Code Breaker

Well, it’s tax season again. You know: the time of year that makes sticking needles in your eyes seem like a real blast by comparison. Of course there are some folks who love tax season — crazy people better known as Certified Public Accountants (CPA’s).

Truth be told, I am not a total killjoy during tax season, and I admit to being fascinated by some of the numbers and codes. For example, the Social Security Number (SSN), which we all report on our tax forms, is a very interesting number (no, really: it is — hang in there with me on this). Created in 1936 for the sole purpose of tracking the earnings histories of U.S. workers for the determination of Social Security benefits, it now serves a much broader purpose, and may be the most commonly used numbering system in the U.S. But how many of us ever stop and consider what information our SSN encodes about us, and the many ways it is useful?

As shown in the following example, every Social Security Number contains three sets of numbers; each set categorizes and conveys specific information about the person designated.

social security card

  • The first set (the Area Number) is three digits long and based on the ZIP code from which a person applies. 001, the lowest Area Number, designates the state of New Hampshire.
  • The next set is the two-digit Group Number, representing a region within an Area Number. Interestingly, it was originally crafted to verify the accuracy of punch cards (note to readers born since disco was hot: these are not the punch cards that get you a free cup of coffee after 10 punches).
  • The last four digits of the SSN form the serial number, one element in a straight numerical series of numbers from 0001-9999 within each group.

The simplicity and efficiency of using a unique identification number that most people already possess and that has been attached to many since birth have encouraged its widespread use, well beyond original intent. For example, SSN’s are required for military service and to claim a dependent on income tax returns. They are required for applications to all federal-student, home, disaster-loan programs. Credit card companies, healthcare providers’ offices, insurance companies, and the car-rental shop all require that number. As a result, our SSN’s create a virtual trail of information about our lives that can be used for all sorts of planning and research by government agencies and businesses alike.

As with the SSN, there are numerous coding systems in healthcare, many of which were established to serve one purpose, but are now used for lots of different reasons. For example, Current Procedural Terminology (CPT®) is a uniform medical nomenclature that describes medical, surgical, and diagnostic services. Originally developed as a system to standardize terminology among physicians, CPT codes are now used to study patterns and variation in the rates of services and procedures delivered to patients, to reimburse for care, and to study the quality and efficacy of care and new services (among other things).

Resource Based Relative Value System (RBRVS) codes were originally established to determine health care reimbursements based on the relative value of the resource cost to deliver a medical service, but are now also widely used to measure and report physician productivity. And National Drug Codes (NDC), created to facilitate the electronic exchange of information at the package level, are now also used by the FDA for drug recalls and monitoring adverse drug events, among other goals. Because researchers often excel at understanding what information these systems encode, they also tend to excel at finding the important stories in the data. For example, numerous studies have used these systems to uncover phenomena such as “up-coding” of procedures (coding them as more complicated than can be medically substantiated), and to shed light on large, unexplainable variations in rates of procedures throughout the U.S. (check out The Dartmouth Atlas of Health Care).

And while you may not be a researcher, or work for a federal agency monitoring things like adverse drug events, understanding what information is being defined and encoded in these systems will only serve to enrich data analysis you perform across the healthcare spectrum.

  • If you work in finance, for example, you can tell whether the ICD diagnosis codes on your documentation support the procedures (CPT codes) being billed, and if you are using the modifiers correctly. Are you billing too much or not enough? It is best to know this before the CFO and the payers ask about it.
  • If you present quality data: have you fully accounted for and analyzed the different types of procedures included in your data (e.g., open versus laparoscopic surgical procedures)? If not, beware: you may come out of a meeting bruised and battered by clinicians.

Understanding the information encoded in healthcare classification systems will absolutely improve the quality of your reporting and analysis. And if you’re looking for something to give you a break from doing your taxes, it’s a far less painful option that sticking needles in your eyes.

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