Health Information Management

Auditing for coding mistakes on outpatient orthopedic cases

JustCoding News: Outpatient, March 10, 2010

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by Jillian Harrington, MHA, CPC, CPC-P, CPC-I, CCS-P

Auditors often focus on evaluation and management (E/M) services and don’t spend quite as much time reviewing surgical services. Certified coders often code surgical services, whereas physicians often assign codes for E/M services. However, auditors may shine their spotlight on surgical services from time to time. If coded incorrectly, resulting payment errors could be much larger than those for E/M services, and have a more significant effect on an organization’s revenue.

In a typical orthopedic practice, there are many types of surgical services performed and coded. However, some present a bit more of a challenge than others do. Let’s take a closer look at three different coding areas:

  • Knee arthroscopies
  • Fracture care
  • Place-of-service coding

Knee arthroscopy

One of the most common orthopedic procedures physicians perform is knee arthroscopy. The benefits of an arthroscopic procedure versus an open procedure are obvious: There is a shorter recovery time, less pain for the patient, and a physician can perform the procedure on an outpatient basis. However, coding for these procedures can be tricky, especially for Medicare patients.

The anatomy of the knee lends to the confusion in coding. The knee has three compartments:

  • Medial
  • Lateral
  • Patello-femoral

When performing arthroscopic procedures of the knee, knowing the compartment(s) in which the physician performed the procedure is crucial to coding and auditing.

When a physician performs multiple procedures within a single compartment of the knee, you should report only the most complex procedure within that compartment. When auditors review the operative report and find that the physician performed all of the procedures within a single compartment yet multiple procedure codes are listed, in most cases this indicates an error in the initial coding of the service.

When a physician performs multiple procedures in different compartments of the same knee, you may report the most complex procedure in each compartment, and you must apply appropriate modifiers.

For example, when a patient has a meniscectomy in the medial compartment (code 29881) and a synovectomy in the lateral compartment (code 29875), you should report each of these procedures separately.

Use CPT codes 29866–29889, as well as HCPCS Level II code G0289 (Arthroscopy, knee, surgical, for removal of loose body, foreign body, debridement/shaving of articular cartilage [chondroplasty] at the time of other surgical knee arthroscopy in a different compartment of the same knee) to report knee arthroscopies.

Also note that Medicare does not allow the reporting of CPT codes 29874 (Arthroscopy, knee, surgical; for removal of loose body or foreign body) and 29877 (Arthroscopy, knee, surgical; debridement/shaving of articular cartilage) with other arthroscopic procedures performed on the same knee, even when the physician performs these services in different compartments.

When a physician performs the removal of a loose body or foreign body (code 29874), or debridement/shaving of articular cartilage (chondroplasty) (code 29877) at the same time as another surgical knee arthroscopy but in a different compartment of the same knee, you should report code G0289 instead of codes 29874 and 29877.

Report code G0289 only one time per additional compartment, even when the physician performs both loose or foreign body removal and debridement. Code G0289 only applies to the Medicare program or other payers that have directed you to follow that particular guideline. You should report this code only when the physician spends a fair amount of additional time (i.e., 15 or more minutes) performing this service.

Fracture care

Coding for initial fracture care and follow-up services also commonly rises to the top of the list as a problematic area of orthopedic coding. Fracture care coding in itself is not terribly complex. However, there is sometimes confusion about the type of fracture care versus the type of fracture.

ICD-9-CM diagnosis coding for fractures is based on the type of fracture—open versus closed. However, there is no direct correlation between the type of fracture and the type of fracture care, which physicians identify using the same verbiage—open versus closed. For example, when a patient has a closed fracture of the shaft of the tibia (code 823.20), that patient may require an open treatment of the fracture (code 27758). A novice coder may confuse the type of fracture with the type of treatment. Distinguishing between the two is critical when coding for fracture care.

Coders can also miss coding for fixation devices when physicians place those devices during open treatments. Be sure that your final surgical code(s) includes all of the treatment(s) the physician performed during that session.

Another area of potential concern with regard to fracture care is casting and strapping. In general, the fracture care code includes the casting of a fracture, as provided during the initial fracture care service. That initial fracture care service code also includes the removal of that initial cast at a later date, so coders should not report this service separately. However, if additional re-casting is required during later patient encounters (i.e., not during the initial fracture care encounter), the physician may charge for the re-casting service.

As an auditor, it is very important to be wary of casting and strapping codes applied on the same date as a fracture treatment service. If the code is for casting of the area that the physician treated during that fracture treatment, that initial cast is included in the fracture treatment code.

Place-of-service coding

Although place-of-service coding isn’t specific to orthopedics, it is a problem across many areas.

Providers often do not focus on place-of-service coding during the billing process and treat it more as an afterthought, which is a mistake.

The place of service code, found in box 24b on the CMS-1500 form, indicates to the payer where exactly the service(s) took place. For example, consider the following place-of-service codes:

  • 11: Physician office
  • 22: Outpatient hospital setting (including hospital-based clinics)
  • 24: Ambulatory surgery centers (ASC)

In many cases, especially for those services submitted to the Medicare Program or other third party payers that use an Resource-Based Relative Value Scale-based fee schedule, the payment for services provided in a hospital or ambulatory surgical center will vary from the payment for services provided in the physician office setting, based solely on the accuracy of this two-digit code. If you apply place-of-service code 11 (physician office) in error to a claim for services performed in the outpatient hospital or ASC setting, you’ll receive additional payment that you are not entitled to in that setting.

When auditing, it’s important to verify that the appropriate place-of-service code is listed in that box of the CMS-1500 (or the equivalent field in the 837-P electronic transaction). This is such an area of potential audit concern that the Office of Inspector General has listed it on its 2010 Work Plan. Get a jump on their audit and evaluation activities by performing your own place-of-service audit of your practice now.

Auditing can be a time-consuming activity, but it is a crucial part of any practice’s compliance program. If perchance you are found to have a false claims issue in the future, having an active compliance program can help to mitigate damages at that time.

Editor’s note: Jillian Harrington, MHA, CPC, CPC-P, CPC-I, CCS-P, is an adjunct instructor for the Certified Coder Boot Camp® (covers physician and outpatient hospital coding) and the Medicare Boot Camp for Hospitals, both live and online versions for HCPro, Inc. Harrington is also the president and CEO of ComplyCode, a healthcare compliance consulting firm based in Binghamton, NY. E-mail her at

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