An Introduction to Medical Care Coding

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Richard Duszak, Jr., MD is nationally recognized for his work in imaging health policy, Duszak came to Emory after serving as founding CEO of the Neiman Health Policy Institute and president of a regional health system based radiology practice. A recent member of the CPT Editorial Panel, he has held numerous national professional society leadership positions and currently serves as Associate Editor for Health Services Research and Policy for the Journal of the American College of Radiology. Rich recently came to OTT for a lunch and learn and shared with us some of his experience with healthcare coding. Healthcare Insurance graphic

At a high level what are CPT and ICD codes and who oversees them?

  • CPT stands for Current Procedural Terminology and are the codes used by healthcare providers to describe the services provided. The code set is maintained by CPT Editorial Panel, which is appointed by the American Medical Association. CPT codes have three categories. Category I is the most broadly used and are most likely recognized by insurers in their coverage determinations. Category II are primarily for performance management. Category III are temporary codes for emerging and experimental items. These codes may become Category I codes at a later time should they meet rigorous literature and utilization criteria.
  • There are around 50,000-60,000 CPT codes, with around 1,500 new or changed code requests per year.
  • Category I CPT codes are divided into six groups: evaluation & management, anesthesiology, surgery, radiology, pathology & laboratory, and medicine.
  • ICD codes are the International Classification of Diseases which is a set of codes to describe diagnoses, symptoms and procedures in conjunction with hospital care. These codes are maintained by the World Health Organization, and are thus separate and distinct from CPT codes. These codes are also used to classify mortality data from death certificates.
  • CPT and ICD codes are used together to fully describe medical events.
  • Additionally, there one other sets of codes. The HCPCS codes which stands for Healthcare Common Procedure Coding System overseen by the Centers for Medicare and Medicaid Services (CMS). CPT codes are designated as Level I HCPCS codes. For services for which CPT codes may not exists, CMS creates its own (Level II) HCPCS codes.

At a high level how are CPT codes added or removed?

  • There is a CPT Editorial Panel comprised of 17 mostly physician members which meets three times a year. A coding change request form is submitted to the CPT Advisory Committee for review which provides clinical expertise and other comments to facilitate the Editorial Panel’s deliberations. If the Editorial panel approves the code change proposal, it is referred then for valuation and ultimate inclusion in the official code set released each year. If the Editorial Panel rejects the request, there is an available appeals process.

At a high level what are the minimum criteria necessary for a CPT code?

Category I

  • Has received Food and Drug Administration (FDA) approval.
  • Is a distinct service performed by medical practitioners.
  • Has a well-established clinical efficacy in the U.S. and is documented.
  • Is not a fragmentation of an existing code or can be reported by more than one existing code.
  • Is not a means to report extraordinary circumstances related to existing codes.

Category III

  • A protocol for studying procedures.
  • Support from relevant specialties.
  • Availability of U.S. peer reviewed literature.
  • Description of current U.S. trials.

When evaluating innovation, how do CPT codes and reimbursement factor in?

  • Understanding how both the company and physician would get paid can clarify the business model for commercializing the innovation.
  • If reimbursement is possible under an existing code, the path to market may be more straightforward.
  • Not every product requires its own code. In fact, the CPT Editorial Panel strives to make services vendor agnostic whenever possible.

What are some examples of potential innovations that wouldn’t require a CPT code?

  • Something that a provider (doctor) pays for rather than an insurer (e.g., an enhanced computer system).
  • An improved service rather than a new service (e.g., a stent made out of a different alloy).
  • An existing CPT code already covers it (most CPT codes are vendor agnostic).