What Are CPT Codes And What Do They Mean In Medical Billing?
Medical pricing structures are a mystery to many individuals. For many of them, this might result in exorbitant and seemingly inconsistent medical bills. In this piece, we’ll try to de-mystify medical pricing and provide people like you the power to choose the most valuable solutions for care.
The medical billing procedure relies heavily on CPT codes. Essentially, these codes specify the type of care that was given. CPT codes exist for practically anything a certified medical provider can do, and new ones are added every year.
The American Medical Association assigns a unique 5-digit code based on Current Procedural Terminology (CPT) to each unique medical treatment or procedure a doctor provides. CPT is utilized throughout the United States medical system.
The CPT Editorial Panel of the American Medical Association maintains and approves changes to the CPT Code list, and meets three times a year to “seek direct input from practicing physicians, medical device manufacturers, developers of the latest diagnostic tests, and advisors from over 100 societies representing physicians and other qualified health care professionals.”
If you’re a healthcare provider, Medical CPT Coding refers to the codes that you and other medical professionals, as well as laboratory employees, use to document the medical services and treatments offered to your patients.
CPT stands for Current Procedural Terminology, and medical billing professionals who process laboratory billing claims enter the five-digit codes. Depending on the method or service, each unique code refers to certain service and is converted into a numeric or alphanumeric code.
CPT (Current Procedural Terminology) codes are a worldwide coding system for medical treatments. Each operation is assigned a five-digit code that indicates the type of service supplied to health insurance companies. The code 90387, for example, is described as “Individual Psychotherapy. 60 minutes.”
Also Read: Challenges and Opportunities for the Medical Billing Industry
Here’s a very Brief History of CPT
The American Medical Association created the system in 1966, and it is still in charge of it now. The system was originally designed to codify only surgical procedures, but in 1983, the Health Care Financing Administration (HCFA), now known as the Centers for Medicare & Medicaid Services, adopted it to report all provider services (CMS).
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 created guidelines for electronic health data storage and transmission, as well as the CPT system for identifying medical operations.
CPT codes are distinct from ICD-10 codes, which identify medical diagnosis rather than the treatment performed. These codes are also required for billing insurance companies since they clarify why the CPT code treatment was provided.
The Different Categories of CPT Codes
Category 1
Medical providers and laboratories use Category 1 CPT codes to describe specific operations and services. Because it is one of the most significant categories of the three, many medical coders concentrate on and use these codes the most. Category 1 is broken into the following six sections:
- Evaluation & Management
- Pathology & Laboratory
- Anesthesiology
- Radiology
- Surgery
- Medicine
The documentation and coding of smaller details or services are also done. Extra materials utilized, such as sterilization or medications, could be coded, for example. Modifiers are used in conjunction with codes.
Modifiers are two-character (typically numerical) extensions added at the end of a CPT code to provide additional information about the services or procedures. These modifiers are necessary for accurate laboratory billing because they give information that insurance companies require to authorize claims.
Category 2
Category 2 CPT Codes keep track of any additional information you submit. These codes are never intended to replace Category 1 or Category 3 codes; rather, they are intended to provide additional information. Extra information about patient treatment, medical history, and follow-ups, for example, could be recorded.
With Category 2 CPT codes, you can include a lot of information, but they are just a few examples. To ensure that they are accurately classified, alphanumeric codes in Category 2 always finish in “F.” These (and all of the other categories’ codes) are classified in very particular ways based on the information or details provided by providers.
Category 3
Category 3 CPT Codes, on the other hand, are for innovative and evolving technology and services. Temporary codes for urgent and experimental services make up Category 3. They assist health providers and the government in tracking the best emergency medical techniques.
Many Category 3 codes are subsequently reclassified as Category 1, but only after they have been approved by the CPT Editorial Panel. Category 3 codes are alphanumeric codes with a “T” at the end.
Many of the codes in these three categories are updated, altered, and even discarded if they are no longer relevant or useful. You’ll need educated laboratory billing professionals that stay up to date on new CPT codes and understand the necessity of precise coding to guarantee you get the most money for the services you provide.
To stay up with contemporary medical treatments, a group of 11 experts appointed by diverse medical and insurance stakeholders advises on annual modifications to the CPT codes. The AMA announces these modifications in September, and they take effect on January 1 of the following year. It is critical for all practitioners to be aware of any code changes in their area, as utilizing obsolete CPT codes on a superbill will result in the client’s claim being rejected immediately.
Also Read: Robust Case Management System Helps Handle Challenges in Medical Billing
How are CPT Codes Created and Maintained?
The CPT code set is updated on a regular basis by the CPT Editorial Panel, with input from clinical and industry experts, to reflect current clinical practice and the most recent advancements in order to help enhance care delivery.
CPT has been the major medical language used to communicate throughout the healthcare system for more than 50 years, allowing for smooth processing and enhanced analytics for medical operations and services.
The AMA Board of Trustees appoints the CPT Editorial Panel, which is in charge of maintaining and revising the CPT code set. The CPT Editorial Panel is a non-profit organization of expert volunteers from many areas of the healthcare industry.
CPT Advisors, groups of physicians chosen by national medical specialty organizations represented in the AMA House of Delegates and the AMA Health Care Professionals Advisory Committee, support the CPT Editorial Panel (HCPAC).
The primary role of CPT Advisors, as clinical experts in their fields, is to advise the CPT Editorial Panel on procedure coding and appropriate nomenclature by proposing code set revisions, working with industry stakeholders as they consider additions and changes to CPT, and educating their members on the use and benefits of CPT codes.
In essence, their job is to make sure that code modifications are subjected to an evidence-based review and that they match certain criteria.
What Does This Actually Mean For Patients?
Based on the number of services performed and the complexity of the decision-making processes involved, the CPT code system provides for five “levels” of office visits with a primary care physician. Prescription drugs, immunizations, surgical procedures, and lab tests are all invoiced separately from routine office visits.
Because new patient visits take longer and need more paperwork than follow-up visits, new patient visits are more expensive for the same “degree” of complexity. A “new patient” is defined as “someone who has not received professional services from the physician, or another physician in the same specialty who is a member of the same group practice, in the previous three years.”
For financial reasons, some doctors may refuse to accept certain types of insurance; others may be members of concierge or other group practices that prevent them from accepting self-pay customers. Check with a doctor ahead of time to determine whether he or she will accept your preferred method of payment.
Patients who pay cash in advance of an office visit have reason to be optimistic, as many clinics offer sliding scale discounts depending on income, and many physicians offer discounts of 30% or more to those who pay cash in advance of an office visit.
How Exactly are CPT Codes Used?
CPT codes have a direct impact on how much a patient pays for medical services. That’s why offices, hospitals, and other medical institutions are extremely meticulous when it comes to coding. To guarantee that operations are coded accurately, they frequently hire expert medical coders or coding services.
Initial Coding
Typically, your practitioner (or their staff) initiates the coding process. If they use paper encounter forms, they will manually note which CPT codes apply to your visit. If they use an electronic health record (EHR) during your visit, it will be recorded that way. Generally, systems allow people to pull up codes easily based on the service name.
Processing of Claims
The codes are then used by your health plan or payer to process the claim and figure out how much to reimburse your doctor and how much you may owe.
Submission & Verification
Medical coders and billers analyze your records after you leave the doctor’s office so they can assign the correct codes if they haven’t already.
The billing department then sends your insurer or payer a list of the services you received. Doctors and facilities typically keep and transfer this information electronically, while some may still be done via mail or fax.
Research
Coding data is used by health insurance firms and government statisticians to forecast future health care expenses for people in their systems. Data from coding is used by state and federal government analysts to track trends in medical treatment and estimate their Medicare and Medicaid budgets.
Where are you Expected to see CPT Codes?
CPT codes can be found and utilized in a variety of documents as you progress through your medical treatment.
Paperwork for Discharge
When you leave a doctor’s office or are discharged from a hospital or other medical facility, you are given paperwork with a numerical summary of the services you received.
CPT codes are the most common five-character codes. There are also other codes on the papers, such as ICD codes, which can be numbers or letters and frequently include decimals.
Hospital Bills
A list of services will be included on your doctor’s bill, either before or after it is issued to your payer. A five-digit code will be shown next to each service. Typically, the CPT code is used.
Benefits Explanation
Your payer’s explanation of benefits (EOB) will show how much of the cost of each treatment was paid on your behalf. Each service will be assigned a CPT code, much like the doctor’s bill.