Medical necessity is essential when it comes to procedure codes in medical billing. Every CPT code must be supported by a corresponding ICD-9 diagnosis code that supports medical necessity for the procedure that was performed.
One diagnosis may support several procedure codes. A patient who presents with ankle instability may require as many as three billable procedures to stabilize the joint, and all three of these procedures will be paid. All of this information is part of the medical record; you just need to play Sherlock Holmes to find the coding clues to identify any and all billable codes.
Revenue codes are four-digit codes that are used on UB-04 claim forms, the forms used by facilities to bill most commercial payers. Revenue codes are only used on UB-04 claim forms; they’re also used in addition to CPT codes. They let the payer know what kind of procedures the submitting provider is contracted or licensed to perform and bill.
For providers, such as a hospital with multiple locations, the revenue code identifies the department in which the procedure was performed.
Providers that submit revenue codes have the accepted revenue codes specified in each vendor contract. The specific revenue codes listed in the contracts are discussed on the AAPC website and are also discussed in the Medicare Internet Only Processing manual, which you can access on the CMS website.
Although facility claims are submitted on UB-04 claim forms, professional claims are submitted on HCFA/CMS-1500 claim forms, which represent the services performed by a physician or other professional healthcare provider.
What’s important to remember here is that, although revenue codes only show up on the UB-04 form, they are somewhat related to what can be found on the HCFA/CMS-1500, and both kinds of forms must be as accurate as possible.