What are CPT Codes, and how do they simplify Medical Billing?
Medical pricing structures are complicated for many individuals. This might result in many excessive and seemingly inconsistent medical bills. Let’s get some clarity on billing structures.
The billing procedure relies heavily on CPT codes. Essentially, these codes specify the type of care that was given.
What is a CPT code?
The Current Procedural Terminology (CPT) codes offer doctors and healthcare professionals a uniform language for coding medical services and procedures to streamline reporting and increase accuracy and efficiency.
CPT codes are also used for administrative management, such as processing claims and developing medical care review guidelines.
CPT codes exist for practically anything a certified medical provider can do, and new ones are added every year.
The American Medical Association created the system in 1966 and is still in charge of it now. The system was designed initially to codify only surgical procedures. Still, 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 and the CPT system for identifying medical operations.
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.
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 a specific service and is converted into a numeric or alphanumeric code.
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The Types of CPT Codes
Medical services use different categories of CPT codes to record services and additional patient data. Essentially the codes retrieve details about services rendered and fees charged for patients, simplifying the billing and documentation process.
- 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:
1. Evaluation & Management
2. Pathology & Laboratory
3. Anesthesiology
4. Radiology
5. Surgery
6. Medicine
The documentation and coding of more minor details or services are also done. For example, extra materials utilized, such as sterilization or medications, could be coded. 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. They are intended to provide additional information. For example, extra information about patient treatment, medical history, and follow-ups could be recorded. - 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 track the best emergency medical techniques.
Also Read: Robust Case Management System Helps Handle Challenges in Medical Billing
How are CPT Codes created and maintained?
The CPT Editorial Panel updates the CPT code set, with input from clinical and industry experts, to reflect current clinical practice and the most recent advancements to help enhance care delivery.
CPT has been the principal medical language used to communicate throughout the healthcare system for over 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 maintains and revises 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).
How exactly are CPT Codes used?
CPT codes directly impact how much a patient pays for medical services. That’s why offices, hospitals, and other medical institutions are extremely meticulous regarding coding. They frequently hire expert medical coders or coding services to guarantee that operations are coded accurately.
- 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 quickly based on the service name.
- Processing of Claims
Your health plan or payer then uses the codes to process the claim and determine 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
Health insurance firms and government statisticians use coding data to forecast future healthcare expenses for people in their systems. State and federal government analysts use data from coding 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 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 each treatment’s cost was paid on your behalf. Each service will be assigned a CPT code, much like the doctor’s bill.
While it seems complicated and tedious, CPT codes have streamlined and standardized medical billing throughout the United States.