Accurate coding and billing are essential to a health care facility and to a physician’s financial survival. Coding is a complex task that ties to charges and revenue generation. Failure to capture all charges associated with a patient encounter can result in significant revenue loss. Medical necessity also plays a vital role in the contract with the facility or physician in terms of receiving payment from the third party payer (e.g., an insurance company).

Part 1

For this Discussion Board, you will define medical necessity, and you will describe the criteria to determine it.

Part 2

Once the patient has an established diagnosis and the services and procedures have been ordered, you will code out this information and place it on the claim for payment.

It is important for health care professionals to understand this process to receive accurate reimbursement.

For this part of the discussion, you will be identifying the coding systems that are utilized to support the diagnosis, services, and procedures.

List and discuss the coding system that is utilized to code out the patient’s conditions or diagnosis. Provide an example of a diagnosis with the appropriate code as an example, and respond to the following questions:

• What is the coding system replacing the diagnostic system?
• Will it be implemented this year? Explain your answer.

Next, identify what coding system is utilized to capture the services and procedures that the patient has received (both levels). List an example of a service or procedure with the appropriate code as an example, and respond to the following questions:

• Why is it important to assign the correct codes to the diagnoses, services, and procedures that a patient has received?
• What are the repercussions of submitting incorrect coding and billing errors to the third party payers?