CPT Codes: What’s In It?

CPT Codes: What’s In It?

CPT codes and ICD codes are the terms used when discussing medical situations, and are used by the insurance and medical billing companies as guides. Nitin Chhoda describes the categories and roles of these codes as they relate to the physical therapy business.

CPT codes definitionCPT stands for Current Procedural Teminology. The CPT codes have been set and maintained by the American Medical Association and they are updated every year in October.

One of the easiest ways to understand the CPT codes is to compare them to ICD codes. While ICD-10 codes identify the diagnosis of a patient, CPT codes identify the services rendered.

CPT codes are used by clinicians, medical billing and coding professionals, and patients, as well as accreditation organizations, as a standardized communication tool for talking about medical services.

In fact, the reason that CPT codes are so useful is that everyone uses them when referencing medical services. The most prominent uses are in medical coding and billing, when a clinic needs to bill an insurance provider or government program. Medicare and Medicaid are both billed using CPT codes list along with ICD-10 codes.

Categories and Sections

CPT codes come in three categories, Category I, II, and III. Category I is split into six sections: Codes for Evaluation and Management, such as home services, hospital observation services, or emergency dept services; Codes for Anesthesia, such as obstetric, head, or neck; Codes for Surgery, such as nervous system, digestive system, or general; Codes for Radiology, such as nuclear medicine, diagnostic ultrasound, or mammography; Codes for Pathology & Laboratory, such as drug testing, immunology, or transfusion medicine; and Codes for Medicine, such as dialysis, allergy & clinical immunology, acupuncture, and ophthalmology.

Categories II and III are a little different. Category II are CPT codes that measure performance and are entirely optional. Category III are CPT codes for emerging technology use.

Not OptionalCPT codes defined

CPT codes are required by health insurance companies, as well as Medicare and Medicaid, in order for medical or physical therapy billing to be successful.

Additionally, HIPAA requires that CPT codes are used as part of a national data standardization and collection effort.

However, the copyright for CPT codes is help by the American Medical Association (AMA). That means that anyone who uses the CPT codes must pay license fees. This usually falls on the shoulders of health care services providers.

Insurance companies and government programs also use CPT codes as a reference for the amount of reimbursement that the clinician or clinic is paid for services. Insurance companies will negotiate with health care service providers in order to determine the precise amount, but once the amount for a service is set, all both parties need to know is which CPT code to use and the payment can be made in the agreed upon amount.

Updates and Improvements

But paying for access to CPT codes isn’t all bad. The AMA maintains the system and ensures that updates are made every year. The resulting system provides all users with a way to share information quickly and in a standardized way. The AMA has workshops to get informed feedback in order to make the system easier to use. The uniformity that CPT codes provide benefits everyone who works in medicine.