When doing Medical Billing for Patients who are visiting the hospital, there are different levels of codes that you must select depending upon the diagnosis.

Choosing codes to report hospital visits by a physician can be a challenge for even the most experienced medical billing coders.

In a hospital environment, there are Level One, Level Two, and Level Three codes:

1) Level-one codes (the patient is getting healthier):

This level of code is used to report the physician encounter that involves review of the patient’s condition, both by examination and by the progress the hospital staff notes in the patient’s chart. Typically, these visits are brief, and the level of decision-making is moderate, which means that, if the patient is recovering as anticipated, proceeding to the next step of treatment or recovery is okay.

2) Level-two codes (the patient isn’t getting healthier):

With level-two codes, the patient isn’t recovering as anticipated, and something else needs to be done. In this case, the physician discusses options with the patient and possibly issues revised orders for the staff; he or she may also order additional testing at this stage.

3) Level-three codes (the patient’s health is declining):

This level of code is for the patients who have not responded to treatment or, worse, have continued to decline. Level-three visits require more of the physician’s time and involve a higher level of decision-making, accompanied by a greater degree of risk for patient mortality.

Over-coding these visits can create a risk of payer audits, so it is important to have a clear understanding of the different levels of hospital codes..

It is also important to know that each level of coding comes with its own qualifying criteria. When a patient is initially admitted, you use specific codes to reflect that level of service. Then you use inpatient visit codes for services rendered during the patient’s hospitalization.

The level of medical decision-making is determined by the number of diagnoses, the options for managing the illnesses, the amount of tests or data that the physician must review, and the level of risk to the patient for complications or death.