(Medicare Claims Processing Manual)

Examples include:   Z00.00 Encounter for general adult medical examination without abnormal findings   Z00.01 Encounter for general adult medical examination with abnormal findings   Z01.10 Encounter for examination of ears and hearing without abnormal findings   Z01.118 Encounter for examination of ears and hearing with other abnormal findings   For outpatient claims, providers report the full diagnosis codes for up to 24 other diagnoses that coexisted in addition to the diagnosis reported as the principal diagnosis.  For instance, if the patient is referred to a hospital for evaluation of hyperte nsion and the medical record also documents diabetes, diabetes is reported as another diagnosis.  Additional information and training is available on CMS Web site: http://www.cms.gov/Medicare/Coding/ICD10/index.html   10.4 - ICD Procedure Codes  (Rev. 3081, Issued: 09 -26-14, Effective: Upon Implementation of ICD -10, Implementation: Upon Implementation of ICD -10)  ICD procedure codes are required for inpatient hospital Part A claims only.  Healthcare Common Procedure Code System (HCPCS) codes are used for reporting procedures on other claim types.  Inpatient hospital claims require reporting the principal procedure if a significant procedure occurred during the hospitalization.  For information of the selection of the principal procedure, see the Official ICD -10-PCS coding guidelines posted with the annual updates to ICD -10-PCS posted at http://www.cms.gov/Medicare/Coding/ICD10/index.html    The principal procedure code and other procedure codes shown on the bill must  be the full ICD-9-CM, Volume 3, or ICD -10-PCS procedure code, including all applicable digits, up to seven digits.  Up to twenty four significant procedures other than the principal procedure may be reported.   10.5 - Coding for Outpatient Services and Physician Offices  (Rev. 3081, Issued: 09 -26-14, Effective: Upon Implementation of ICD -10, Implementation: Upon Implementation of ICD -10)  The Official ICD -10-CM Coding Guidelines include a section for Outpatient Services (hospital -based and physician office).  These guidelines can be found in the annual updates to ICD -10-CM posted at http://www.cms.gov/Medicare/Coding/ICD10/index.html    A/B MACs (A), (B), (HHH), and DME MACs , physicians, hospitals, and other health care providers must comply with the Official ICD -10-CM Coding Guidelines.  10.6 - Relationship of Diagnosis Codes and Date of Service  (Rev. 3081, Issued: 09 -26-14, Effective: Upon Implementation of ICD -10, Implementation: Upon Implementation of ICD -10)  Diagnosis codes must be reported based on the date of service (including, when applicable, the date of discharge) on the claim and not the date the claim is prepared or received.  A/B MACs (A), (B), (HHH), and DME MACs  are required to edit claims on this basis, including providing for annual updates each October.   Shared systems must maintain date parameters for diagnosis editing.  Use of actual effective and end dates is required when new diagnosis codes are issued or current codes become obsolete with the annual updates.   The Health Insurance Portability and Accountability Act (HIPAA) requires that medical code sets must be date -of-service compliant.  Since ICD diagnosis codes are a medical code set, effective for dates of service on and after October 1, 2004, CMS does not provide any grace period for providers to use in billing discontinued diagnosis codes on Medicare claims.  The updated codes are published in the Federal Register each year as part of the Proposed Changes to the Hospital Inpatient Prospective Payment Syste ms in table 6 and effective each October 1.   All MACs  will return claims containing a discontinued diagnosis code as unprocessable.  For dates of service beginning October 1, 2004, physicians, practitioners, and suppliers must use the current and valid diagnosis code that is then in effect for the date of se rvice.  After the updated codes are published in the Federal Register, CMS places the new, revised and discontinued codes on the ICD -9 or ICD -10 Web site as applicable.  http://www.cms.gov/Medicare/Coding/ICD9ProviderDiagnosticCodes/codes.html   or http://www.cms.gov/Medicare/Coding/ICD10/index.html .  The CMS sends the updated codes to All MACs  on an annual basis via a recurring update notification instruction.  This is normally released to MACs  each June, and contains the new, revised, and discontinued diagnosis codes which are effective for dates of service on and after October 1st.  20 - Description of Healthcare Common Procedure Coding System (HCPCS)  (Rev. 10320, Issued: 08- 28-2020, Effective: 12 -01-2020, Implementation: 12- 01-2020)    The HCPCS has been adopted as the code set for use in Health Insurance Portability and Accountability Act (HIPAA) transactions, for reporting outpatient procedures, items, and services.   The HCPCS originated from the American Medical Associations (AMA) Physicians Current Procedural Terminology, Fourth Edition (CPT -4).  It includes two levels of codes and modifiers.  Level I contains only the AMAs CPT -4 codes.  This level consists of a ll numeric codes.  Level II contains alpha -numeric codes primarily for items and nonphysician services not included in CPT -4, e.g., ambulance, DME, orthotics, and prosthetics.  These are alpha -numeric codes maintained by CMS.  The CMS monitors the system to ensure uniformity.  20.1 - Use and Maintenance of CPT -4 in HCPCS  (Rev. 10320, Issued: 08- 28-2020, Effective: 12 -01-2020, Implementation: 12- 01-2020)    There are over 7,000 service codes, plus titles and modifiers, in the CPT -4 section of HCPCS, which is copyrighted by the AMA.  The AMA and CMS have entered into an agreement that permits the use of HCPCS codes and describes the manner in which they may be used.  See 20.7 below.   The AMA permits CMS, its agents, and other entities participating in programs administered by CMS to use CPT -4 codes/modifiers and terminology as part of HCPCS;    CMS shall adopt and use CPT -4 in connection with HCPCS for the purpose of reporting services under Medicare and Medicaid;    CMS agrees to include a statement in HCPCS that participants are authorized to use the copies of CPT -4 material in HCPCS only for purposes directly related to participating in CMS programs, and that permission for any other use must be obtained from the AM A;   HCPCS shall be prepared in format(s) approved in writing by the AMA, which include(s) appropriate notice(s) to indicate that CPT -4 is copyrighted material of the AMA;    Both the AMA and CMS will encourage health insurance organizations to adopt CPT-4 for the reporting of physicians services in order to achieve the widest possible acceptance of the system and the uniformity of services reporting;    The AMA recognizes that CMS and other users of CPT -4 may not provide payment under their programs for certain procedures identified in CPT -4.  Accordingly, CMS and other health insurance organizations may independently establish policies and procedures gov erning the manner in which the codes are used within their operations; and    The AMAs CPT -4 Editorial Panel has the sole responsibility to revise, update, or modify CPT -4 codes.  The AMA updates and republishes CPT -4 annually and provides CMS with the updated data.  The CMS updates the alpha -numeric (Level II) portion of HCPCS and incorporates the updated AMA material to create the HCPCS code file.  The CMS provides the file to A/B MACs (A), (B), (HHH), and DME MACs and Medicaid State agencies. The file is also available via the CMS website.   It is the MACs responsibility to develop payment screens and limits within Federal guidelines and to implement CMS issuances.  The coding system is one of the tools used to achieve national consistency in claims processing.  MACs may edit and abridge CPT -4 terminology within their claims processing area.  However, MACs are not allowed to publish, edit, or abridge versions of CPT -4 for distribution outside of the claims processing structure.  This would violate copyright laws.  MACs may furnish providers/suppliers AMA and CMS Internet addresses, and may issue newsletters with codes and approved narrative descriptions that instruct physicians, suppliers and providers on the use of certain codes/modifiers when reporting services on claims forms, e.g., need for documentation of services, handling of unusual circum stances.  The CMS acknowledges that CPT is a trademark of the AMA, and the newsletter must show the following statement in close proximity to listed codes and descriptors:   "CPT Copyright 2017 American Medical Association. All rights reserved.  CPT is a registered trademark of the American Medical Association."   (Please note that the use or reprinting of CPT content in any product or publication requires a license. For more information about the licenses available, see CPT License Information.)   Applicable FARS/DFARS Restrictions Apply to Government Use   Fee schedules, relative value units, conversion factors and/or related components are not assigned by the AMA, are not part of CPT, and the AMA is not recommending their use. The AMA does not directly or indirectly practice medicine or dispense medical ser vices. The AMA assumes no liability for data contained or not contained herein.   If only a small portion of the terminology is used, MACs do not need to show the copyright legend.  MACs may also print the code and approved narrative description in development requests relating to individual cases.   The CMS provides MACs a quarterly update file of HCPCS codes and instructions to retrieve the update via CMS mainframe telecommunication system.   20.2  RESERVED   20.3 - Use and Acceptance of HCPCS Codes and Modifiers  (Rev. 10320, Issued: 08- 28-2020, Effective: 12 -01-2020, Implementation: 12 -01-2020)   The HCPCS is updated quarterly to reflect changes in the practice of medicine and provision of health care.  The CMS provides a file containing the updated HCPCS codes to A/B MACs (A), (B), (HHH), and DME MACs and Medicaid State agencies 60 to 90 days in advance of the implementation of each update.  Distribution consists of an electronic file of the updated HCPCS codes, file characteristics, record layout, and a listing of added, revised and deleted codes.  MACs are required to update their HCPCS codes fil e and map all new, revised, and deleted codes to appropriate payment information.   An updated list of the HCPCS codes for Durable Medical Equipment Medicare Administrative Contractors (DME MAC) and A/B MAC (B) jurisdictions is updated quarterly to reflect codes that have been added or discontinued (deleted) during each year.  A recurring  update notification will be published to notify the DME MACs and A/B MACs (B) that the list has been updated and is available on the CMS Web site.  https://www.cms.gov/Medicare/Coding/HCPCSReleaseCodeSets/Alpha -Numeric -HCPCS.html .   Both the DME MACs and the A/B MACs (B) publish this list to educate providers on which MAC they should bill for codes provided on this list.   Physicians and suppliers must use HCPCS codes on the Form CMS -1500 or its electronic equivalent and providers must use HCPCS codes on the Form CMS -1450 or its electronic equivalent for most outpatient services.  The procedure, item, or service can be further described by using 2- position modifiers contained in HCPCS.   Modifiers to HCPCS Level I codes for medicine, anesthesia, surgery, radiology, and pathology are on the HCPCS codes file from CMS.  Modifiers for Level II alpha -numeric codes are with the Level II codes published by CMS.  Alpha -numeric and CPT -4 modifiers may be used with either alpha -numeric or CPT -4 codes.  A/B MACs (A, B and HHH) and DME MACs are required to accept up to four 2 -position numeric or alpha modifiers and process both modifiers completely through the claims processing system (including any manual portion) as far as payment history.  It is not acceptable merely to be able to accept multiple modifiers and then drop one before complete systems processing.  Dropping of a modifier leads to incomplete and inaccurate pricing profiles.