Coding for Diagnostic Labs
Correct coding is critical for reimbursement for diagnostic lab services. Incorrect, incomplete, or outdated coding can lead to claim rejections and denials. Diagnostic labs must continuously update and verify the accuracy of the CPT (Current Procedural Terminology), ICD (International Classification of Diseases), and HCPCS (Healthcare Common Procedure Coding System) codes they use. Common errors include:
Incorrect CPT Codes. Using outdated or incorrect Current Procedural Terminology (CPT) codes is a common mistake. Labs must ensure they use the most current and appropriate CPT codes that accurately describe the tests performed.
ICD Coding Mistakes. Diagnostic labs must use the correct International Classification of Diseases (ICD) codes to indicate diagnoses. Errors in ICD coding can lead to claims being rejected due to a perceived lack of medical necessity or mismatch with the CPT code.
HCPCS Level II Errors. Health Care Procedure Coding System (HCPCS) Level II codes are used for billing various medical equipment, supplies, and non-physician services. Errors in these codes can result in non-reimbursement for these items.
Modifier Misuse or Omission. Modifiers are used to provide additional information about a procedure. Failing to use the correct modifier, or not using one when needed, can lead to denied claims. For example, modifier -91 for repeat laboratory tests might be necessary but often overlooked.
Lack of Specificity. Not coding to the highest level of specificity can lead to claim rejections. For instance, many ICD codes require additional digits to reflect the diagnosis fully, and failing to provide these can lead to issues with claim processing.
Unbundling Codes. This error involves using multiple CPT codes for parts of a procedure that should be billed under a single comprehensive code. Unbundling can be viewed as fraudulent by insurers if done intentionally.
Upcoding or Downcoding. Upcoding refers to coding for a more complex or expensive service than was actually performed. Conversely, downcoding is the practice of coding for a less complex service to avoid audit scrutiny. Both practices can lead to significant compliance issues and penalties.
Duplicate Billing. Submitting multiple claims for the same service on different days, or by different providers, can happen in large setups where communication is inadequate. This can be flagged as fraudulent activity.
Using Outdated Codes. Medical coding updates occur annually, and not updating billing systems or staff training can lead to the use of retired codes. These will be automatically rejected.
Diagnostic labs have enough to manage as it stands, and increasing complexity of coding only adds to the burden. Fortunately, AI and other technologies are well-suited to handle coding issues. Contact us to learn more.
