Whenever a medical bill is submitted to an insurance vendor for reimbursement, it needs to specifically describe the medical procedure or the particular service that is being billed. In the United States, the majority of medical procedures are communicated through the current procedural terminology, or CPT, owned and maintained by the American Medical Association.
The objective of CPT as put forth by the AMA is to ‘provide a uniform language that accurately describes medical, surgical and diagnostic services and thereby provides an effective means for reliable nationwide communication among physicians, patients, and third parties. Under the CPT, a code is assigned to every type of laboratory and physician.
What Are Procedure Codes Used For?
When billing through Medicare, every healthcare provider has to use codes for the medical diagnoses, services, medication, and equipment provided. These procedure codes are used in the identification of what was done or given to the patients.
The identification and understanding of procedure codes are crucial in medical billing and processing claims. Every year, the codes are revised, where new ones are added, obsolete ones are discontinued and old codes get replaced by new ones. For the medical billing team as well as researchers, it is important to fully understand the medical procedures and the corresponding codes to effectively document their interests.
Procedure Codes in Medical Billing:
Using CPT and HCPCS procedure codes, specific numbers are assigned to the procedure or service provided to a patient covered by Medicare.
HCPCS Medicare ensures uniformity by ensuring that everyone uses the same HCPCS Medicare codes for the same medical services. For example, no matter what physician a Medicare patient visits for an allergy injection (HCPCS Code no 95115) that physician will be paid the same amount that another physician in that same region would be paid.
What are CPT codes?
CPT or Current Procedural Terminology 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.
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.
What are HCPCS Codes?
HCPCS or Healthcare Common Procedure Coding System is a set of codes that describe the supplies, drugs, and those services that are not included in CPT.
Similar to CPT, HCPCS codes consist of five digits, with the first being a letter and the subsequent four digits are numbers. Where the CPT codes are maintained by AMA, HCPCS codes are administered by the CMS.
Why are Procedure Codes Important?
Procedure codes allow healthcare providers, manufacturers, and payers to specifically identify the services, healthcare, or products provided to patients, during the claims and billing process.
Procedure codes serve as a common identifier for obtaining data to measure cost and outcomes, utilized by healthcare providers, manufacturers, and payers alike.
During the reimbursement process, it is required that every procedure, service, and the product was given during healthcare be assigned to the corresponding CPT or HCPCS code.
Conclusion
In order for procedure coding to be done properly, it is important for your organization to have an in-depth knowledge about CPT and HCPCS procedure codes especially since the code sets are updated frequently.
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