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How Your Pediatrician is Paid: Coding Information for Parents

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By: Suzanne Berman, MD, FAAP & Angelo Peter Giardino, MD, PhD, FAAP 

Many families have benefit plans that help cover the cost of healthcare services for their children. These can be through an employer, a health insurance plan, or a government program (such as Medicare or Medicaid), for example.

Understanding how your plan processes and pays for different pediatric services can help you plan for what your family's out-of-pocket costs may be.

It starts with coding…

The process begins with your pediatrician reporting to the payer what services were provided and why.

  • Diagnostic codes are reported by your pediatrician to indicate why your child was seen or treated. The codes used to describe the reason for the visit are called the International Classification of Diseases (ICD). There are literally thousands of ICD codes in use for pediatric and adult medicine.

  • Procedural codes tell what services were provided. Each medical service has its own code. All are included in the Current Procedural Terminology (CPT), which is produced by the American Medical Association (AMA) for standardized use by insurance companies, government payers, and medical professionals when reporting services for payment. The procedural codes also help insurance companies keep track of the number of specific procedures done annually, for example.  

​Examples of commonly used CPT codes:

  • 99381 - Well baby checkup (new patient)

  • 12001 - Repairing a small laceration on the leg

  • 76856 - Complete ultrasound of pelvis

  • 99213 - Medium-level office visit

  • 36415 - Blood draw from vein

  • 90707 - MMR vaccine

Why coding can be tricky:

New codes are created, old codes are removed, and definitions of existing codes can change. For example, there at least a dozen different CPT codes for flu vaccines alone, depending on the patient's age, vaccine dose, and type of influenza vaccine.

To help keep everyone up to speed, the American Academy of Pediatrics (AAP) has an entire division devoted to pediatric coding. The AAP Committee on Coding and Nomenclature works with the AMA to ensure codes are adequately reflecting necessary pediatric services. In addition, the AAP educates pediatricians and pediatric specialists about proper coding and urges payers to update their systems to reflect current pediatric codes.

Lumping, splitting, bundling & unbundling:

Coding can be very confusing, because sometimes one CPT code is used to represent several services. Other times, multiple codes are required to represent just one service. Think of it in terms of how restaurants charge for meals. Some restaurants have a separate charge for each item ordered (a la carte). Other, buffet-style restaurants may charge a flat fee per person―regardless of how much you eat.

Some CPT codes represent an all-inclusive fee for a period.

  • A"buffet-style" code (a "global code") represents all work done for a set period. For example, CPT code 59409 represents the global service of prenatal care and vaginal delivery. The same code is used whether the mother attended all prenatal visits on time, was a high-risk pregnancy requiring extra visits, or received no prenatal care until the third trimester.

Most pediatric office visits follow the "a la carte" model.

  • In an "a la carte" model, each service is reported with a separate code. A well-child checkup for a nine-month-old baby who is new to the practice involves history taking, an examination, and appropriate counseling. This would be coded simply as 99381. However, if your pediatrician follows AAP recommendations for well-child visits, he or she might report several line items for that visit:

    • 99382 –Well-child checkup

    • 96110 – Brief developmental screening with scoring

    • 36416 – Fingerstick blood draw

    • 85018 – Hemoglobin blood count

Even giving a single vaccine involves 2-3 different CPT codes:

  • The serum code represents the cost of the vaccine itself, as well as the cost of ordering and storing the vaccine. Each vaccine has a separate serum code. For example, the serum code for the MMR vaccine is 90707.

  • The administration code(s) represent the work of vaccination: determining which vaccine(s) is/are due, counseling the patient, drawing it up in a syringe, administering the vaccine, completing the medical record the patient's vaccine record. Depending on whether the provider counseled on vaccines and the type of vaccine given, one or two administration codes might be used just for a single shot.

Many pediatricians provide certain types of care at no profit, and often at a loss. For example, the vaccines they administer may cost their practice more than it will be reimbursed. But they do it because they believe so strongly in the importance of immunizations to the individual child and to our nation's public health.

Why not "bundle" all the recommended services into a single code for simplicity?

The answer is complicated. While your pediatrician selects the code(s) used to report the visit, he or she does not set the definitions of each code, nor does he or she determine how your insurance processes each code. If pediatricians and payers disagree about the right codes to report a service, a patient can feel caught in the middle.

While most pediatricians try hard to code correctly and minimize out-of-pocket costs to families, it is impossible for pediatric practices to always know how each patient's insurance will process claims. For example, a busy pediatric practice might use over 100 codes and work with at least 50 different health plans―who all have different rules for payment. Some practices have policies around this to prevent misunderstandings; ask your pediatrician's office.

Processing the claim:

After the coding is completed by your pediatrician's office, a bill (claim) is sent to the payer(s). For families with health insurance, the claim would be sent to the insurance plan. The insurance plan will review the claim (called claims processing) and assess it based on your specific benefits' coverage.

  • If the claim is for a covered service: The plan will process for payment based on its agreement with your pediatrician.

  • If there are non-covered services included in the claim: The third-party payer will deny payment and the patient or family will be responsible for payment for the non-covered service(s).

You may receive an Explanation of Benefits (EOB) from your health plan that outlines what was or was not paid. If your plan has a deductible,  co-payment, or co-insurance, you will be responsible for paying the provider your share of the claim.

Remember:

Healthcare payment processing can be a complicated process, and one that can change year to year based on benefits. If you have questions, don't hesitate to talk with your pediatrician's office and benefits provider.


About Dr. Berman:

Suzanne BermanSuzanne Berman, MD, FAAP, is co-founder and managing partner of Plateau Pediatrics, the first NCQA-certified level 3 patient centered medical home in Tennessee. She serves the American Academy of Pediatrics (AAP) in a variety of roles―including the executive committee of the Section on Administration and Practice Management and the Committee on Child Health Financing. Dr. Berman frequently contributes to AAP projects and publications regarding medical home practice transformation, rural health, coding, data mining, and policymaking. She and her husband have three sons.

About Dr. Giardino:

Angelo P GiardinoAngelo P. Giardino, MD, PhD, MPH, is the Wilma T. Gibson Presidential Professor and Chair of the Department of Pediatrics at the University of Utah's School of Medicine and Chief Medical Officer at Intermountain Primary Children's Hospital in Salt Lake City, Utah. He holds subspecialty certifications in Pediatrics and Child Abuse Pediatrics from the American Board of Pediatrics. He is also a Certified Physician Executive (CPE) within the American Association for Physician Leadership. He completed the Patient Safety Certificate Program from the Quality Colloquium, is certified in medical quality (CMQ) as designated by the American Board of Medical Quality and is a Distinguished Fellow of the American College of Medical Quality. Within the American Academy of Pediatrics, Dr. Giardino is a member of the Committee on Child Health Financing, the Council on Child Abuse and Neglect, and the Council on Children with Disabilities.  


Last Updated
10/4/2018
Source
Committee on Child Health Financing (Copyright © 2018 American Academy of Pediatrics)
The information contained on this Web site should not be used as a substitute for the medical care and advice of your pediatrician. There may be variations in treatment that your pediatrician may recommend based on individual facts and circumstances.
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