Cracking the codes

There is a lot of confusion among independent practitioners when it comes to insurance coding. Garry Chapman explains how it works and unlocks some of the complications

Many consultants may think that billing their clinical information for their private practice work is a straightforward process but in reality this is often not the case.
My company’s analysis shows that in the practices of over 90% of consultants that join us we find there is a large element of their billing which is not being done correctly.
This is not surprising due to the complex rules that exist within the PMI structure which is based upon the Clinical Coding and Schedule Development (CCSD) schedule and the way each private medical insurer (PMI) calculates their schedule of fees.
I will try and articulate some of the complexities that exist within the market and explain why it is so difficult for the private practice to manage these – especially as they can change on a regular basis.

CCSD codes
The CCSD codes that the industry use were created by a group of PMIs – Bupa, AXA PPP, Aviva, Pru Health and Simply Health.
Representatives from these organisations sit on the board of this group which is managed by Capita Health.
The CCSD schedule, which stands for Clinical Coding and Schedule Development, was launched in 2006 and now has 2,070 codes that are constantly reviewed and can be updated on a monthly basis.
This can take the form of a just a narrative change or it can be more significant such as not allowing particular codes to be billed together – commonly referred to as bundling and unbundling – or it can also be a new or replacement
One of the interesting things is that the CCSD schedule and its rules are not mandatory; it is down to each PMI and they can either adopt the CCSD schedule in whole or in part.
Due to this, you get the situation where a PMI can decide that they do not recognise a specific code or have their own rules regarding using multiple codes together which override the CCSD guidelines.

Fees schedules
In conjunction with the above complexities, each PMI decides upon the amount of money that they will contribute for each CCSD code, commonly referred to as their schedule of fees.
This fee can be for a specific code or it can be for a particular classification where the PMI will place CCSD codes into classifications such as minor, inter and major for pricing purposes.
The fee schedule can differ quite widely between each PMI and, in some cases, these prices can deviate by up to 100% for the same code.
On top of this, when you bill multiple codes, not only do you have to identify that the codes can be billed together, you then need to apply a specific formula that each PMI will have in order to calculate the correct fee.
I have listed just three examples below in order to illustrate the differences:

Example 1. PMI formula – If three codes are used, you multiply the price of the first code by 40% and add that figure to the price of the first code. If two codes are used, then multiply the price of the first code by 25% and then add that to the first code.

Example 2. PMI formula – If three codes are used, you take the first code price and add 50% of the second code price and then add 25% of the third code price

Example 3. As in example two, but you cannot charge for the third code.

Insurers’ variables
In conjunction with the above, there are many variables that you need to know in order to bill correctly.
These include, but are not limited
to, the following:
One PMI will not allow a follow-up consultation or inpatient care to be billed within ten days of surgery, as they determine that the CCSD price includes the post-op element of care.
Another PMI will allow follow-up consultations to be billed without any time limits, but the number of inpatient care days which is included within the CCSD code can differ, depending upon the specific CCSD code performed in surgery.
All other PMIs will allow inpatient care to be billed without any of the above restrictions.
A PMI will allow a local anaesthetic (AC 100) to be billed with selected minor procedures, but they do not publish which CCSD codes where this rule applies.
A PMI will only allow certain codes to be billed in conjunction with a follow-up consultation.

Recent changes
On top of the complexities mentioned above – which, as previously stated, can change on a regular basis – you also have to keep an eye on the PMI fee schedules, as they can also change quite frequently too.
I have highlighted below some of the changes in the past 12 months:

  • In February 2012, a PMI recently moved two common ENT codes (E3680 & D1510) into a lower category, resulting in the fee being reduced by 50%;
  • In August 2011, a PMI increased a common urology code (M4510) by 10%;
  • In April 2011, a PMI increased all anaesthetist fees by 20% in early 2011.

It is difficult to keep up to date with all these changes, particularly where the price increases, as some insurer are better than others at communicating this information.
In summary
Keeping up to date with all of the changes that occur both within the CCSD schedule and each PMI’s schedule of fees is an onerous task at the best of times.
But it is particularly difficult within the current climate and it is no surprise when we find out that it is not being done correctly.
As it is the consultant’s responsibility to ensure that their billing is done correctly, they need to ensure that the following happens within the practice – or use a professional medical billing company to manage this process for them.

  • You need to understand the complexities of the CCSD schedule including what codes can be billed together (bundling and unbundling rules);
  • You need to ensure that you code correctly by understanding the variables that exist within each PMI and their schedule of fees;
  • You need to understand the different formulas involved for each PMI for multiple codes;
  • You need to be aware of the different rules each PMI has over and above the CCSD schedule.

While the above is an administrative burden on the practice, if it is not done properly and on a regular basis, at best you are probably losing thousands of pounds and at worst you are running the risk of being de-recognised by the PMI due to incorrect billing.

Garry Chapman is managing director at Medical Billing & Collection

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