There can be much confusion about billing and coding among clinicians. The rules and guidelines can be difficult to sort out and understand but understanding billing and coding is so vital to the bottom line of payment: if you want to get reimbursed by any third party payer, you must properly code the services you provide to your patients.

Reimbursement for provider services is based on either the provider’s contracted rate in cases where there is a managed care contract in place or the usual and customary rate for non-participating providers. The reimbursement rate is associated with the CPT code. Choosing the appropriate code is, therefore, directly connected to payment so choosing the best and most accurate code for each service ensures optimum payment.

Many variables affect CPT coding from the obvious to the more obscure. Some of these variables include where the services are provided, who provides the service, and the duration of the service. Connected to the CPT codes are Place of Service (POS) codes. Where a service is provided may change the reimbursement amount in some cases with certain carriers.

The description following each code is usually sufficient to make a code choice. However, in some cases, code description leaves too much room for interpretation. In situations where additional information is needed, the billing guidelines provided by the Centers for Medicare and Medicaid Services (CMS) can prove helpful. The following are some examples.

CPT code 90801, Psychiatric diagnostic interview examination. This description is vague. If we look at the CMS billing guidelines for this code it states, “A psychiatric diagnostic interview examination consists of elicitation of a complete medical history (to include past, family and social); psychiatric history, a complete mental status exam, establishment of a tentative diagnosis, and an evaluation of the patient’s ability and willingness to participate in the proposed treatment plan.” This is much more helpful. We can clearly see all the service components the code includes and what information should be documented in the clinical record, an important point we will discuss in more detail later.

Now, let’s look at some of the variables that affect code choice. The first and most obvious is time. Notice the above code, 90801, has no associated time limitation, though most clinicians set aside 45-60 minutes of face-to-face patient time for the initial diagnostic evaluation. Notice that the description does not mention any limitation of place of service. This means that this service can be performed in various clinical settings including the patient’s home. Another limitation often associated with CPT is who is included in the treatment service. In this service, our object of service is the individual patient. Although, the description does not specifically describe “face-to-face” as some other codes do, the term “interview” implies a one-on-one event.

The next set of codes we will review is the Individual Psychotherapy services, codes 90804-90822. Each of these codes includes a time limitation and some include a place of service limitation. When time is a stated limitation, time must be the primary consideration in code choice and time must be clearly documented in the medical record. To choose the appropriate code based on time, the minimum time element must be met in order for the code to be considered valid. For instance, a 55 minute session would be coded as 90806 as would a 74 minute session. The minimum requirements of CPT 90808 (75-80 minutes) are not met. This code is, therefore, not valid for use in this case. Document start and stop time in the record as well as total time for each service performed.

Also included in the description is where the service is performed (office or outpatient facility, partial hospital, inpatient hospital, residential care setting, etc.). A 20-30 minute individual psychotherapy service provided to a patient in an inpatient hospital or skilled nursing facility would be billed using code 90816 rather than 90804. The description for 90816 reads Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an inpatient, hospital, partial hospital or residential care setting, approximately 20 – 30 minutes face-to-face with the patient. Again, notice the specific elements of the code: Place of service, time, and to who services are being rendered are all specified.

This brings us to another element of billing known as Place of Service codes. These 2 digit codes are directly linked to the CPT codes and must match or claims will be rejected by the insurance company. To follow is a sample listing of CPT codes and associated place of services codes. You will notice that some codes can be billed in more than 1 place of service while others are unique to a specific place of service. When a CPT code can only be used in a specific place of service, this information is listed in the code description.

This is just a partial list for the purposes of the example. You will find a complete list of all place of service codes and descriptions as part of some of the resources listed at the end of this article.

The descriptions associated with the CPT codes for individual psychotherapy clearly state that these services are provided face-to-face with the patient. If the patient was not seen, this element was not met. The code cannot be used to report the service. Other psychotherapy codes may be appropriate for use. CPT codes in the range of 90846 – 90857 include services rendered to families (with and without the patient present), multiple family groups, and non-family groups. None of these codes specify time or location limitation and can be used in a variety of settings and for varying amounts of time.

Testing services represent another coding challenge. Testing is billed in hours of time. The exact description reads, “Psychological testing (includes psychodiagnostic assessment of emotionality, intellectual abilities, personality, and psychopathology, e.g. MMPI, Rorschach, WAIS) per hour of the psychologist’s or physician’s time, both face-to-face time administering tests to the patient and time interpreting these test results and preparing the report. “ You will notice that these codes include total testing time, total scoring time, and total report writing time. These three components might not be completed on the same day. The total of all hours can be billed on 1 day or as the units occur over several days. It is appropriately billed either way.

Let’s move on to coding the “why” of the patient appointment. First, let me address the obvious question: What’s the difference between DSM-IV-TR codes and ICD-9-CM codes? For the most part, DSM codes and ICD-9 are the same. The DSM was initially based on the World Health Organization’s ICD-10 coding system and then it was cross-coded to the ICD-9 diagnostic coding system used in the U. S. The major difference between DSM-IV and ICD-9 are code specificity. Most third party payers require diagnoses to be coded to highest level of specificity. ICD-9 lists diagnosis codes to the highest level of specificity whereas the DSM-IV does not. The ICD-9 is therefore the better resource for coding for claims submission and establishing medical necessity. At least until Oct 1, 2013, when ICD10 will permanently replace ICD-9. A detailed discussion about the transition to ICD-10 will be discussed in the near future.

There are some basic rules that should be followed when choosing diagnosis codes. Code why the services was rendered, the primary reason the patient was seen, as the primary diagnosis. Code any co-existing and/or contributing diagnoses second. Remember to code to the highest level of specificity. Do not code any conditions that are not relevant to the patient’s treatment. Regularly evaluate the primary code and adjust or change the code as necessary. Avoid the use of non-specific codes. These codes are identified as “NEC – not elsewhere classified” or “NOS – not otherwise specified”.

While correct coding is essential for getting paid by third party payer, documentation of the patient’s clinical record is just as important. The information in the clinical record must support medical necessity and the rationale for code choice. Specific information should be included in the record each time the patient is seen. Knowing how to properly document the clinical record will protect you if you ever get audited. In a future post, we will address the connection between coding and documentation and the importance of developing a compliance plan for audit protection.