Haris Ashley
Doctors and healthcare professionals use medical codes to describe diagnoses and treatments. These codes are used by insurance companies to determine whether to approve claims and how much to pay healthcare providers. Medical codes are also used to understand medical billing and can affect what patients pay and what is covered by their health insurance. Different types of medical codes include CPT (Current Procedural Terminology) codes, HCPCS (Healthcare Common Procedure Coding System) codes, and ICD-11 (International Classification of Diseases, 11th revision) codes.
| Characteristics | Values |
|---|---|
| Name | Current Procedural Terminology (CPT) codes |
| Description | Codes for every medical procedure |
| Developer | American Medical Association |
| Used by | Medicare |
| Overlap | HCPCS codes for services that have CPT codes |
| Example | 99202 through 99205: Office or other outpatient visits for the evaluation and management of a new patient, with the CPT code differing depending on how long the provider spends with the patient |
| Other codes | ICD-11 (International Classification of Diseases, 11th revision) maintained by the World Health Organization |
| Purpose | Used by health plans to make decisions about prior authorization requests and claims, and to determine how much to pay healthcare providers |
| Where to find | Explanation of Benefits (EOB) document or medical bills |
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What You'll Learn
CPT (Current Procedural Terminology) codes
CPT, or Current Procedural Terminology, is a set of medical codes used by healthcare professionals to describe medical diagnoses and treatments. CPT codes are used to streamline reporting, increase accuracy and efficiency, and standardize reporting of medical, surgical, and diagnostic services and procedures. They are integral to billing medical services and procedures for reimbursement and are used to report procedures and services to federal and private payers. CPT codes are also used for administrative management purposes such as claims processing and developing guidelines for medical care review.
CPT codes are developed and maintained by the American Medical Association (AMA). CPT has been the primary medical language used to communicate across healthcare for over 50 years, enabling seamless processing and advanced analytics for medical procedures and services. The CPT code set is constantly updated by the CPT Editorial Panel, with new, revised, and deleted codes released annually, along with smaller updates throughout the year. These updates reflect advances in medicine and innovations to help improve the delivery of care. The CPT code set relies on a rigorous, transparent, and open process led by the CPT Editorial Panel, which is an independent group of expert volunteers representing various sectors of the healthcare industry.
CPT codes consist of five characters, mostly numeric, but some codes have a fifth alpha character, such as F, T, or U. For example, 33275 is the CPT code for "Transcatheter removal of permanent leadless pacemaker, right ventricular, including imaging guidance (e.g., fluoroscopy, venous ultrasound)". CPT codes have descriptors that correspond to a procedure or service and are generally ordered into sub-categories based on procedure/service type and anatomy. There are three categories of CPT codes:
- Category I: Codes that correspond to a procedure or service, ranging from 00100-99499.
- Category II: Optional supplemental alphanumeric tracking codes used for performance measurement.
- Category III: Temporary alphanumeric codes for new and developing technology, procedures, and services used for data collection, assessment, and, in some cases, payment for new services and procedures that do not meet the criteria for a Category I code.
Healthcare providers use CPT codes to submit claims to health plans or insurance companies to request payment. Insurance companies use these codes to review whether the services were necessary and to determine how much to pay the healthcare providers. CPT codes are often listed on Explanation of Benefits (EOB) forms or documents sent by insurance companies after paying for a healthcare service. Reviewing the EOB is important to ensure that the correct CPT codes were used and that there were no billing errors.
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HCPCS (Healthcare Common Procedure Coding System) codes
Doctors and other healthcare professionals use medical codes to describe medical diagnoses and treatments. These codes are important for understanding how medical billing works and can affect what you pay and what is covered under your health insurance. Insurance codes are used by health plans to make decisions about prior authorization requests and claims, and to determine how much to pay healthcare providers. Typically, you will see these codes on your Explanation of Benefits (EOB) and medical bills.
The Healthcare Common Procedure Coding System (HCPCS) is a standardized alphanumeric code system necessary for medical providers to submit healthcare claims to Medicare and other health insurances in a consistent and orderly manner. HCPCS includes two medical code sets, HCPCS Level I and HCPCS Level II. HCPCS Level I consists of the Current Procedural Terminology (CPT) code set and is used to submit medical claims for procedures and services performed by physicians, non-physician practitioners, hospitals, laboratories, and outpatient facilities. CPT is a uniform coding system consisting of descriptive terms and identifying codes used primarily to identify medical services and procedures furnished by physicians and other healthcare professionals for which they bill public or private health insurance programs. The CPT codes consist of 5 numeric digits and are maintained by the American Medical Association (AMA), which republishes and updates the codes annually.
HCPCS Level II is the national procedure code set for healthcare practitioners, providers, and medical equipment suppliers when filing health plan claims for medical devices, supplies, medications, transportation services, and other items and services. HCPCS Level II codes are used to identify products, supplies, and services that aren't covered under CPT codes, including ambulance services, durable medical equipment (wheelchairs, crutches, etc.), prosthetics, orthotics, and supplies (DMEPOS) when used outside a physician's office. Not all payers accept HCPCS Level II codes, and the existence of a code does not indicate third-party coverage, so medical coders must verify coverage with the payer prior to submitting a claim. CMS maintains HCPCS Level II codes, including decisions about additions, revisions, and deletions to the codes, and updates them throughout the year based on factors that include public input and feedback from providers, manufacturers, vendors, specialty societies, Blue Cross, and others.
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ICD-11 (International Classification of Diseases, 11th revision) codes
Doctors and other healthcare professionals use medical codes to describe medical diagnoses and treatments. These codes are important for understanding how medical billing works and can affect what you pay and what is covered under your health insurance. Healthcare providers submit claims to insurance companies, using these codes to show the services provided to patients. Insurance codes are used by health plans to decide on prior authorization requests and claims, and to determine how much to pay healthcare providers.
The ICD-11 (International Classification of Diseases, 11th revision) is maintained by the World Health Organization (WHO). The ICD-11 MMS consists of approximately 85,000 entities, which can be chapters, blocks, or categories. Chapters are the top-level entity of the hierarchy, and there are 28 of them. Blocks are used to group related categories or blocks together, and categories can be anything relevant to healthcare. Every category has a unique, alphanumeric code called an ICD-11 code, or simply an ICD code. Chapters and blocks never have ICD-11 codes and, therefore, cannot be diagnosed.
The ICD-11 MMS features a more flexible coding structure than its predecessor, the ICD-10. In the ICD-10, every code starts with a letter followed by a two-digit number, creating 99 slots (excluding subcategories and blocks). In the ICD-11 MMS, there is a single first character for every chapter. The codes of the first nine chapters begin with the numbers 1 to 9, while the next nineteen chapters start with the letters A to X. The letters I and O are not used to prevent confusion with the numbers 1 and 0. The chapter character is then followed by a letter, a number, and a fourth character that starts as a number (0-9) and may then continue as a letter (A-Z).
The ICD-11 MMS also contains residual categories, or residual nodes, which are the "Other specified" and "Unspecified" categories. The former can be used to code conditions that do not fit with any of the more specific MMS entities, while the latter can be used when necessary information may not be available. The ICD-11 Reference Guide advises that healthcare workers always aim to include the most specific level of detail possible, either with one code or multiple codes. Residual nodes are displayed in maroon in the ICD-11 Browser.
The ICD-11, including the ICD-11 Foundation and the MMS, can be accessed using a multilingual REST API. The WHO has released spreadsheets that can be used to link and convert ICD-10 codes to ICD-11 codes. The ICD-11 Foundation and the MMS are updated annually. The ICD-11 MMS takes the form of a "flat" hierarchical tree, where entities can only have a single parent and must be mutually exclusive of each other. To make up for this limitation, the hierarchy of the MMS contains gray nodes, which appear as children in the hierarchy but have a different parent node.
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Medicare and Medicaid
Doctors and other healthcare professionals use medical codes to describe medical diagnoses and treatments. These codes are important for understanding medical billing and can affect what you pay and what is covered by your health insurance. Insurance companies use these codes to decide on prior authorization requests and claims and to determine how much to pay healthcare providers.
Medical codes are used by healthcare providers to submit claims to insurance companies. These codes show the services provided to patients, which the insurance companies use to review whether the services were needed and how much they will pay the healthcare provider.
In the United States, Medicare is a federal health insurance program for individuals aged 65 and over and certain individuals under 65 with disabilities or specific conditions. It is divided into several parts, with Part A covering inpatient hospital care, skilled nursing facility care, hospice care, and home health care. Part B covers outpatient services, while Part D covers prescription drugs. Original Medicare includes Parts A and B, and individuals can join a separate Medicare drug plan for drug coverage (Part D). Medicare Advantage is a bundled plan offered by private companies that include Parts A, B, and usually D.
Medicaid, on the other hand, is a joint federal and state program that provides health coverage for low-income individuals, families, children, pregnant women, the elderly, and people with disabilities. It also offers benefits such as nursing facility services, home health services, and assistance with Medicare premiums. Eligibility requirements for Medicaid vary, with income limits ranging from $1,325 to $5,302 per month for individuals, and financial resource limits of $4,000 to $9,660.
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Billing errors
To avoid billing errors, it is important for patients to understand the codes used in their medical billing history. Patients should carefully review their Explanation of Benefits (EOB) to ensure that the services billed were actually received, and that the diagnosis, procedure, and associated codes are correct. By comparing the EOB with an itemized bill from the healthcare provider, patients can identify potential coding errors that may result in higher out-of-pocket expenses.
Common billing errors include unbundled charges, where providers separate services that should be charged under a single code, and upcoding, where an incorrect code results in higher charges for the patient and their health plan. Other errors may include incorrect patient information, such as mistakes in the patient's name or policy number, or mismatched diagnosis/treatment codes, where the diagnosis and treatment listed do not align.
To summarize, billing errors can occur due to inconsistencies between the codes used by healthcare providers and insurance companies. These errors can lead to increased financial burden on patients and potential claim denials. By understanding insurance codes and carefully reviewing billing documentation, patients can identify and dispute billing errors, ensuring accurate and fair payment for their healthcare services.
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Frequently asked questions
Medical codes are used by doctors and other healthcare professionals to describe medical diagnoses and treatments. These codes are important for understanding how medical billing works and can affect what you pay and what is covered under your health insurance.
There are several types of medical codes used for different purposes. The CPT (Current Procedural Terminology) codes are developed and maintained by the American Medical Association. The HCPCS (Healthcare Common Procedure Coding System) is used by Medicare and overlaps with CPT codes. ICD-11 (International Classification of Diseases, 11th revision) is maintained by the World Health Organization.
Insurance companies use medical codes to review whether the services provided by healthcare professionals were necessary and to determine how much to reimburse them.
It is important to review your Explanation of Benefits (EOB) carefully to identify any errors in the billing process. If you notice any discrepancies, you should contact your healthcare provider and insurance company to correct the issue.
