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What Are CPT Codes In Medical Billing?


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The healthcare industry thrives and burns within a code set designed for all entities to use for tracking, identifying services, payments, and gathering data for healthcare information. CPT codes in the medical billing process over five billion healthcare claims for payment each year. The American Medical Association designed CPT codes to capture services accurately and consistently. All commercial insurance payers utilize the codes and process them for provider payment. 

CPT codes in medical billing are the base for all claims and reimbursements in the medical practice. Appropriately managed CPT codes in medical billing are the driving force of the revenue cycle in the healthcare industry. Therefore, the administrators and physicians within the practice must understand the importance of hiring a billing entity that is educated and experienced in the revenue cycle. Certified coders and billers are worth the investment in salary. In addition, certified coders must maintain their certification and keep up with yearly updates. 

What is a CPT Code?

Created over fifty years ago, the CPT Editorial Panel, through the American Medical Association, designed a code set for clinical use and updated regularly to keep up with current practice and any new procedures. In addition, the AMA CPT Editorial Panel updates and modifies the codes, descriptors, coding rules, and guidelines for the CPT codes. Fifteen physicians and two CPT Health Care Professionals Advisory Committee members are on the Editorial Panel. This group began the process of using CPT codes in medical billing.

The Current Procedural Terminology (CPT®) codes were designed to impose a uniform code set for medical services and procedures. CPT codes in medical billing are the alphabet of the revenue cycle. The foundation of medical billing is based on submitting accurate claims to payers. CPT codes streamline the billing process, increase the accuracy of reporting services and procedures, and increase efficiency in turning claims into revenue.

They categorized procedures and services to include all forms of medical practice. The following healthcare practices utilize CPT codes.

Level One CPT codes include coding for the following categories:

  • Medical
  • Surgical
  • Radiology
  • Laboratory
  • Anesthesiology
  • Genomic Sequencing
  • Evaluation and Management

HCPCS are level II codes to code non-physician services, such as:

  • Ambulances and transportation of patients
  • Drugs 
  • Prosthetics

Types of CPT Codes

The United States Department of Health and Human Services, under the Health Insurance Portability and Accountability Act (HIPAA), has designated the national coding set utilizing CPT codes as evidence-based codes. Therefore, they accept the CPT code set’s accuracy for the entire healthcare industry. The CPT code set is based on a five-digit code, either numeric or alphanumeric, and based on clinically focused descriptions. As a result, CPT codes in medical billing are highly organized in easy-to-follow categories.  

A further examination of the various CPT codes can describe the different categories involved:

  • Category 1 codes: Coding numbers range from 00100 through 99499 and are listed in sub-categories based on the service, procedure, and anatomy. 
  • Category 2 codes: Alphanumeric tracking codes are utilized as supplemental codes for performance measurements. 
  • Category 3 codes: Provided as temporary alphanumeric codes for new technology still in development as procedures and services. These codes are primarily utilized for data collection, assessment, and payment of newer services. 
  • PLA codes: Proprietary Laboratory Analyses codes: This code set describes clinical laboratory analyses, including Advanced Diagnostic Laboratory Tests and Clinical Diagnostic Laboratory Tests. 

Need To Know Information with CPT Code Sets

The need to know and the nitty-gritty about CPT code sets revolve around the importance of the medical practice of employing educated, certified, and qualified medical billing staff. Therefore, CPT codes in medical billing are the critical components of understanding the driving force of the revenue cycle. Medical practices can only suffer huge losses without substantial education, certification, and experience in the healthcare revenue cycle. In addition, continuing education is necessary in the ever-changing world of changing insurance requirements, coding updates, and newly described modifiers and codes. 

Another essential coding property is the documentation behind the coding decisions supplied by the providers. For example, CPT codes in medical billing depend upon verifying each procedure and service is documented in the chart notes. Therefore, physicians must adhere to submitting the proper documentation to support the time requirements, code descriptions, and proof of medical necessity required so that coders can choose valid codes for billing. 

Providers need to understand the process of documentation to support their billing objectives. In their search to find additional code sets for their practice and specialty, they must also understand the required documentation. Healthcare consultants educated in the CPT code sets and the documentation requirements to support the codes used for services can prove priceless to the administrators. The providers must form a relationship with the billing department and form a solid foundation of trust.  

Understand CPT Codes in Medical Billing in Florida

CPT codes in medical billing are essential for maintaining a solid flow in the revenue cycle in healthcare practices. Bloom Healthcare Consulting is contacting practice administrators who are pressured to increase revenue. Certifications, education, and a relationship between the providers and the billing team are now essential. Administrators can bring their revenue issues to the table with one of our professional healthcare consultants to form a new understanding of staying current with CPT codes.

Contact Bloom Healthcare Consulting to find new ways to increase your practice revenue.