An Introduction to Medical Care Coding

Richard Duszak, Jr., MD is nationally recognized for his work in imaging health policy, Duszak came to Emory after serving as founding CEO of the Neiman Health Policy Institute and president of a regional health system based radiology practice. A recent member of the CPT Editorial Panel, he has held numerous national professional society leadership positions and currently serves as Associate Editor for Health Services Research and Policy for the Journal of the American College of Radiology. Rich recently came to OTT for a lunch and learn and shared with us some of his experience with healthcare coding. Healthcare Insurance graphic

At a high level what are CPT and ICD codes and who oversees them?

  • CPT stands for Current Procedural Terminology and are the codes used by healthcare providers to describe the services provided. The code set is maintained by CPT Editorial Panel, which is appointed by the American Medical Association. CPT codes have three categories. Category I is the most broadly used and are most likely recognized by insurers in their coverage determinations. Category II are primarily for performance management. Category III are temporary codes for emerging and experimental items. These codes may become Category I codes at a later time should they meet rigorous literature and utilization criteria.
  • There are around 50,000-60,000 CPT codes, with around 1,500 new or changed code requests per year.
  • Category I CPT codes are divided into six groups: evaluation & management, anesthesiology, surgery, radiology, pathology & laboratory, and medicine.
  • ICD codes are the International Classification of Diseases which is a set of codes to describe diagnoses, symptoms and procedures in conjunction with hospital care. These codes are maintained by the World Health Organization, and are thus separate and distinct from CPT codes. These codes are also used to classify mortality data from death certificates.
  • CPT and ICD codes are used together to fully describe medical events.
  • Additionally, there one other sets of codes. The HCPCS codes which stands for Healthcare Common Procedure Coding System overseen by the Centers for Medicare and Medicaid Services (CMS). CPT codes are designated as Level I HCPCS codes. For services for which CPT codes may not exists, CMS creates its own (Level II) HCPCS codes.

At a high level how are CPT codes added or removed?

  • There is a CPT Editorial Panel comprised of 17 mostly physician members which meets three times a year. A coding change request form is submitted to the CPT Advisory Committee for review which provides clinical expertise and other comments to facilitate the Editorial Panel’s deliberations. If the Editorial panel approves the code change proposal, it is referred then for valuation and ultimate inclusion in the official code set released each year. If the Editorial Panel rejects the request, there is an available appeals process.

At a high level what are the minimum criteria necessary for a CPT code?

Category I

  • Has received Food and Drug Administration (FDA) approval.
  • Is a distinct service performed by medical practitioners.
  • Has a well-established clinical efficacy in the U.S. and is documented.
  • Is not a fragmentation of an existing code or can be reported by more than one existing code.
  • Is not a means to report extraordinary circumstances related to existing codes.

Category III

  • A protocol for studying procedures.
  • Support from relevant specialties.
  • Availability of U.S. peer reviewed literature.
  • Description of current U.S. trials.

When evaluating innovation, how do CPT codes and reimbursement factor in?

  • Understanding how both the company and physician would get paid can clarify the business model for commercializing the innovation.
  • If reimbursement is possible under an existing code, the path to market may be more straightforward.
  • Not every product requires its own code. In fact, the CPT Editorial Panel strives to make services vendor agnostic whenever possible.

What are some examples of potential innovations that wouldn’t require a CPT code?

  • Something that a provider (doctor) pays for rather than an insurer (e.g., an enhanced computer system).
  • An improved service rather than a new service (e.g., a stent made out of a different alloy).
  • An existing CPT code already covers it (most CPT codes are vendor agnostic).

The Ever-Confusing World of Contract Lingo – Part 2

While much of OTT’s work deals with the review, protection, and management of the inventions made by our faculty, there is a whole other side that is of equal importance: negotiating contracts with industry, be it for licenses, clinical trials, collaborations, sponsored work, or confidential discussions. Just as the world of patents has its own set of jargon and terms, contracts do too. Below we’ve compiled a helpful list of some common terms you may encounter in contracts. You can find part 1 of this blog here.

Common Contract Terms & Concepts Continued
Representation: A fact that one party states with the knowledge that the other party is relying on that fact to make an agreement. If one makes a false representation, it can allow the other party to have the contract be voided or seen as a fraud in the inducement, meaning that an intentionally untrue fact was construed in the contract. For example we often represent that we have the ability to enter into the contract, or that to the best of our knowledge we are owner of a certain technology.

Warranty: A promise of the reliability of a given product or service. If a warranty is incorrect, the other party can deem it as fraudulent and claim breach of warranty and contract claim.

Disclaimer of Warranty: A provision that denies warranties that would otherwise be applicable to a given product or service. For example, in license agreements, Emory will often disclaim any warranty of merchantability.

Material Breach: A breach of a term or terms of the contract by one party substantial enough that it relieves the other party of their obligations to perform under that contract and provides grounds for termination of the agreement.

Waiver: Failure to exercise a right under an agreement that results in the loss of that right. Agreements will often have a waiver provision that says failure to exercise a right under the contract won’t preclude that party from exercising that right or any other right under the agreement.

Injunctive Relief: Remedies provided by a court of law that are not compensatory or punitive, for an example an injunction which is when a judge orders a party to do or not do something.

Other Jargon
“Including but not limited to or without limitation”: A phrase which signals to the court that a party is not trying to create a limited list of options, but that the list is meant to be expansive, and the list is only providing some common examples.

“Indemnify and hold harmless”: The terms indemnify and hold harmless are synonyms, however they are often both stated in contracts. These terms mean that one will have to pay any damages owed to or provide legal support for the other party if they are sued by a 3rd party.

“Good Faith”: Meaning both parties in a contract agree not to lie, give complete honesty, and act with no deception in contract discussion and formation. This is considered to be breached when a party uses clever word games, denies facts that are clearly understood between the two negotiating parties, or use other means to avoid delivering on their obligations under the terms of a contract.

“Incorporated by reference herein”: When a document and its terms are made a part of a contract without having to physically attach that document to the contract. With clinical trial agreements, the protocol is a part of the agreement but are typically lengthy at approximately 60 pages long, so they are incorporated in the agreement simply by reference rather than by including all 60 pages into the contract.

The Ever-Confusing World of Contract Lingo – Part 1

While much of OTT’s work deals with the review, protection, and management of the inventions made by our faculty, there is a whole other side that is of equal importance: negotiating contracts with industry, be it for licenses, clinical trials, collaborations, sponsored work, or confidential discussions. Just as the world of patents has its own set of jargon and terms, contracts do too. Below we’ve compiled a helpful list of some common terms you may encounter in contracts.

What is a Contract?
At its most basic, a contract is a binding legal agreement voluntarily entered into by two or more parties. Those parties can be individuals, companies, organizations, or as is the case with most contracts OTT handles, the university and an industry partner. Contract law is governed by state law. Courts review contracts based on the law of the contractually specified state or the state in which the contract was formed.

Common Contract Terms & Concepts
Recitals: Preliminary statements at the beginning of a contract that presents the background and purpose for the contract. Recitals are not part of the actual contract and are merely considered statements that set the stage for the relationship contemplated in the contract and provide explanations to a reader as to why the contract exists.

Definition: Words can have multiple meanings, so in most contracts, important words and terms are specifically defined, either in their own section of the contract or noted to have the specific meaning in another fashion. Once defined, the word is generally capitalized throughout the remainder of the contract and interpreted to have the specific meaning. If a term is defined, these given definitions take precedent over given word’s typical definition.

Consideration: Money, articles, services, or promises to do or not do something that are outlined in a contract. Both parties must receive consideration in a contract (for example, one party receives money in exchange for the services of the other party). If the only consideration is unidirectional, it is actually considered a gift.

Severability: If a term in a contract is unlawful or ineffective then the entire contract may be voidable by the other party. To avoid a contract being voided in its entirety most contracts include a severability clause that states that if there is a provision in the contract that is defective then only that term will be void and the parties can negotiate to arrive at a replacement term.

Force Majeure: If something occurs outside a party’s control that cannot be rectified by exercise of due care by that party and it hinders the party’s ability to fulfill the contract, then the party is excused from its failure to perform. Examples of this are “acts of God” like natural disasters which cause one party to be unable to fulfill its obligations under a contract.

Survival: A clause in a contract that maintains that certain terms of a contract, for example confidentiality, survive or continue for a period of time after the contract is terminated. When a contract expires or is terminated, a court would consider only these specific terms to exist and be in effect.

Notice Provisions: Clauses stating how two parties in a contract communicate with one another in a written form, for example each party must notify each other in writing delivered by courier or email. Usually it will also include to whom notifications should be sent.

Stay tuned for part two of our contract jargon blog.

IP Jargon: What are they talking about? – Part 2

When beginning the process of protecting your invention, lots of industry specific terms and legal jargon get thrown around and can seem a bit daunting. To help ease you into the world of intellectual property protection, OTT has collected and defined some of the most common words and phrases that you’re likely to come across. In this two-part post, we’ll discuss jargon heard in patent statutes and applications and during the patent review process and a patent appeal (Part 1 can be found here). In this part we will cover jargon often heard during the patent review and appeal processes.

Patent Review Process Jargon

  • Amending the Claim/Amendment: After the patent has been filed, if it is discovered that an aspect of the invention already mentioned within the patent is not fully described or drawn, the patent may be amended to properly describe it.Patent Graphic

  • Office Action: After a patent application is submitted, the case is assigned an examiner, who evaluates the application for language and structure as well as prior art. If the application is rejected (which most are initially) the case’s examiner will provide this document explaining why.

    • Non-final Office Action: The Office Action sent after the patent application’s first rejection. The applicant may respond in a variety of ways, including amending the terms or requesting reconsideration.

    • Final Action: If the inventor’s response to the first Office Action was not considered sufficient, they may receive a Final Action. A case’s second rejection is usually deemed “final,” which means that the inventor’s options for response are restricted. Options for response include modifying the rejected claims, filing a Request for Continued Examination, requesting an interview with the examiner or filing an appeal.

    • Restriction Requirement: A given patent may only be awarded to one individual invention. If an examiner feels that the application includes more than one distinct invention, the applicant will have to choose one, and restrict the claims to those concerning that invention.

  • Rejections: is technically an office action where the patent examiner rejects claims based on patentability of the subject matter (section 101) or patentability in light of prior art (section 102 or 103). Although a rejection of claims (section 112) may sound like a rejection of the content found in a claim, this rejection is can be based on objections that the claims are not in their proper form.

    • Obviousness (section 103): An invention must not simply consist of a combination of prior art or an improvement on a previous invention. To be eligible for a patent, an invention must be completely unique.

    • Novelty (section 102): An invention may not have been previously patented, described in publication, or have been in use or on sale by anyone—including the inventor—for more than a year before the application was filed.
    • Patentable Subject Matter (section 101): An invention that is eligible for patent protection meeting the standards of novelty (section 102), utility (section 112), and non-obviousness (section 103). This includes “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”

Patent Appeal Jargon

  • Appeal: A request that a decision be reviewed by a higher authority. An appeal may be filed after an inventor receives a final office action, to be reviewed by the Patent Trials and Appeals Board.

  • RCE: (Request for Continued Examination): After the final office action, an inventor may file an RCE and make any amendments and arguments to be considered by the examiner.

IP Jargon: What are they talking about? – Part 1

When beginning the process of protecting your invention, lots of industry specific terms and legal jargon get thrown around and can seem a bit daunting. To help ease you into the world of intellectual property protection, OTT has collected and defined some of the most common words and phrases that you’re likely to come across. In this two-part post, we’ll discuss jargon heard in patent statutes and applications and during the patent review process and a patent appeal. In this part we will cover jargon found in patent statutes and applications.

Patent Statue Jargon

  • Statutory Subject Matter: Something that can be legally protected under a patent. There are four categories of ideas that can be protected by patents: process (a series of steps), machine (an object consisting of parts), manufacture (an object produced by giving new form to raw materials), and composition of matter (compositions of two or more substances.)

  • Bar date (aka Statutory Bar Dates): Dates that are triggered by statue in the patent application process. If any date is missed all potential rights are lost. These are similar to statute of limitations.Patent Graphic

  • Provisional Patent Application: Acts almost as a “placeholder” for a patent application, a provisional application will be granted a filing date, but the application will never be examined and will not become a patent. Although provisional applications become void after one year, an inventor may wish to file one once they have enough detail on the invention, to ensure that they are the first to file. Provisional applications may also allow more time for research or developing the idea before applying for a full patent.

  • Utility vs. Design Patents: There are hree types of patents available in the US: utility, design, and plant. Utility and Design patents, can both be obtained for the same invention. Utility patents protect what an invention does, whereas design patents protect how an invention looks. Although design patents last longer (14 years is typical), utility patents are generally stronger in that they protect the actual function of the invention. For example, if an inventor only holds a design patent, others can make inventions that have the same function as long as they appear differently. Lastly, are plant patents which provide 20 years of patent protection for the inventor of a new variety of plant, preventing others from reproducing and/or selling the plant.

  • PCT Patent Application: A patent application filed under the “Patent Cooperation Treaty.” This non-provisional “International” type patent application lasts for 18 months. It enables the applicant to a single application and retain both their filing date as well as the ability to choose which countries specifically to enter their application into at the end of the 18 months. This method is best for those considering applying for patents in many countries, and wishing to delay cost.

  • AIA (Leahy-Smith America Invents Act): Enacted in the US in 2013, the main change made by the AIA was the switch from “first to invent” to “first to file,” in regards to patents. When multiple inventors file for the same patent, the party that filed a patent first wins control, instead of the party who invented the idea first. You can find more information on the America Invents Act here.

Patent Application Jargon

  • Assignment: Describes both the act of transferring one’s rights to a patent or application to someone else and the legal document memorializing the transfer.

  • Claim: The exact part of an idea within a patent application in which an inventor outlines his or her invention. The claims usually take the shape of a list formatted in oddly worded sentences. This is what the patent will protect and what the inventor will have the rights to.

  • Declaration: A document in which the inventor declares that he/she was the inventor, and that he/she authorized the filing of the patent, acknowledging associated penalties.

  • Enablement: The application and the patent must provide language clear enough for an ordinary person in the field to be able to build or practice the invention from the description in the patent.

  • Embodiments: Different versions of the invention. The intended usage of the invention is known as the “preferred embodiment,” whereas other related versions are known as “alternative embodiments.” Preferred and alternative embodiments must be described in a patent application either through words, drawings, or both.

  • Prior Art: Any information (publication, presentations, etc.) regarding an invention that has been made public before patenting. To ensure originality for a patent, there must not be any prior art for the invention. Search Report: a report published by a patent office, explaining which documents may be used in determining the patentability of an invention. These documents usually contribute to prior art.

Untangling the Codes

In technology transfer, as in other fields, there are quite a few acronyms that are thrown around and may seem confusing at first. In this glossary, we break down the different types of agreements that’ll help you untangle those codes.

MTA

MTA stands for Material Transfer Agreement. Because research and technology development are often collaborative efforts, colleagues may share research tools. MTAs are formal contracts that define the proper use and limits of these shared tools, which could include reagents, cells, antibodies, computer software, etc. It’s important to execute an MTA before any research material is sent or received. The execution of an MTA ensures clear intellectual property ownership and supports necessary patent documentation.

IIA

IIA stands for Inter-institutional Agreement. IIAs come into play when multiple individuals at different institutions jointly invent a new technology. In the case of joint ownership, OTT will negotiate an IIA to define the rights and responsibilities of the institutions. These agreements encompass intellectual property protection, commercialization, cost and revenue sharing, as well other issues related to protecting and licensing the jointly-owned technology.

RA

RA stands for Research Agreement. Research agreements detail the obligations, commitments, and expectations of the parties involved over the course of a research project. RAs usually dictate and clarify specific goals of the research projects, in addition to how the involved parties will interact with each other.

CA, CDA, NDA, or RDA

CA stands for Confidentiality Agreement. CDA stands for Confidential Disclosure Agreement, sometimes referred to as an NDA (Non-Disclosure Agreement) or an RDA (Restricted Disclosure Agreement). Generally speaking these types of agreements outline what information is confidential, what and how information can be shared , and what information should be restricted from other parties. These agreements allow parties to discuss details of their business and inventions without the fear of making important information public.

MOU

MOU stands for Memorandum of Understanding. An MOU is an agreement between two or more parties that specifies mutually accepted expectations as the parties work together toward a common objective. MOUs are generally not legally binding; they’re often used in cases where parties either don’t imply a legal commitment or in situations where the parties can’t create a legally enforceable agreement.

RS

RS stands for Revenue (or Royalty) Sharing Agreement.  An RS is an agreement between the contributors to a technology, their department or school and the university, which outlines how revenue paid to the university from a license is shared among the groups.  It builds upon the basic revenue split outlined in university’s intellectual property policy (Emory’s can be found here).