includes provider information, patient information, information regarding treatment the patient received, and any relevant medical codes. Once you’ve input the necessary information into the medical billing software, you will either print out a CMS-1500 claim form for submission via mail or you will submit another claim form electronically to MAC for processing. As you file claims associated with Medicare, you will need to input medical codes similar to those you would use for Medicaid claim forms including CPT, ICD-9-CM, and place of service codes.

In order to properly understand how to file claims associated with Medicare coverage, consider the separate parts of the Medicare healthcare program.

Part A: medically necessary services

You will process claims associated with Part A of Medicare (medically necessary services) if you’re a medical billing specialist working with hospitals, clinics, and other facilities that offer inpatient care. You file Part A claims on behalf of your provider using the UB-04 medical claim form (also known as the CMS-1450 form). The UB-04 is the uniform institutional provider hardcopy claim form accepted for billing third-party providers. It is also the only hardcopy claim form that CMS accepts from institutional providers such as hospitals or skilled nursing facilities. When filing the UB-04 form, you should note that not all payers are required to complete the same data fields. Do your research to determine what fields are appropriate for each claim.

Part B: preventative care

As a medical billing specialist working for an outpatient healthcare provider, you will usually process claims associated with Part B of Medicare (preventative care). You file Part B claims using the CMS-1500 form, which is the standard claim form used by healthcare providers to billing Medicare carriers.

These forms must be purchased from legitimate sources other than the CMS, like the National Uniform Claim Committee (NUCC), which is responsible for updating and maintaining the CMS-1500. Be sure to check the guidelines for printing and preparing CMS-1500 forms before you process any claims. Note that the CMS-1500 form can also be used to bill some state Medicaid programs.

Parts C and D: to be filed separately

Claims related to Parts C and D of Medicare are relayed through a private insurer and should never be filed through Medicare. You won’t file Medicare claims with Parts C and D because private health plan carriers have agreements with Medicare to receive a certain amount per member every month. Part D of Medicare coverage may change depending on the person receiving care because coverage depends on the drugs involved. Some drugs aren’t covered by Part D at all. Thus claims filed through Parts C and D of Medicare should be treated like any other claim handled through a private health plan carrier.

Check out the Centers for Medicare and Medicaid Services for detailed information about medical billing and coding procedures related to Medicare.

Processing Claims for Medicare and Medicaid

Know how to handle claims through these government healthcare programs.

Medicare claims

As a medical billing specialist, Medicare claims you file on behalf of the provider are sent directly to nearby MACs for processing. MACs typically take around 30 days to process each claim they receive.

Part A claims: Medicare pays the provider directly. Any deductibles, co-pays, or other fees that apply after Medicare pays the provider must be satisfied by the patient.

Part B claims: Medicare pays either the provider or the patient for care covered by the plan, which depends on who accepts assignment of the claim. If the provider accepts assignment of the claim, Medicare will pay them for 80% of the approved amount. The remaining 20% will be paid to the provider by the patient. If the provider does not accept assignment of the claim Medicare will pay the patient the approved amount for care received, and they will then pay the provider.

Medicaid claims

Processing billing for Medicaid claims can be trickier than those filed under Medicare because Medicaid claims must adhere to both federal and state guidelines. Providers who participate in Medicaid must meet these guidelines, and as a medical billing specialist you should be aware of any discrepancies between federal and state guidelines as you process claims. For example, a provider must adjust the remaining balance once meeting any applicable charges for a co-payment or deductible and after Medicaid has paid what they are allowed to pay under the Medicaid fee schedule.

Note also that Medicaid is officially the payer of last resource for a claim, meaning that if a person has any other health coverage for services rendered, those institutions should be billed before Medicaid.

Medical Billing Insurance Claims Process

The medical billing insurance claims process starts when a healthcare provider treats a patient and sends a bill of services provided to a designated payer, which is usually a health insurance company. The payer then evaluates the claim based on a number of factors, determining which, if any, services it will reimburse.

Let’s briefly review the steps of the medical billing procedure leading up to the transmission of an insurance claim. When a patient receives services from a licensed provider, these services are recorded and assigned appropriate codes by the medical coder. ICD codes are used for diagnoses, while CPT codes are used for various treatments. The summary of services, communicated through these code sets, make up the bill. Patient demographic data and insurance information are added to the bill, and the claim is ready to be processed.

Processing Claims

A number of technical protocols and industry standards must be met for insurance claims to be delivered expediently and accurately between medical practice and payer.

Medical billing specialists typically use software to record patient data, prepare claims, and submit them to the appropriate party, but there isn’t a universal software application that all healthcare providers and insurance companies use. Even so, insurance claims software use a set of standards, mandated as by the HIPAA Transactions and Code Set Rule (TCS). Adopted in 2003, the TCS is defined by the Accredited Standards Committee (ACS X12), which is a body tasked with standardizing electronic information exchanges in the healthcare industry.

There are two different methods used to deliver insurance claims to the payer: manually (on paper) and electronically. The majority of healthcare providers and insurance companies prefer electronic claim systems. They are faster, more accurate, and are cheaper to process (electronic systems save around $3 per claim). But because paper claims have not yet been completely removed from the insurance claims process, it is important for the medical biller and coder to be well versed with both electronic and hardcopy claims.

Filing Electronic Claims

Certain technologies have been introduced into the system in order to expedite claim processing and increase accuracy.

Software

Some healthcare providers use software to electronically enter information into CMS-1500 and UB-04 documents. Using “fill and print” software eliminates the possibility for unreadable information. This software may also include certain types of “scrubbing,” or tools that check for errors in the documents. While these tools do decrease the amount of errors made in filling out claim forms, they are not always 100 percent accurate, so medical billers should remain diligent when filling out forms using software.

Optical Character Recognition (OCR)

OCR equipment scans official documents, electronically isolating and recording information provided in the different fields, and transferring (or auto-filling) that information into other documents when necessary. While OCR technology helps make hardcopy claim processing much more efficient, human oversight is still needed to ensure accuracy. For instance, if the OCR miscalculates a simple digit in a medical code, that error must be flagged and manually corrected by a medical billing specialist.

Note that when OCR equipment is not available, it is possible for a medical billing specialist to manually convert CMS-1500 and UB-04 documents into digital form using conversion tools called “crosswalks” (note that the same term applies for tools used to convert ICD-9-CM codes to ICD-10-CM). You can find crosswalk references from a number of different sources.

Filing Manual Claims

Paper claims must be printed out, completed by hand, and physically mailed to payers. The healthcare industry uses two forms to submit claims manually. Since processing paper claims requires more manual interaction with forms and data, the opportunity for human error increases compared to electronic claims. Documents can be printed improperly, and handwritten codes can be incorrect or illegible. The forms can also be mailed to the wrong address, with insufficient postage, or disrupted by logistical complications with the delivery services. These errors are costly for the healthcare provider, often resulting in form resubmission (a time-consuming process) and payment delays.

Generally, healthcare professionals like family physicians use form CMS-1500, while hospitals and other “facility” providers use the UB-04 form.

CMS-1500

The CMS-1500 is the universal claim form used by non-institutional healthcare providers (private practices, etc.) to bill Medicare for Part B covered services and some Medicaid-covered services, and is accepted by most health insurance providers. The CMS-1500 is maintained by the National Uniform Claim Committee (NUCC), and was previously updated to include National Provider Identifiers (NPIs), or unique numbers required by the Health Insurance Portability and Accountability Act (HIPAA).

Form CMS-1500 contains all the basic information needed to submit an accurate claim. This includes fields for the patient’s demographic information, insurance information, and boxes in which to provide medical codes and corresponding dates of service. Certain boxes are used exclusively for Medicare and/or Medicaid. It is important to note that different payers may provide different instructions on how to complete certain item numbers. The medical biller and coder should be familiar with specific payer requirements before filling out the form.

UB-04

Form UB-04, also maintained by the NUCC, is very similar to the CMS-1500, but it is used by institutional healthcare providers, such as hospitals. Like the CMS-1500, the UB-04 is used in lieu of electronic claims when the facility meets any number of exceptions granted by the ASCA. It is the responsibility of the facility to self-assess whether these designated exceptions apply to their operation, granting usage of manual claims. Also similar to the CMS-1500, certain payers may not require all fields, or data elements, to be completed.

The role of clearinghouses

Once a file is created using these standards, it is usually sent off to a clearinghouse. The clearinghouse is a third-party operation that primarily acts as a middleman between healthcare providers and insurance carriers.

Think of the clearinghouse as a central hub, or a single location where all claims are sent to be sorted and directed onward to all the various insurance carriers. Typically, clearinghouses use internal software to receive claims from healthcare providers, scrub them for errors, format them correctly in accordance with HIPAA and insurance standards, and send them to the appropriate parties. Clearinghouses generally keep medical practices in the loop during this process by providing reports on the status of claims.

This third party is necessary because healthcare providers typically have to send high quantities of insurance claims each day to a variety of different insurance providers. Each of these insurance providers may have their own submission standards. If a medical practice’s billing staff was solely responsible for transmitting insurance claims under both insurance and HIPAA requirements, the potential for error would increase dramatically, not to mention the time required for formatting each claim to specific insurance carrier.

When choosing a clearinghouse, a healthcare provider should consider two main factors:

• Does the clearinghouse have the capability to work with the insurance providers the practice works with most often?
• Can the clearinghouse accommodate claims transmissions from the insurance provider’s practice management software?

Confirming these questions ensures that all transmissions run smoothly.