Which Coding System Is Used To Report Procedures And Services On Claims

What is CPT^®?

Integral to billing medical services and procedures for reimbursement, CPT^® is the language spoken between providers and payers.

Current Procedural Terminology, more commonly known as CPT^®, refers to a set of medical codes used by physicians, allied health professionals, nonphysician practitioners, hospitals, outpatient facilities, and laboratories to describe the procedures and services they perform.

Specifically, CPT^® codes are used to report procedures and services to federal and private payers for reimbursement of rendered healthcare.

In 1966, the American Medical Association (AMA) created CPT^® codes to standardize reporting of medical, surgical, and diagnostic services and procedures performed in inpatient and outpatient settings. Each CPT^® code represents a written description of a procedure or service, eliminating the subjective interpretation of precisely what was provided to the patient.

To accommodate the evolving world of healthcare—including the availability of new services and the retirement of outdated procedures, among other considerations—the AMA updates the CPT^® code set annually, releasing new, revised, and deleted codes, as well as changes to CPT^® coding guidelines.

Additionally, the AMA updates CPT^® nomenclature, or medical language, to reflect advances in medicine. Although the AMA owns the copyright to CPT^®, it invites providers and organizations to participate in the ongoing maintenance of the code set, welcoming those who use it to suggest changes to codes and code descriptors.

Recognizing CPT^® Codes

CPT^® codes consist of 5 characters. The majority of codes are numeric, but some codes have a fifth alpha character, such as F, T, or U. Examples include

33275—Transcatheter removal of permanent leadless pacemaker, right ventricular
3006F—Chest X-ray results documented and reviewed (CAP)
0510T—Removal of sinus tarsi implant
0079U—Comparative DNA analysis using multiple selected single-nucleotide polymorphisms (SNPs), urine and buccal DNA, for specimen identity verification

Understanding the Types of CPT^® Codes

Coders assign a code for every service or procedure a provider performs. CPT^® even includes codes called unlisted codes for those services and procedures not specifically named in another defined CPT^® code.

Given the vast number of services and procedures, the AMA has organized CPT^® codes logically, beginning with classifying them into three types.

CPT^® Category I —the largest body of codes consisting of those commonly used by providers to report their services and procedures
CPT^® Category II —supplemental tracking codes used for performance management
CPT^® Category III —temporary codes used to report emerging and experimental services and procedures

Navigating Category I Codes

Most CPT^® codes are Category I codes. These represent existing services or procedures widely used and, when appropriate, approved by the Food and Drug Administration (FDA).

With two exceptions, Category I codes, denoted by five numeric characters, are arranged in numerical order. One discrepancy to the expected order involves resequenced codes. To give medical coders convenient access to related codes—and thereby assist in accurate code selection—the AMA "clusters" similar codes together. A resequenced code comes about when a new code is added to a family of codes but a sequential number is unavailable.

The second exception to numerical code order involves evaluation and management (E/M) codes. As you see in the Category I code outline below, although E/M codes start with the number 9, they are printed first in CPT^® code books. The AMA chose this order because E/M services are the most frequently reported healthcare services. This arrangement, as with resequenced codes, is designed for coding efficiency.

The 6 main sections of CPT^® Category I codes are

Evaluation & Management Services (99202 – 99499)
Anesthesia Services (01000 – 01999)
Surgery (10021 – 69990) – further broken into body area or system within this code range
Radiology Services (70010 – 79999)
Pathology and Laboratory Services (80047 – 89398)
Medical Services and Procedures (90281 – 99607)

Getting Acquainted with Category II Codes

Category II codes, consisting of four numbers and the letter F, are supplemental tracking and performance measurement codes that providers can assign in addition to Category I codes. Unlike Category I codes, Category II codes are not linked to reimbursement.

Providers use Category II codes—which track specific information about their patients, such as whether they use tobacco—to help them deliver better healthcare and achieve better outcomes for their patients.

You'll find Category II codes directly after the Category I codes in your CPT^® code book. These codes are arranged as follows

Composite Measures (0001F – 0015F)
Patient Management (0500F – 0584F)
Patient History (1000F – 1505F)
Physical Examination (2000F – 2060F)
Diagnostic/Screening Processes or Results (3006F – 3776F)
Therapeutic, Preventive, or Other Interventions (4000F – 4563F)
Follow-up or Other Outcomes (5005F – 5250F)
Patient Safety (6005F – 6150F)
Structural Measures (7010F – 7025F)
Nonmeasure Code Listing (9001F – 9007F)

Introducing Category III Codes

Category III codes, depicted with four numbers and the letter T, follow Category II codes in the coding manual. These are temporary codes that represent new technologies, services, and procedures.

Temporary codes describing new services and procedures can remain in Category III for up to five years. If the services and procedures they represent meet Category I criteria—which includes FDA approval, evidence that many providers perform the procedures, and evidence that the procedures have proven effective—they will be reassigned Category I codes. Conversely, Category III codes can be eliminated if providers do not use them.

The AMA release new or revised Category III codes semi-annually via their website but publishes the Category III deletions annually with the full set of temporary codes.

Learning How to Use CPT^® Codes

Rules, notes, code descriptors, conventions, guidelines—there's a lot for new CPT^® coders to digest.

First, as you might imagine, procedural coding necessitates a solid grasp of anatomy and medical terminology. One procedure might have numerous variations, differing only slightly, and selecting the right code will require an ability to comprehend the clinical documentation and code description—to understand what a given procedure is, how the physician performed it, and which code descriptor captures the highest specificity of the procedure performed.

What's more, this knowledge of anatomy and medical terminology must be thorough, as providers can perform services calling for CPT^® codes from any section in the coding manual. They are not limited by the specialty in which they practice. For example, X-ray codes are listed under radiology, but a primary care coder will be required to assign an appropriate X-ray code if the primary care physician interprets an X-ray.

Building Confidence with CPT^® Coding Guidelines

The AMA provides CPT^® coding guidelines that detail when and how to assign codes, how providers perform procedures, which codes can and can't be reported together, and other factors critical to compliant coding.

It can't be emphasized enough to review the CPT^® guidelines laid out in each section, subsection, subheading, category, and subcategory—before attempting to assign codes within that classification.

Equally important, before assuming a position with the responsibility of determining and reporting CPT^® codes on medical claims, consider seeking proper training and credentialing. This is the best way to ensure coding accuracy and optimal reimbursement for your employer.

Appending Modifiers to CPT^® Codes

Reporting CPT^® codes requires familiarity with CPT^® modifiers and their use.

What is a CPT^® modifier? A modifier consists of two numbers, two letters, or a number and a letter. Many situations require a coder to append a modifiers to a CPT^® code to further describe the service or procedure provided. For example, some modifiers show that a procedure was performed on the right side of the body, versus the left side or both sides. Other modifiers indicate that a physician took extra time and effort to perform a service or procedure.

Maybe you wonder why a CPT^® code doesn't include the additional information provided by a modifier. Quite simply, CPT^® code books would be too large and cumbersome if they contained a code for every scenario a coder might encounter. A short list of modifiers goes a long way in expanding the unique circumstances of services and procedures performed.

As with CPT^® codes, the AMA creates and annually maintains modifiers for CPT^® coding. Coders will find these modifiers listed in their CPT^® code book. Do note, though, that payers might use modifiers differently, so it's important to verify each payer's modifier requirements. Also note that some codes are "modifier exempt," which the AMA indicates in the manual beneath applicable codes.

Relating CPT^® to Other Codes Sets

CPT^®, as you may know, is one of four primary code sets. The other code sets are

HCPCS Level II —used to report procedures, services, supplies, drugs, and equipment
ICD-10-PCS —used to report inpatient procedures (hospitals)
ICD-10-CM —used to report diagnoses for patients of inpatient or outpatient providers

To explain HCPCS Level II codes, and how they compare to CPT^® codes, let's back up.

HCPCS (pronounced "hick-picks") stands for Healthcare Common Procedural Coding System. What we refer to as HCPCS codes is actually Level II of this system, or Level II HCPCS codes. Level I of the Healthcare Common Procedural Coding System consists of the CPT^® code set. The main take away is the understanding that, essentially, HCPCS Level II begin where CPT^® ends.

The Centers of Medicare and Medicaid Services (CMS) wanted a classification system for medical supplies, equipment, medications, and services not included in CPT^®—so, in 1980, the AMA worked with CMS to develop a new set of codes.

The resulting HCPCS Level II code set was originally used for Medicare patients, but other payers found them useful and began to require providers to use them.

Examples of services, supplies, and items with HCPCS Level II codes include orthotic and prosthetic procedures, hearing and vision services, ambulance services, medical and surgical supplies, drugs, nutrition therapy, and durable medical equipment.

Like the CPT^® code set, the HCPCS Level II permanent code set is updated annually, maintained by CMS. The HCPCS Level II temporary codes are updated quarterly.

Establishing Medical Necessity

Successful coding requires that a patient's diagnosis justifies the service or procedure that the provider performed. This justification is referred to as medical necessity—and this is where ICD-10-CM coding ties in with CPT^® coding (and HCPCS Level II).

Every claim submitted for reimbursement will include a CPT^® code(s) for the service or procedure, as well as an ICD-10-CM code(s) that reports the patient's diagnosis to the highest level of specificity.

The ICD-10-CM code (diagnosis) must establish medical necessity for the CPT^® code (service or procedure).

An example of a diagnosis and service meeting medical necessity is when a patient comes into a medical office complaining of stomach pain, and the physician conducts a physical examination. The stomach pain (diagnosis) justifies the reason for the examination (service).

Preparing for a Career in Medical Coding

While medical coding is complex, you do not need a college degree to become a coder. If you work in a healthcare setting, depending on your responsibilities, you might gradually pick up the intricacies involved with CPT^®, ICD-10, and HCPCS Level II coding. Still, it's wise to gain certification. Not only will certification ensure that you possess the knowledge required to code accurately, it also will advance your career and earning potential.

Additionally, whether you're employed as a medical coder or studying to become a certified professional coder, you'll need a current CPT^®, ICD-10-CM, and HCPCS Level II code books. If you plan to work in a hospital as an inpatient coder, you'll also need an ICD-10-PCS code book.

For quick access to a list of CPT^® codes and descriptions, working medical coders typically use software with procedure code lookup, though these tools are also available to students. The key to coding success is to stay current—always, always reference the current code sets.

See the full list of CPT^® codes.

Last Reviewed on May 20, 2021 by AAPC Thought Leadership Team

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