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CPT® Medical Coding

A Doctor teaching his understudy about CPT medical coding.

CPT® Medical Coding

Current Procedural Terminology (CPT®) is a registered trademark of the American Medical Association (AMA). Also, the AMA developed and maintains this coding system. Medical billing and coding are critical components of the healthcare industry. This involves using a specialized system of codes known as CPT to accurately document patient visits, treatments, medications, and procedures.

Medical billing and CPT medical coding professionals ensure that accurate and up-to-date records are kept. In addition, they accurately communicate relevant information between providers and payers. As such, they must have a comprehensive understanding of medical terminology, anatomy and physiology, diagnostic procedures, and federal regulations.

What is CPT Medical Coding?

Created by the AMA more than 50 years ago, Current Procedural Terminology coding, or CPT medical coding, is an integral part of the healthcare system. CPT codes are five-digit numeric or alphanumeric codes that categorize healthcare services and procedures by type, body system, and specific service or procedure.

Each code includes information about the type of service performed as well as any required modifiers to accurately report the procedure or service. Further, they describe everything from office visits and lab tests to surgeries and x-rays.

There are three categories of CPT codes:

Category I

These codes have descriptors that correspond to a procedure or service that is FDA approved as appropriate, proven, and documented. Category I codes are the most common and widely used by healthcare professionals. The codes range from 00100–99499. and are generally ordered into sub-categories based on the procedure or service type and anatomy. These codes are billable for reimbursement.

Category II

These codes collect data about the quality of patient care to help establish and improve performance measures. Using Category II codes eases the burden of chart review. Medical professionals bill these codes in the procedure code field. However, they are not reimbursable and are billed with a $0 charge amount.

Category III

Category III CPT codes are temporary codes. The medical field uses these codes to track and collect data on the use of emerging technology, services, and procedures to measure outcomes. For example, clinical trials or considered experimental, investigations, or unproven. Because these codes are temporary, they must be accepted for placement in Category I within five years, be renewed for another five years, or be removed from the book. They may be reimbursable on a case-by-case basis.

CPT codes provide a standardized method of communication between providers, health insurance companies, and government programs like Medicare and Medicaid. By using the same code for each medical service or product throughout the healthcare system, providers and payers can easily process claims and payments. The electronic medical billing process uses CPT codes with ICD-9-CM or ICD-10-CM diagnostic coding.

The CPT Manual organizes the CPT codes into six large sections: 

  • Evaluation and management (E/M)
  • Anesthesiology
  • Surgery
  • Radiology
  • Pathology and laboratory
  • Medicine

Each section contains hundreds of individual medical services or procedures identified by their corresponding CPT code. Because of this, healthcare providers can give detailed information about the procedures performed and treatments given to their patients.

Additionally, the system assigns each code a relative value unit (RVU), which calculates the reimbursement rate for each service. RVUs take into account the time, skill, and resources involved in providing a particular procedure or service. 

The codes used for these procedures and treatments are based on a set of established rules. The CPT codes streamline the medical billing process. Ultimately, By understanding how CPT codes and RVUs work together, healthcare providers can ensure they are receiving accurate reimbursements for their services.

CPT Medical Coding offers a plethora of benefits to medical industry professionals.

Why Are CPT Medical Codes Necessary?

Every healthcare provider must use CPT codes when filing insurance claims for services rendered. The appropriate codes must be used to ensure accurate payment and reduce any potential reimbursement delays. CPT medical coding not only assists in payment processing but also serves as a means of communication between providers, insurance companies, and patients.

The CPT medical coding helps to ensure quality healthcare services are provided to patients. By using CPT codes, healthcare providers can compare treatments and procedures delivered. Also, it allows them to track patient information over time, identify best practices, and measure health outcomes. CPT codes also give providers a way to track trends in healthcare, enabling them to understand patient needs better.

CPT codes serve another important purpose within the healthcare system. They provide a common language between providers and payers. Therefore, enabling them to accurately communicate about a particular healthcare service or procedure without having to exchange lengthy descriptions. By utilizing a standardized set of codes, the entire healthcare system can ensure that all parties are on the same page when describing services and procedures. 

Finally, CPT codes play an important role in medical research. Researchers use the codes to study healthcare trends and to identify areas where additional research is needed. For example, by analyzing CPT codes, researchers can observe which services are being used more frequently or which treatments are proving to be most effective in certain conditions.

How Are CPT Medical Codes Developed?

The CPT medical coding set is copyrighted, maintained, and updated annually by the AMA. The CPT Editorial Panel meets three times a year and is authorized by the AMA Board of Trustees to maintain the CPT code set. The 21-member panel is responsible for revising, updating, or modifying CPT codes, descriptors, rules, and guidelines. 

The AMA Board of Trustees selects all members of the CPT Editorial Panel. The Centers for Medicare & Medicaid Services (CMS) have two non-voting seats on the Editorial Panel. These individuals have significant input into the panel review process like all other participants.

The national medical specialty societies select members to represent all medical professionals for 12 of the AMA-appointed seats. The panel includes a seat for the Panel chair, and vice chair, and two seats for members of the CPT Health Care Professionals Advisory Committee.

Also included are seats for representatives from the following organizations:

  • One seat for the Blue Cross and Blue Shield Association

  • One seat for the America’s Health Insurance Plans
  • One seat for the American Hospital Association
  • One seat for an at-large organizational member
  • One seat represents private healthcare insurers
doctor shows patient how to use healthcare website

CPT Medical Code Review

The CPT Editorial Panel has a large Advisory Committee that consists of medical specialty societies, individual physicians, hospitals, third-party payers, and other interested parties. This large body of advisors may submit applications for changes to CPT for consideration by the editorial panel.

After application and review the Editorial Panel’s decision results in one of four outcomes:

  • Addition of a new code or revision of existing code
  • Referral to a workgroup for further study
  • Postponement (to allow for additional information in a new application)
  • Rejection of the item

Over the last 50 years, no taxpayer money has been spent to develop or maintain the CPT code set. The CPT code set is completed annually without cost to the U.S. government. Countless hours are spent to ensure that the CPT codes accurately reflect the medical care provided to patients.

Talk to Us About Your CPT Medical Coding and Billing Needs

Billing errors are a common issue in the healthcare industry. These errors can result in increased costs, decreased efficiency, and a lack of accuracy in records. CPT coding errors occur when a healthcare professional uses incorrect codes to bill for services rendered. This can confuse both the patient and the provider, resulting in inaccurate payments or denied claims.

At Bloom Consulting Agency, our healthcare billing consultants stay current with state and federal rules and regulations. They monitor and address changes in CPT medical coding, diagnosis, and payment policies.

Talk to one of our healthcare billing professionals today.