Medical Coding and Miscoding Background

Medical Coding is the process of transforming healthcare diagnosis, procedures, medical services, and equipment into universal medical alphanumeric codes. Medical coding is a specific discipline and Medical Coders are a part of the medical team that work closely with providers, management, and payors. The primary function of a Medical Coder is to review the patient’s medical chart and extract billable information that they then translate into standardized medical codes. In doing so, the codes should accurately depict the patient’s encounter with their provider and must be specifically captured in order to receive reimbursement for rendered services.

Doctors review medical codes used for a procedure

In the United States, there are six HIPAA-mandated standardized code sets serving different needs. For example, the CPT® (Current Procedural Terminology) code set is used for codifying outpatient services/procedures and the HCPCS (Healthcare Common Procedure Coding System) is used to codify health care equipment and supplies and other services not covered by CPT code. 

Medical billers process and submit claims to health insurance companies (payors) for reimbursement of services rendered by a healthcare provider. Medical coders and billers often work together ensuring appropriate codes are used to generate claims for accurate reimbursement.

The act of incorrectly translating a patient’s medical records from the text documentation within the patient’s medical chart into codes is described as medical miscoding. If such miscoding occurs, whether intentional or not, it can lead to inaccurate billing, which in turn may cause patients to either overpay or underpay for services rendered by the providers, or providers to receive overpayment or underpayment from payors for the services provided to their patients.

Next, we describe some of ways in which miscoding errors may occur:

  • Use of an outdated code set that could be missing key code or procedure updates can result in coding inaccuracies.
  • Undercoding occurs when not all the performed procedures or tests are translated into codes, which causes fewer items to be billed. This is often due to oversight, but some practices intentionally undercode to avoid an audit.
  • Upcoding occurs when codes describing more procedures or tests are included in the submitted claims than were actually performed, which results in excessive billing. Additionally, upcoding  can also occur when codes get submitted for more serious (and, therefore expensive) diagnoses or conditions than what the patient was experiencing .
  • Unbundling occurs when procedures are unnecessarily itemized separately which increases the billing.
  • Incorrect use of Add-ons or Modifiers could cause over or undercoding if the code already includes the modifier. [1]
  • Simply selecting the incorrect code for the services rendered.

Consistent miscoding can provoke a federal agency or payor to conduct an audit of the provider and the practice. These audits can drain resources from the provider and its staff, ultimately impacting the time that providers have to care for their patients. In cases where providers mistakenly bill for services due to the lack of knowledge related to coding and billing guidelines, providers could be charged with abuse. In more serious cases, where providers purposefully bill for services in order to receive a higher reimbursement, such as with upcoding or unbundling, providers could be charged with fraud under the False Claims Act leading to medical board reviews, sanctions, civil money penalties or even criminal liabilities.

Below, we walk through sample cases concerning Spinal Procedures and provide their miscoding examples. In these cases, we focus on CPT codes as the universal code set. 

Cases of Miscoding in Spinal Procedures

Diagram of cervical discectomy and fusion procedure in spinal surgery

Anterior Cervical Discectomy and Fusion

Medical Description: Anterior cervical discectomy and fusion (ACDF) is a type of neck surgery that removes a herniated or degenerative disc in the neck to alleviate pressure on the nerves and/or spinal cord. When Anterior Cervical Fusions are performed, discectomies, ​​are usually performed as well, which is when the herniated disc’s damaged portion is removed. The ACDF procedure can include one or more intervertebral spaces.

What Was Documented: A provider documented that they performed an ACDF with a total of three interspaces.  

What Was Coded: A medical coder translated the above documentation into CPT codes 22551 and 22552 and included 99070 for supplies used during the procedure.

What Was Miscoded: The coding above is an example of Incorrect use of Add-ons or Modifiers as well as Undercoding. When coding the ACDF procedure, several CPT codes can be used:

  1. 22551 is used to note ACDF and includes the first interspace;
  2. 22552 is used to note the second interspace;
  3. 22552 (again) is used to note the third, additional, interspace. 

Code 22551 is the primary CPT code while 22552 is an Add-on used to describe any and all additional interspaces. The coder did not include codes for all three interspaces, and as a result undercoded for the procedures performed. 

Note: Charges for routine supplies, CPT code 99070, used in a surgical procedure are not eligible for separate reimbursement, regardless of the method used to bill for them. Payment is included in the reimbursement for the primary procedure code.

What Should Have Been Done: In this case, the coder should have assigned CPT codes 22551, 22552, and a second 22552 to describe a total of 3 interspaces included with this ACDF procedure.

Anterior Spinal Instrumentation

Example of instrumentation hardware used in a spinal fusion procedure

Medical Description: Spinal instrumentation is a procedure that attaches spinal implants or devices to the spine in order to correct spinal instability. These implants are placed at the front of the spine, i.e., the anterior part of the body. The spinal instrumentation is not performed on its own and is accompanied by a primary spinal procedure, such as ACDF. 

What Was Documented: A provider documented that they performed an ACDF with one interspace, along with a Spinal Instrumentation that spanned 5 vertebral segments. 

What Was Coded: A medical coder translated the above documentation into CPT codes 22551, 22552, 22552, and 22847.

What Was Miscoded: The coding above is an example of Incorrect use of Add-ons or Modifiers as well as Overcoding. The Spinal instrumentation procedure is not a primary procedure and must be added onto a primary procedure. In this case, the coder correctly listed 22551 for the ACDF performed, however, they also listed 22552 twice, when only one interspace was addressed. The codes for Spinal instrumentation include:

  1. 22845 is used when the procedure spans 2-3 vertebral segments.
  2. 22846 is used when the procedure spans 4-7 vertebral segments.
  3. 22847 is used when the procedure spans 8 or more vertebral segments.

Since the coder assigned 22847, they incorrectly indicated the Spinal Instrumentation spanned 8 or more vertebral segments, when in actuality it only spanned 5. 

What Should Have Been Done: In this case, the coder should have listed codes 22551 and 22846 to indicate an ACDF procedure involving one interspace was performed along with a Spinal Instrumentation that spanned 5 vertebral segments.

Bone Grafts and Spinal Procedures

Doctor holding a piece of bone that was obtained from an auto-graft procedure.

Medical Description: Spinal procedures often use bone grafts to provide a stable foundation for the body to grow new bones or fuse spinal sections together. Bone grafts that are harvested from a cadaver are known as Allografts but if they are harvested from a person’s own body then they are called Autografts. Depending on the size of the bone obtained, grafts can either be Morselized, which is when a cancellous bone or small bone fragments are used, or Structural, when a bigger piece of bone is used. Similar to other examples, bone grafts are not performed on their own but are typically accompanied by a primary spinal procedure, such as ACDF.

What Was Documented: A provider documented that they performed an ACDF with one interspace, along with a locally harvested Autograft. 

What Was Coded: A medical coder translated the above documentation into CPT codes 22551 and 20938.

What Was Miscoded: The coding above is an example of Incorrect use of Add-ons or Modifiers as well as selection of an incorrect code. The below CPT codes are utilized to describe different types of bone grafts:

  1. Code 20930 indicates Morselized Allograft.
  2. Code 20931 indicates Structural Allograft.
  3. Code 20936 indicates locally harvested Autograft.
  4. Code 20937 indicates Morselized Autograft.
  5. Code 20938 indicates Structural Autograft.

The selected code (20938) incorrectly describes that a Structural Autograft was performed, when in actuality a locally harvested Autograft was performed. 

What Should Have Been Done: In this case, the coder should have listed codes 22551 and 20936 to indicate an ACDF procedure involving one interspace was performed along with a locally harvested Autograft.

Closing

An accurate medical coding practice of correctly translating documented clinical services provided into universal code sets will ensure timely reimbursement from insurers as well as help prevent audits from government agencies or insurers. Medical Coding and Billing experts at Quandary Peak can provide an audit, analysis, and recommendations for improving medical coding practices.

Correction (April 16, 2024): An earlier version of this article had a typo in the medical codes regarding an ACDF procedure. We regret the mistake and thank our readers for their close inspection and notification of the error.