Orthopedic coding is incredibly complex compared to most medical specialties.

Spine coding has perhaps the most difficult coding logistics with the possible exception of vascular.

Coding can make a tremendous difference in either how much money you’re making…or how much money you’re losing.

And specifically, this doesn’t even account for additional complexity of multiple specialties effectively – ortho, PT, DME, radiology.


What constitutes “correct coding” and what constitutes an “error”?

Is it simply CCI edits?

A few billing systems and clearinghouses can CCI errors and Apache Health’s artificial intelligence can do this as well.

Clearly, you need to follow Medicare rules for Medicare claims, although that still doesn’t tell you whether you have coded everything that was included in the operative report or chart note.

More importantly, it doesn’t tell you whether everything was captured in the chart.

Back to the question of what is correct orthopedic coding.

Maybe correct coding isn’t the right word because it evokes CCI edits.

Can you do NLP orthopedic procedure coding?

Last time we checked was some time ago, but the short answer was that it was not reliable for something as complex as spinal coding.

This is something Apache is going to investigate and collect some data in the near future.


So that leaves orthopedic coding for the most part.

But who is considered an expert?

At my old medical billing company, we used to have separate trained and heavily experienced orthopedic coders code the same set of charts, and sometimes we would get extremely different answers.

Having each write up their justification for the coding often helped resolve conflicts, but it didn’t always work that way.

If you have 3 coders and 2 code one way and the 3rd another, do you go with the majority?

I would suggest that this process would often leave you at significant risk.

What defines “wrong” or what makes someone “correct”?

Is it whether the claim was paid?

One might argue that this is correct since…well it drives bottom lines.

What about whether the claim survives an audit?

That definitely constitutes a huge win.

This seems like a better litmus test, although one can hardly wait for an audit to know you have a problem.

Most importantly, a claim can be denied…and still be correct.

Most people’s experience of having lost at some point to the IRS, even though they were right, proves this.

There are some recognized coding experts, but they are very expensive to hire and utilize.

Even then, this still doesn’t guarantee complete risk mitigation in an audit, or that you will maximize your deserved reimbursement.


While there is widespread acceptance that you must follow Medicare rules if you bill for Medicare patients, a more nuanced question is whether you have to follow commercial payer policies when doing orthopedic billing.

If you are contracted, the common convention is that you must follow the payer policies.But is this actually best practice? What is the basis for this?

If the provider contract with the payer requires adherence to their policies, then contractually you are obligated to follow them.

Interestingly, some contracts (even from major national payers) don’t require you follow their policies, which means you may not have to follow them. And if you are out of network there is some disagreement on whether your orthopedic coding must follow payer policies.

The insurance companies have tried to maintain that there is a “de facto contract” when out of network, but the courts have ruled against them, which means if you do not have a contract, do you need to follow the payer guidelines?

We have even encountered situations where an orthopedic surgeon did not agree with the AMA on their CPTs and chose to do her own thing.

So, must your practice follow the AMA or can you deviate?

These questions are not just philosophical, but critical to determining what “correct” is for the coding by identifying which sets of rules will apply.

Ultimately, some of this may come down to risk tolerance for the practice.


What can you do to determine how well done your orthopedic coding is?

  • Manual auditing
  • Data analysis / AI auditing

It doesn’t matter whether you (the doctor) do the coding, whether you have professional coders onsite, or it is an outside orthopedic billing company doing the coding, you should audit.


You might appropriately be a little reluctant to just believe a billing company who offers to do an “analysis” or an audit.

They may either be generous or potentially even non-compliant in their own coding suggestions, especially prior to engagement in an effort to win your business.

They may also cherry pick certain clinical cases to make your practice’s coding look worse than it actually is.

There are ways to mitigate these concerns.You can prevent some of the potential case selection bias by choosing the basket of cases for auditing yourself.

If your practice does spine, make sure to include at least 10 spine coding cases since this is an area of frequent and major error.

Have the billing company explain and justify their coding for each case.

If the orthopedic billing company does coding, make sure their contract indemnifies you from their coding, which then mitigates against both long term compliance risk, but also reduces the risk that their audit would be padded with up-coding or aggressive noncompliant coding.

Because, if they code too aggressively in the audit it will become obvious soon after the engagement that they padded or they will get punished if/when the payer audit comes.

Your practice can also engage an orthopedic coding consultant.

It is expensive for a good orthopedic consultant, but this is a great option.

They typically don’t have a conflict of interest, although you may want to choose an auditing firm that does not also offer coding services, since this provides the same conflict of interest that a billing company has.


We might suggest it is a consensus of experts.

Since it is hard to evaluate whether a single company truly knows everything, which in of itself is a little ridiculous, your practice might consider having several companies or experts look at your coding and get the consensus.

One might even take a few best practices of each of the various coding consultants or billing companies.

Whoever is doing your orthopedic or spine coding on a long-term basis, you need to ensure that they stay up to date, which means having someone audit them periodically or again check with several firms.


Data is everywhere, and it can tell us a great many things.

We can now know for certain that there is a problem in your revenue cycle management when we find a systematic pattern in the data that links to not getting paid.

Some of these could be known, for example if they are codified into payer rules and someone was able to upload and maintain those hundreds of thousands or millions of rules.

However, aside from the difficulty of finding, translating, loading, and maintaining these rules, many payers may not even follow their own rules.

Some payers are increasingly more nefarious and may not publish rules or may make them retroactive.

We have even seen some seemingly intentionally make “mistakes” in order to underpay or not pay at all.

We learned anecdotal evidence from employees who were former claims processors at insurance companies that they were given specific quotas for the number of claims they had to either lose, deny, or make “mistakes” on.

We know payers are playing games on this front because we have statistical evidence to support it.

Have you ever noticed that insurance companies often find their errors when they overpaid you and come back looking for the money at some point?

They are known as clawbacks or recoupments.

Have you ever experienced a payer coming back to you to let you know they underpaid you?

I’m guessing not.

Students of data will know that errors happen in predictable patterns, like a normal distribution.

If insurers were truly making mistakes, they would underpay you as often as they overpay you.

But we know that doesn’t happen, which confirms that there is some intent behind it.


Data analysis can find anything as long as there is enough data to indentify the pattern.

For example, if we see that you never get paid for set of CPT codes without a certain modifier, we can deduce correctly that there was a coding error and it resulted in a quantified loss of revenue.

It may be that this corresponds to a written payer policy, but it may not. And it effectively doesn’t matter.

The data is more important than the rule. You might be getting paid for something without following the payer rule, for example forgetting a modifier.

In that case, it is worth changing to be compliant, but it is also not revenue impacting.

We can even now identify payer rules that have not been published since they can’t hide their own behavior.

Artificial Intelligence can now often detect missing CPTs for when a procedure was performed but not coded.

I don’t mean natural language processing where the chart is read and the system identifies something documented but not coded.

This is where the chart is not even accessed; the AI can simply know from the charge data whether it is likely a code was missed.

Imagine a doctor that performs certain procedures under separately billable fluoroscopy and somehow either forgot to note this or the coder forgot to code for it.

This would be apparent in the data and Apache Health could flag this for review.

AI could even see that this is only the case when the doc performs them at certain locations.

It would be possible for human to find these in theory, although in practice there is way too much data and procedures to pore over in order to find everything.

And machines are better at identifying certain patterns than humans.


All practices want to maximize their reimbursement and ensure compliance through improved coding.

In order to achieve this, your practice should audit coding at least periodically if not continuously.

A few key conclusions that you may pursue in order to achieve this:

  • External consulting firms are expensive, but effective.
  • It’s wise to consult multiple auditing services, and don’t take the audit of a billing company at face value. Investigate further.
  • Good options exist to have potentially multiple billing companies audit your coding, as long as it is managed effectively
  • External auditing not only improves compliance, but also identifies opportunities to increase revenue from missed coding
  • It is now possible to have a data-driven / AI approach to coding auditing to increase revenue and improve compliance


Apache Health is an RCM analytics, benchmarking, and auditing company.The founders of Apache formerly ran a large medical billing company that focused on spine and orthopedic billing.Apache’s predictive analytics will benchmark billing performance and project exactly how much more revenue you should earn.Using many factors and a blend of artificial intelligence and specialty specific benchmarks, the model projects whether changing the orthopedic billing process would improve collections for your particular mix of procedures and payers, and adds in our own coding tools that improve compliance and increase revenue.

Legal disclaimer: Apache Health is engaged in the business of healthcare revenue cycle management analytics.  We offer information about regulations, rules, and industry practices relating to compliance.  Apache has researched that subject and has set forth the results of that research herein.  Apache Health is not a law firm and we do not offer legal advice.  Apache does not guarantee the completeness nor the accuracy of its research.  You should consult with your qualified healthcare attorney.


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