Profee Coding: Major Differences from Facility Coding to Know

In the complex world of healthcare, profee coding stands as a cornerstone. It’s a specialized area of medical coding that focuses on identifying and documenting the services provided by healthcare professionals. The importance of profee coding cannot be overstated – it’s the key to accurate billing and ensuring healthcare providers are compensated correctly for their services.

What is Profee Coding?

Profee coding, short for professional fee coding, is a specific type of medical coding that focuses on the services provided by individual healthcare professionals. It involves the translation of healthcare services into alphanumeric codes, which are used for billing and documentation purposes.

In a typical healthcare setting, when a patient receives care, the healthcare professional will document and report the services provided. The physician services profee coder then translates these documented services into the appropriate codes. These codes are used to bill the patient’s insurance company, ensuring that the healthcare provider is compensated for their services.

The role of profee coding in the medical field is pivotal. It ensures accurate representation of the healthcare services provided, which is crucial for correct billing and reimbursement. Moreover, these codes also contribute to the organization of the patient’s medical record, providing a clear and concise summary of the care they received.

In essence, profee coding serves as a bridge between healthcare providers and insurance companies. It translates the language of healthcare into a universally understood system of codes, facilitating communication and ensuring compliance for the smooth operation of the healthcare system, helping to avoid RAC audits.

What is Facility Coding?

While profee coding focuses on the services provided by individual healthcare professionals, facility coding takes a broader perspective. It encompasses the coding of services related to the facility side the use of the healthcare facility itself. This includes the use of equipment, supplies, and the overhead costs associated with running a healthcare facility.

In a healthcare setting, when a patient receives care, not only do the healthcare professionals provide services, but the facility itself also provides services. These can include everything from the use of operating rooms and medical equipment to the support, nursing care and hospital stays. Facility coding is the process of translating these services into alphanumeric codes for billing and documentation compliance purposes.

The role of facility coding in the medical field is equally as important as profee coding guidelines. It ensures that healthcare facilities are accurately compensated for the services they provide. Without accurate facility coding guidelines, healthcare facilities may not receive the correct reimbursement, which can impact their ability to provide quality care.

In summary, facility coding is a critical component of the healthcare billing process. It ensures that the services provided by healthcare facilities are accurately represented and reimbursed.

Profee Coding vs Facility Coding

Now that we’ve explored both professional fee coding and facility coding individually, let’s dive into their differences and similarities. For our purposes below in regards to facility coding, we will focus on outpatient facility coding.

Facility coding is the process of coding the services related to the use of a healthcare facility. It covers everything from the use of hospital rooms and medical equipment to the nursing care provided during a patient’s stay. On the other hand, profee coding focuses on the services provided by individual healthcare professionals during a patient’s care.

The primary difference between profee coding and facility coding lies in their focus areas. Profee coding is centered on the healthcare professional’s services, while facility coding is concerned with the services provided by the healthcare facility itself. This difference is crucial because it affects how services are billed and reimbursed.

• Pro Fee billing is driven by the provider’s medical decision-making or the total time spent with the patient during the encounter. It is based on individual procedure codes and the accuracy of these codes will affect the reimbursement value.
• Facility Billing, on the other hand, is driven by the resource intensity involved in the care of the patient for the encounter. It does not necessarily require a specific CPT/HCPCS for every revenue code.

While profee coding services and facility coding have distinct roles, they also share some similarities. Both types of coding are essential for accurate billing and reimbursement in the healthcare industry. They both involve the translation of healthcare services into a universally understood system of codes, facilitating communication between healthcare providers and insurance companies.

Moreover, both professional health systems’ fee coding and facility coding contribute to the patient’s medical record, providing a comprehensive summary of the care they received. This information is crucial for continuity of care, as it allows healthcare providers to understand a patient’s medical history and review the care they have received.

Reimbursement Methodology: APC vs RVU/wRVU

Reimbursement in healthcare can be complex, but it’s primarily based on two methodologies: Ambulatory Payment Classification (APC) and Relative Value Unit (RVU).

APC – Facility or Ambulatory Surgery Center

The APC methodology is used by healthcare facilities or ambulatory surgery centers.

• The major procedure code drives the APC.
• Code-for-code CPT accuracy does not necessarily affect the APC (reimbursement). For example, a procedure code may be missed and will not affect the APC.

RVU – Professional Fee Services

On the other hand, the RVU methodology is used for Professional Fee Services.

• Payment for professional fee services is determined by the RVU value assigned to each CPT code.
• The Total RVU is comprised of three components:
  • Practice Expense RVU (clinical staff time, supplies, and equipment)
  • Work RVU (including time and intensity associated with a service)
  • Malpractice RVU (Physician liability insurance)
• Code-for-code CPT accuracy will affect RVU value (reimbursement). For example, a missed procedure code will affect the overall billed RVUs.

E/M- Evaluation and Management

Evaluation and Management (E/M) services are a critical component of healthcare provision. They differ between facilities and professional fee services.

• Facility: Most facilities drive E/M levels off of resource intensity involved in the care of the patient for the encounter.
• Pro Fee: Driven by the providers’ medical decision-making or the total time spent with the patient during the encounter.

Billing the Claim: CMS 1500 vs UB-04

When it comes to billing the claim, there are two main forms used: the CMS 1500 Form and the UB-04 Form.

Professional Coding with CMS 1500 Form:

ProFee coding, also known as physician coding and billing, is used for billing the professional services provided by physicians and other healthcare providers. This includes consultations, examinations, surgeries, and other medical procedures. The focus is on the work done by the individual healthcare provider.

In Professional fee coding, diagnosis pointers are used to tie specific ICD-10CM codes to specific lines on the claim, supporting the medical necessity of each line item of service reported. Each service or supply provided requires a specific Healthcare Common Procedure Coding System (HCPCS) code, and this is required only in an office setting. ProFee coding allows for multiple dates of service on one claim and also allows for date spans. The place of service is required to be indicated on the claim.

ProFee coding uses the CMS-1500 form for billing. This form is used to bill Medicare Fee-For-Service (FFS) Contractors for services provided by physicians and other providers. The CMS-1500 form allows for the reporting of up to 12 diagnoses (ICD-10CM codes) per claim.

Facility Coding with UB-04:

Facility coding, on the other hand, is used for coding and billing the services provided by hospitals and other healthcare facilities. This includes the use of equipment, supplies, the hospital room, nursing care, and any other facility resources used in the care of the patient. The focus is on the resources used rather than the work done by individual healthcare providers.

In Facility coding, procedures, and supplies may not appear on every line. A revenue code which indicates the area where resources were consumed, is required. However, a specific HCPCS for every revenue code is not necessarily needed. Facility coding uses a single claim line for a particular date of service for the facility, and the place of service is not required to be indicated on the claim.

Facility coding uses the UB-04 form. This form is used to bill insurances and Medicare for services provided by hospitals inpatient setting. The UB-04 form allows for the reporting of up to 24 diagnoses for a single visit.

CPT Codes with Professional vs Technical Components

CPT codes can have both professional and technical components. The professional component, represented by Modifier 26, covers the mental and physical work directly performed by the provider. The technical component, represented by Modifier TC, covers the equipment, supplies, and clinical staff.

Fee Schedules and Reimbursement

There are also differences between Professional Coding and Facility coding when it comes to fee schedules and claim reimbursement rules.

• Profee: The Physician Fee Schedule (PFS) allows separate payment for each CPT/HCPCS code reported on a claim, as long as medical necessity and other payor-specific guidelines have been met for the reported service.
• Facility: The Outpatient Prospective Payment System (OPPS) groups together reported services into ambulatory payment classifications (APCs) based on clinical and cost similarities. A single payment is made based on the APC.

EOB – Explanation of Benefits

The Explanation of Benefits (EOB) differs between Profee and Facility.

• Profee: Each line submitted on a profee claim gets either a payment or denial.
• Facility: Some lines receive neither a rejection nor payment as they are packaged into other services. These are considered billable but do not get a separate line-item payment. The reimbursement for these services is included in the payment for the other services into which they are packaged. The status indicators guide the bundling of the services.

The Impact of Professional Fee Coding and Facility Coding on Healthcare

The importance of accurate profee coding and facility coding in the business of healthcare cannot be overstated. These coding practices play a pivotal role in the financial health of healthcare providers and the overall functioning of the healthcare system.

Accurate coding ensures that healthcare providers are correctly compensated for their services. It translates the complex language of healthcare into a universally understood system of codes, facilitating communication between healthcare providers and insurance companies. This not only ensures correct billing, claims, and reimbursement but also contributes to the patient’s medical record, providing a comprehensive summary of the care they received.

On the other hand, incorrect coding can have severe consequences. It can lead to billing errors, resulting in either underpayment or overpayment for services. This can impact the financial health of healthcare providers and can also lead to legal issues. Moreover, incorrect coding can also impact patient care. If the codes do not accurately represent the services provided, it can lead to confusion and miscommunication, potentially impacting the quality of care.

In summary, profee coding and facility coding have a significant impact on the healthcare industry. They ensure that healthcare services are accurately represented, facilitating correct billing and reimbursement. Moreover, they contribute to the patient’s medical record, ensuring continuity of care. As such, healthcare providers must ensure accurate coding practices.

Before you go…

Understanding the differences between profee coding and facility coding is a vital component of healthcare claims. Even medical coders that have spent years in the coding field have difficulty understanding the nuances between each.

Therefore check out our articles on the CMS 1500 Form and UB-04 Forms to know more about the intricacies of each form.

Profee Coding Frequently Asked Questions