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  • Medicare (established in 1965) provides health care benefits to Social Security beneficiaries (ie, previously employed individuals over age 65).

  • Medicare hospital payments are payments based on the patient’s admitting diagnosis in diagnosis-related groups that may be affected by documented comorbidities and quality metrics.

  • Medicare physician payments: For each Current Procedural Terminology (CPT) code, a previously determined assessment is made of the amount of physician work (~50%), practice expense (~40%), and malpractice costs (~10%) associated with that service or procedure. The amount of work is assessed in comparison to the work already assigned to other similar procedures.

  • The Relative Value Scale Update Committee (RUC) is a committee of the American Medical Association that assesses physician work for procedures and services and provides recommended relative value unit (RVU) valuations to the Centers for Medicare and Medicaid Services (CMS). Although the RUC provides recommendations, CMS makes all final decisions about what the Medicare payments will be.

  • Conversion factor = Dollars paid/RVU.

  • Billing Concept 1: Identify why physician does something for a patient by using codes for diagnoses from the International Classification of Diseases, 10th edition, Clinical Modification.

  • Billing Concept 2: Identify what the physician does for the patient by using codes for services or procedures from CPT (updated annually).

  • The provision of critical care services is specifically excluded from a global surgical package in the setting of trauma and burns.


Although most physicians know that payment for their services must usually be coded and billed for monetary reimbursement to occur, their traditional medical education and training have not explained how this actually is accomplished. And, although it is true that most physician practice groups have employed personnel trained in medical professional coding and billing, those personnel are completely dependent on the quality of physician documentation in the medical record. The rules for coding personnel usually dictate the specific requirements that must be in the medical record to enable them to code appropriately for any given service. Therefore, physicians who are knowledgeable regarding documentation requirements will make it easier for their coders to apply the correct codes and then see better reimbursement. The purpose of this chapter is to provide the information and guidance for trauma and acute care surgeons to optimize their professional reimbursement due to a better understanding of the documentation, coding, and billing rules.


Prior to the 20th century, physicians in the United States were paid for their services directly by the patient. Because of new developments and discoveries, the ability to provide life-saving remedies became increasingly available but was accompanied by increasing costs. The concept of using an insurance model (designed to pay for catastrophic events that were unlikely to occur) first evolved in the private sector in the late 1920s.1 Initially limited to few people, private health care insurance received a significant boost during World War II, ...

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