It has been projected that over the next decade, physician payment methodologies will increasingly focus less on fee-for-service and more on the quality and value of care (often referred to as value-based purchasing). Payers may incorporate incentives and penalties into physician contracts based on cost savings (value) and quality measurement. These payment methodologies group patients with like characteristics or conditions (denominators in quality measure) and compare cost of episodes of care or a physician’s performance of recommended actions as associated with quality measures (numerators in quality measure). Diagnosis and procedure codes submitted on physician claims are part of the data used to determine which patients and services are included in measurements. Other data sources include payer review of medical records and data from electronic health records; patient registries; other providers, such as pharmacies; hospitals; and other physicians. This article illustrates how codes reported and assigned for services provided at...

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