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Medical Billing and Coding, ICD-10-CM, ICD-10-PCS, CPT, HCPCS, etc.
Viewing:  Oct 21, 2016

ABC Code Set


ABC codes were originally developed to process claims addressing conventional, complimentary, and alternative health care services not routinely included in traditional medical billing codes (ABC Coding Systems). These codes provide a more detailed description of health care services to assure appropriate reimbursement (Giannini, 2005). ABC codes fill in the missing gaps found in the older medical coding systems making the new billing system more reliable and cost effective. Not only are these codes used to improve billing systems but they are also used in practice management, medical record keeping, insurance claims, benefits, and administrative activities.

The mission of this specific vocabulary is empowering greater access to quality care at less cost. The vision of this vocabulary is improving the health and welfare of our nation and our world. The ABC coding system incorporates their mission and vision into practice by getting the right care to the right people, in the right time and place, at a rationale cost (ABC Coding Systems).

Organizational Structure

Each ABC code consists of a string of five alphabetic characters used to identify thousands of different services. These five characters are organized in a hierarchical structure which groups similar products, remedies, and supplies together in a fluid manner. Practitioner modifiers, legal practice guidelines, and relative value units, are additional terminologies paired with the original five character code to make it complete.

The five character code is followed by a two character code that identifies the type of practitioner who provided the service reflected in the code. The ABC code plus the practitioner modifier can be linked to state specific legal practice guidelines assuring compliance within state statutes, regulations, and law. The ability to link the code with legal practice guidelines that tend to vary from state to state decreases malpractice and fraudulent billing charges. Relative value units (RVUs) are used to establish the financial worth of a specific intervention. RVUs are multiplied by regional conversion factors to obtain a dollar amount for services.

Intended Uses and Settings

The ABC code is recognized by the American Nurses Association (ANA) and is already integrated with other coding systems including the Current Procedural Terminology (CPT) and the Healthcare Common Procedure Coding System (HCPCSII). It is designed to fit into existing standard claim forms and software applications making it readily available and accessible for health care professionals. Acupuncturists, naturopaths, massage therapists, reflexologists, social workers, advanced practice nurses, and registered nurses are just a few of the health care professionals utilizing the ABC coding system (Bolen, 2007).

It is important for nursing as a profession to be included in the interoperable electronic medical record that is going to be the future of health care. The ABC coding system contains approximately 800 nursing procedures gathered from the Nursing Interventions Classifications (NIC). With the ABC coding system, these interventions can be documented and interfaced with an electronic health record justifying nursing care and the profession.

Potential Benefits for Clinical Practice

There are many benefits to using the ABC vocabulary in clinical practice. First, this vocabulary allows advanced practice nurses as well as multiple other health care professionals to easily and reliably bill for their services. Second, the code is standardized. It consists of five to seven letters which relate respectively to the procedure, provider, and intervention provided. This system helps eliminate unnecessary confusion. Third, the code is computerized and linked to state specific legal practice guidelines. It only permits practitioners to bill for services they are cleared to provide. This offers a safeguard against diagnosing, treating, or providing any other action that is not within the practitioner's scope of practice. Fourth, the codes can be used for a variety of reasons making them invaluable as far as generating data and reports for individual practitioners, management staff, and insurance companies. Fifth, bills and claims can be made online. This creates increased operational efficiencies for providers, i.e. reduction of time spent on claims adjudication and facilitation of a prompter response for payment of services. Finally, according to the ABC website, the biggest benefit of using this coding system is that they improved healthcare operations and healthcare industry just as universal product codes (UPC bar codes) have improved the retail industry. These codes allow business providers to carry out essential business practices like claims processing, forecasting, insurance billing, practice managment, and third party reimbursement in an automated manner.

Historical Development

ABC codes were developed by Alternative Link Incorporated in 1996. They were used as a classification system which allows relay of procedural codes from practitioners based on individual state scope of practice to bill for procedures and interventions to payers and claims processors. The code's big break came in 2003 when the Secretary of the U.S. Department of Health and Human Services, Tommy Thompson, approved a two year program of commercial use and evaluation of codes which allowed for independent billing from practitioners utilizing the ABC codes. Previously, the only codes used for billing were CPT codes developed by physicians for the American Medical Association (AMA). The CPT codes were disease-oriented codes for services ordered or performed by physicians. This prevented alternative providers from using them and billing for their individual services. CPT codes alone left other health care providers such as nurses, alternative practitioners, and complimentary medicine practitioners unable to bill and track their services, essentially leaving them invisible to any reimbursement system. ABC codes changed this dilemma with their initial development of 4,200 fee linked codes based on a wellness-model instead of a disease-based model from the CPT codes. There is no overlap between systems, rather a complementary augmentation of what the CPT codes offer.

ABC codes were allowed to be used in electronic transactions until October 2006. In September of 2006 the Health and Human Services (HHS) denied further use of ABC codes because they failed to name them a permanent national standard, making them ineligible to be used in electronic transactions because of Health Insurance Portability and Accountability Act (HIPAA). They had been given a variance from HIPAA in 2003 for electronic transaction. Currently, ABC Codes can only be used for paper claims submissions. With the move to electronic claims, the fear is that they will become obsolete because it is cumbersome and slow to bill through postal mail versus electronic billing. There are 3 million licensed practitioners who are affected by this change and lack other codes to bill for their services as equal business partners with conventional physicians in health care reimbursement. It appears that the time for change is now, that a double standard exists with HHS approval for CPT codes, but not for ABC codes. Licensed health care providers are in the process of contacting their congressional members to change this inequity.

Extent of Use Today

ABC codes represent the practices and services of millions of health care providers and an estimated 1.4 billion episodes of outpatient care (Molina, 2004). In one example, Molina outlines the positive implications for clinical nurse specialists by stating that ABC codes represent the work of over 67,000 clinical nurse specialists who previously did not receive support from traditioal medical code sets. It is difficult to determine the exact extent to which this vocabulary is used today because the code sets are not a mandatory standard. No evidence is found that indicates that these codes are used in other countries or that the codes are written in any other language other than English.

The codes are used in numerous settings. Clinical practice management, multiple specialties including physical modalities, movement modalities, rehabilitation and training modalities, physical test and measurement modalities, allergy services, and nutrition services are just a few examples. Various practice specialties utilize the codes including Oriental medicine, somatic and massage practices, chiropractic services, mental health services, reproductive and childbirth services, naturopathic services, osteopathic services, indigenous healing services, and spiritual care services. Laboratory and specific office procedures, specific radiology procedures, physical resources, herbs and natural substances, remedies, and nursing are also included in the ABC code structure.

Usefulness of the Vocabulary Demonstrated Through Literature

ABC codes have been described as a missing and essential building block of health information technology today (Dean, 2006). The ABC Coding Solutions company estimates that ABC Codes will save more than $51 billion per year in U.S. healthcare costs alone (ABC Coding Solutions).

After extensively reviewing the available literature to determine the status of the ABC codes following the two-year trial, it was learned that the HHS refused to make ABC codes a permanent HIPPA standard. Dean (2006) explains that the AMA has traditionally taken the lead in deciding which health care services are covered and which caregivers will be reimbursed because the AMA developed the CPT code system and owns it. Downing (2003) states that complementary and alternative therapies are not usually included in the traditional billing codes making it extremely difficult for them to bill for services. Molina (2004) found strong support for the adoption of these new standards from various professional organizations and practitioners, including the American Nurses Association, Healing Touch International, Alaska Medicaid, and the New Mexico Medicare Plus Choice and Aetna. However, effective October 16, 2006, the US Department of Health and Human Services planned to no longer support the use of ABC codes for use in non-medical treatments following a two-year trial period and one-year extension. This decision made it extremely difficult to find current literature supporting the usefulness of this vocabulary.

Although there is not a lot of research based literature supporting the ABC Coding System, it is apparent throughout this paper how useful this coding system is for conventional, complimentary, and alternative medical providers. The system has reinvented the wheel of tracking and billing for services not traditionally included in medical billing systems. The ABC Coding Solutions website provides many links to information regarding the usefullness of the ABC Codes. They list the benefits to payers, networks, business owners and practitioners, claims processing organizations, health plan benefit designers, U.S. Government and Medicaid-Medicare agencies, and healthcare consumers and hospitals.

Critique of the Strengths and Weaknesses

ABC codes have both strengths and weaknesses. The strengths of this vocabulary can be found above in more detail under the description and benefits sections of this paper.

Although many benefits exist, several weaknesses are also found in regard to these benefits. According to the ABC code modifiers and practitioner identifiers, the ABC code appears to represent a myriad of health practitioners. However, groups of health care practitioners such as physical therapists, pharmacists, occupational therapists, doctors of dental surgery, and dieticians cannot utilize the ABC billing codes because codes are not available and have not been assigned to their disciplines at this time. For example, according to Club Industry Fitness Business Pro article, physical therapists in Indiana have not been able to utilize ABC codes even though physical therapy is fully credentialed due to the unavailability of ABC Codes for this discipline (ABC Coding Solutions). ABC codes have been formulated for personal trainers and many fitness organizations have expressed interests in the new codes. However, according to the legislative research director for ABC Coding Solutions, the coding system does not track how many facilities utilize the codes.

The ABC codes are currently facing political battles. HHS has denied further use of the ABC codes electronically by failing to identify them as a permanent national standard. HIPAA has also excluded ABC codes. The government currently denies the utilization of ABC codes in electronic transactions and continues to depend on the AMA to create coding for majority of other licensed caregivers.

Future Implications for Practice, Education, and Research

ABC code modifiers were developed to support research by allowing consumers of these codes to compile data electronically. Data that can be collected through modifiers includes practitioner type, economic costs, interventions, procedures, outcomes, and state scope of practice laws that match practitioners to education, certification, and training requirements on a per-intervention and per-state basis. This rich source of data for researchers will not exist electronically unless ABC codes are reapproved by the HHS.

Due to ABC codes not being named as a permanent standard, the probability of insurers and payers to incorporate massage therapy into planned benefits or pay appropriate fees is low, even when massage therapy is ordered. ABC Solutions has developed nearly 100 codes for massage therapists whereas CPT has only 15 codes for therapeutic massage procedures. The CPT does not have the detail needed to differentiate many types of therapeutic procedures which is why ABC codes are so important. ABC codes are critical to assure reimbursement reflects the skill and training a professional displays.

Practitioners need billing codes that describe actual procedures performed. The approved electronic billing codes are not ideal and do not describe enough the work completed by conventional, complimentary, and alternative health care providers. It is imperative that practitioners unite and fight the political battle that exists in the health care system so ABC codes can be used electronically again.

Cited From UMWiki

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