There are no specific laws on medical billing and coding in the U.S. But there are laws that impact both of these areas, which makes both billing and coding one of the most regulated industries in the country.
Fraud and Abuse
The toughest law on the books concerns fraud and abuse, and wasn't initially geared towards health care. It's the False Claims Act of 1863, which was instituted to protect the government from being sold fraudulent goods during the Civil War. The act has had more than 50 amendments since it was enacted.
In 1998, the Office of the Inspector General, which is part of the U.S. Department of Health and Human Services, released Billing Code 4150--04--M in the Federal Register. This set up a process of compliance that hospitals were encouraged to enact to protect themselves against charges of abuse. It also changed the statute to making hospitals liable for triple damages if claims against them were supported, while other entities are only liable for double damages.
Rules for Billing and Coding
The major parts of this statute, which directly impact medical billing and coding, are:
• Billing for items or services not actually rendered
• Providing medically unnecessary services
• Upcoding (coding the diagnosis at a higher level than what a patient actually suffered from)
• Outpatient services rendered in connection with inpatient stays (certain services are considered as inpatient only, and can't also be billed for outpatient charges)
• Duplicate billing
• Unbundling (billing separate charges that have been deemed to be related as part of one service)
• Billing for discharge in lieu of transfer (this means if a hospital transfers a patient to another facility, it's not considered a discharge, which would be paid at a higher rate)
• Credit balances - failure to refund
Privacy and Electronic Claims Submission
In 1997, the Health Insurance Portability and Accountability Act was enacted. It set up rules for national identification standards, administrative simplification, and insurance coverage protection.
The areas pertaining to medical billing and coding are privacy standards and the electronic claims submission standards. The first impacted what kind of information could appear on a medical bill, as billing companies now had to make sure certain types of information wouldn't show up on a bill, because verification couldn't be made as to who would be opening a medical bill. The second encouraged hospitals to develop and introduce electronic claims submissions.
Changes to Medical Billing and Coding
Some of the major changes include:
• Full written diagnoses could not be on any claims
• Charges that indicate diseases related to sexual issues, including HIV, had to have the names modified
• Anyone calling for information on either had to prove they are the patient or patient's legal representative
• New electronic codes were created so billing information would be in a standard place for all electronic claims submissions
Correct Coding Initiative
In 1996, the Health Care Finance Administration (HFCA, now known as the Centers for Medicare and Medicaid Services) established the National Correct Coding Initiative. Its intentions were twofold. The first was to create national codes for physicians to that, when they relocated, they wouldn't constantly have to reapply for new provider numbers in their new area. The second was to promote correct coding initiatives for all medical providers that led to incorrect payments and accusations of fraud. Though these standards are mainly for federal and state programs, they have been used by other insurance carriers as well.
Tags: billing coding, electronic claims, medical billing, medical billing coding, Billing Coding, claims submissions