When it comes to the professional services provided by healthcare professionals, there is a dire need to document and report those services in a way that they are universally understood and utilized by others associated with the healthcare industry. The data provided by the healthcare providers is then used to gather statistical information, identify services for payments and track healthcare utilization.
According to an independent study, over 5 billion healthcare claims are processed each year in the US by insurance companies. To process such a large number of claims with consistency and accuracy so that they can be handled properly by Medicaid, Medicare, and other health insurance programs, a standard coding system for medical procedures and services is crucial.
The Current Procedural Terminology (CPT) code system was developed for the purpose of providing a standard language and coding methodology so as to correctly communicate across the many stakeholders. When it comes to reporting medical procedures and services for processing claims, CPT codes provide the most widely accepted medical nomenclature that is further employed for evaluating healthcare as well as the development of medical guidelines.
What is CPT?
CPT refers to a set of medical codes which are used by healthcare providers, physicians, hospitals, laboratories, and outpatient facilities, to describe the services and procedures that they perform. In particular, CPT codes are applied to report to private and federal insurance vendors to reimburse the amount rendered in healthcare services and procedures.
CPT codes were created by the American Medical Association in 1966, with the sole purpose to standardize the reporting of all the procedures and services performed by surgical, medical, and diagnostic centers. Since each CPT code refers to a written description of a service or procedure, that completely eliminates any subjective interpretation of the case in question.
Given the evolving nature of the healthcare world, the AMA takes responsibility for updating the CPT code set every year, adding new codes, and removing obsolete ones. Additionally, the AMA updates CPT nomenclature, or medical language, to reflect advances in medicine. Although the AMA owns the copyright to CPT®, it invites providers and organizations to participate in the ongoing maintenance of the code set, welcoming those who use it to suggest changes to codes and code descriptors.
How do CPT codes work?
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A CPT code consists of 5-digits, each code referring to a unique medical procedure or service which is applied by the entire U.S medical system.
Insurance vendors such as Medicare and Medicaid make agreements with healthcare professionals and providers on the prices for the various services provided, where each price refers to a unique CPT code. The codes are further broken down into subsections to provide additional information regarding the procedure.
Types of CPT Codes
Due to the massive number of medical procedures and services, the CPT codes are organized and classified into three types, which are:
. CPT Category I
. CPT Category II
. CPT Category III
CPT Category I
These consist of the largest set of codes used commonly by providers for the reporting of procedures and services. Most of the CPT codes belong to this category and are most widely used and approved by the FDA when required.
Category 1 CT codes are denoted by five numeric characters, arranged in numeric order, with two exceptions. Number one, the order may be changed when there are re-sequenced codes involved. The AMA clusters together similar codes to make it easier and more convenient for medical coders to accurately select specific codes.
The second discrepancy may occur when evaluation and management codes are involved. As you see in the Category I code outline below, although E/M codes start with the number 9, they are printed first in CPT codebooks. The AMA chose this order because E/M services are the most frequently reported healthcare services. This arrangement, as with re-sequenced codes, is designed for coding efficiency.
CPT Category II
Category II CPT codes are additional codes for the tracking of performance management that can be assigned to Category I codes. In contrast to Category I, Category II codes are not used in the reimbursement process.
Category II codes consist of four numbers and the letter F and are normally used to track particular information about the patients. The codes help deliver better healthcare and achieve positive outcomes for the patients.
CPT Category III
Category III codes are temporary codes for the reporting of new and emerging procedures and services, following Category II codes in the coding manual. They are depicted with four numbers and the letter T.
Since these are temporary, codes can remain in Category III for a maximum of five years. Once the proposed procedures and services meet the criteria set in Category I, meaning that when the procedures have proven to be effective, they are reassigned as Category I codes.
The AMA releases new or revised Category III codes semi-annually via their website but publishes the Category III deletions annually with the full set of temporary codes.
Familiarizing with CPT codes
Coders who want to get acquainted with CPT codes have to go through several things, such as rules, conventions, notes, and guidelines before they can become proficient.
To start with, procedural coding dictates a strong grasp of medical terminology and anatomy. Since a single procedure can have numerous variations, with only small differences, selecting the right code requires you to have a deep understanding of the procedure, how it was performed, and which code will capture its true essence.
Not only that, the knowledge of the medical practices and terminology must be comprehensive since healthcare professionals can perform a procedure that calls for CPT codes from anywhere in the manual.
CPT codes vs. ICD codes
The main difference between CPT codes and ICD code sets is that where CPT codes are related to medical procedures and services, ICD codes are related to diagnosis. ICD codes describe the different diseases, injuries, or illnesses that patients can have.
ICD-10 codes are also important for reimbursement purposes, necessary for insurance companies to explain why a treatment is provided against the CPT code. Learn more about ICD-10 codes in our guide.
Another code set used frequently by billing insurance companies is HCPCS, which is maintained by the Centers for Medicare and Medicaid Services. There are two levels of codes in HCPCS: Level I codes are based on the CPT code set provided by physicians, used for procedures and services. Level II codes cover those procedures and services which are not provided by healthcare providers.
Being an informed patient is essential to ensure that you get the best medical care. If you see something in your medical record or bill that you do not understand, do not hesitate to discuss it with your healthcare provider or insurance vendor, since that is your right to keep track of the healthcare that you receive.