Category/ Medical Billing

CPT Coding: History, Background and How Does CPT Coding Work?

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The first version of CPT Coding was printed in 1966 and is primarily concerned with surgery. There was little prominent coding in neuroradiology. Four-digit codes were utilized at the time. When the second edition came out in 1970, each code had five digits instead of four. The 70000–79999 code range means radiology.


The third and fourth editions of CPT were published in the mid-to-late 1970s. Not unexpectedly, each version became increasingly complicated, reflecting the increasingly complex healthcare system.


Since then, this transformation has persisted. In 1983, the predecessor of the Centers for Medicare and Medicaid Services (CMS) combined CPT with the Healthcare Common Procedure Coding System, which had always done something similar to CPT.


Just as the World Health Organization’s International Classification of Diseases keeps an updated taxonomy of medical conditions, CPT keeps an updated categorization of surgical treatments.


The Kennedy Kassebaum Act, commonly referred to as the Health Insurance Portability and Accountability Act of 1996, was adopted thirty years after the CPT system was introduced. This law says that the Department of Health and Human Services has to make rules for digital transactions of health care information, such as code sets.


As a result of the Health Insurance Portability and Accountability Act, the American Medical Association decided to examine the CPT system in depth to see if the then-30-year-old system was still helpful.


As a result of this study, the CPT-5 project was founded. CPT was expanded with new nomenclature to monitor new operations and services. CPT also includes particular reporting measures that could be utilized in performance-based remuneration.


The CMS chose to formally adopt CPT codes in Medicare claims processing as a result of the Health Insurance Portability and Accountability Act’s expansion. CPT was adopted as the national coding standard for reporting medical services and procedures in 2000.


The AMA persists in recognizing the importance of preserving an up-to-date and relevant CPT coding system, which it does through House of Delegates resolutions, active physician participation in a standardized evaluation of current codes, the discontinuation of outdated codes, and authorship of new codes to reflect changes and innovations in medical practice.


The CPT codebook is a living document that is updated annually. For instance, the 2016 edition includes over 350 code changes, 140 of which are new, 134 of which are modified, and 93 of which are discarded. So, CPT is essential to providing health care in 2016 and beyond.



Qualified healthcare professionals (QHPs) must disclose their professional services in a way that institutes, corporate and state consumers, scholars, and other stakeholders can understand.


The data from QHPs is used to track healthcare utilization, determine services for reimbursement, and collect quantitative healthcare statistics on people. Healthcare insurers in the United States process about 5 billion claims for payment each year.


A uniform coding system for medical services and operations is required to ensure that healthcare data is captured precisely and consistently and that health claims for Medicare, Medicaid, and other health programs are handled correctly.


The American Medical Association (AMA) developed the Current Procedural Terminology (CPT) standard for these purposes. The AMA model creates a standard lexicon and numerical coding system to promote proper communication across various stakeholders, including patients and the medical, surgical, diagnostic, and treatments provided by QHPs.


The CPT descriptive terminology and related code codes are the most widely accepted way to describe healthcare solutions and procedures for claims, research, figuring out how much healthcare is used, making clinical recommendations, and other types of healthcare documentation.



CPT is the terminology providers, and buyers use when billing healthcare services and procedures for remuneration.


CPT, or Current Procedural Terminology, is a collection of medical codes used to define the procedures and services conducted by physicians, nonphysician practitioners, outpatient facilities, hospitals, allied health professionals, and laboratories.


CPT codes, in particular, are used to report procedures and services to federal and commercial payers for compensation for given healthcare services. CPT codes were developed by the American Medical Association (AMA) in 1966 for standardized reporting of diagnostic services, surgical, medical, and procedures conducted in hospital and community settings.


Each CPT code represents a written description of a process or service, removing the need for subjective assessment of what was provided to the patient.


The AMA updates the CPT code set annually, issuing new, amended, and deleted codes, as well as revisions to CPT coding guidelines, to reflect the expanding world of healthcare, along with the availability of new services and the deletion of outdated codes, among other factors. The AMA also issues minor modifications to specific portions of the CPT code set throughout the year.


Furthermore, the AMA changes CPT nomenclature, or medical terminology, to reflect medical breakthroughs. Even though the AMA owns the rights to CPT, it encourages providers and organizations to help keep the code set up to date by suggesting changes to the codes and how they are described.


CPT Committee Construct

What is usually referred to as “CPT” comprises two key committees: the CPT Editorial Panel and the CPT Advisory Committee.


The CPT Editorial Panel oversees the development of new and amended codes and the maintenance of code sets. This panel comprises physicians, CMS representatives, and other stakeholders.


The CPT Editorial Panel convenes three times a year. On the other hand, the CPT Advisory Committee comprises representatives from constituent societies in the AMA House of Delegates. This arrangement shows the American Society of Neuroradiology (ASNR).


The Advisory Committee helps the CPT Editorial Panel by suggesting changes to the code set and, more importantly, by giving feedback on coding proposals from other interested parties, such as industry vendors, other societies, and insurance carriers.


Categories of CPT Codes

The CPT Codes have been divided into three categories.


Category I: Category I CPT codes are the most commonly utilized in clinical practice. Medication and devices must be approved by the US Food and Drug Administration, have peer-reviewed literature showing clinical efficacy, and be routinely used by doctors in the US.


Category II: Various quality performance initiatives are reported in Category II codes and are intended to reduce administrative burdens such as medical record review to simplify involvement in quality measurements.


Category II codes are not used after Category I codes. They are intended to aid in data gathering, tracking performance, and complying with state or federal legislation but are not to be utilized for billing services or procedures. Metrics from the Physician Quality Reporting System have grown a lot, and so have the number of category II codes.


Category III: To track breakthroughs or experimental technology, Category III codes were developed in 2001. An alphanumeric descriptor differentiates these temporary codes (e.g., 3456T). The information gathered by these surveillance tags can help with the US Food and Drug Administration approval process.


Category III codes don’t need to provide the same level of evidence as Category I codes. Category III codes do not have a professional work value ascribed to them, and reimbursement for these services is at the discretion of Medicare and private payers.


Category III codes are, by definition, temporary and are only valid for five years, which can be extended once. If experimental data supports it, a Category III code can be changed to a Category I designation before the primary or renewal term ends.


The code is permitted to expire if the treatment has not yet proved efficient. The advisors and committee members use common, rigorous standards to determine medical evidence. A modern Category III code would be CT perfusion imaging.


Proprietary Laboratory Analyses (PLA) codes: These codes were recently introduced to the CPT code system and reflect unique clinical laboratory findings that can be delivered by a sole (“the exclusive”) laboratory or licensed or sold to numerous provider laboratories that are certified or approved by the Food and Drug Administration (FDA).


This category comprises Advanced Diagnostic Laboratory Tests (ADLTs) and Clinical Diagnostic Laboratory Tests (CDLTs), as specified by the Protecting Access to Medicare Act of 2014 (PAMA).


Coding that Moves Medicine:

As medical advances like genetic testing and remote patient monitoring become more common, doctors, business owners, and others in the healthcare industry will have to decide if a new or updated CPT code is needed to reflect these changes.


As they create new goods, services, and platforms that employ CPT content, technology developers will have to comprehend how and when CPT codes are updated. Our health-care system is driven by data, which is combined with medical advancement to improve patient care. With feedback from stakeholders across the health care landscape, the CPT code set is primed and ready to develop and evolve.


How Does CPT Coding Work? An Illustration:

CPT codes are made up of five digits. Most codes are digital, but some include an alpha character as a fifth, such as A, F, T, or U. Some examples are given below:


Coders provide a code for each service or treatment performed by a provider. CPT even contains unlisted codes for services and operations that are not precisely identified under any other defined CPT code. Given the massive number of services and procedures, the AMA has classified CPT codes logically, starting with three types:


CPT Category I:

The most extensive set of codes comprises those routinely used by providers to describe their services and processes. The six critical sections of CPT Category I codes are:

  • Evaluation & Management (99202–99499)
  • Anesthesia (00100–01999)
  • Surgery (10021–69990)
  • Radiology Procedures (70010–79999)
  • Pathology and Laboratory Procedures (80047–89398)
  • Medicine Services and Procedures (90281–99607)


CPT Category II:

Additional tracking codes for performance management. Category II codes are arranged in the order:

  • 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 involvements (4000F–4563F)
  • Follow-up or other conclusions (5005F–5250F)
  • Patient Safety (6005F–6150F)
  • Structural Measures (7010F–7025F)
  • Nonmeasure Code Listing (9001F–9007F)


CPT Category III:

Temporary codes are used to describe new and experimental services and practices. Category III codes are commonly shown in the code book with four numbers and a letter. They can be issued for up to five years. Suppose the services and treatments they represent meet Category I criteria, including FDA approval, proof that many practitioners perform the procedures, and evidence that the procedures have proven effective. In that case, they will be allocated as Category I codes. Category III codes, on the other hand, maybe phased out if practitioners do not use them.

Differences between Physician Billing and Hospital Billing

Physician Billing vs. Hospital Billing: Understanding the Key Differences


Physician billing and hospital billing are the two types of medical billing that prevail in the healthcare industry. But what is the difference between hospital billing and physician billing?
This post will cover some essential points regarding the difference between physician billing and hospital billing, which will help you understand what factors come into play while learning about these two types of healthcare claims.


With physician billing and hospital billing, there are specific differences to tackle. For instance, physician billing is based on the percentage of the remuneration earned through procedures or a price for different services rendered. As for hospital billing, its based on the pricier reimbursement model, where the hospital charges the patients insurance plan for the services required and received.


Professional billing relates to physician billing, and institutional billing refers to hospital billing. In the healthcare industry, professionals differentiate between these terms depending on the purpose of the billing process and the services involved. The two methods, however, fall under the general medical billing process.


To highlight the key differences between physician and hospital billing, lets find out how they are used in both cases.


Physician billing: What is it?

Physician billing, or professional billing, refers to the billing process. Where claims submitted by physicians and healthcare providers are reimbursed when performing medical services or procedures on patients covered by insurance, once you decide to become a physician billing service provider, you must help the physicians or healthcare providers with claim submission and other related billing and collection tasks.

CMS-1500 or 837-P is the claim form used for physician billing. The only difference between these forms is that the CMS-1500 is a paper document, and the 837-P is an electronic document.
•    Some insurance companies, like Medicaid, Medicare, and others, only accept electronic claims as payment methods. P stands for professional configuration on the 837-P claim form, an electronic version of CMS-1500. Most of the time, expert physician billing services have more to do than institutional or hospital billing services.
Billing a doctor is an important administrative task that controls many other tasks in a medical office, like making appointments, greeting patients, registering patients, and collecting payments. 
To make sure that the organizations overall financial and operational goals are met, people who work in medical billing and coding need to know a lot about the policies and practices of physician billing. Because physicians bill insurance companies directly for patient services, a medical offices billing department relies on the accuracy of coding and claims processing to ensure that payments are made promptly. 
The organizations ability to stay in business depends on how much money it gets for each service it provides. Medical professionals can improve their ability to collect payments by learning the basics of physician billing.
•    Both inpatient and outpatient services can be billed under physician billing; both types can only be billed after patient verification.
•    All outpatient and inpatient services will be billed based on the patients insurance policy, so its important to check.
•    It is important to keep in mind that physician billing includes medical billing and medical coding as well.
Therefore, medical billers need to learn both billing and coding procedures. Healthcare professionals offices and hospitals employ medical billing and coding teams to handle everyday billing.
The process of physician billing is complicated and detailed. It is also time-consuming and requires a lot of effort and time. Scribe Align makes it easy by connecting healthcare providers with hospitals and insurance companies so they can focus on patient care instead of insurance claim submission. By outsourcing the billing process to a healthcare billing service provider like Scribe Align, you can focus on the doctors practice and patient care instead of worrying about getting paid for the medical services.

Hospital billing: What is it?

•    The hospital or healthcare provider submits claims for inpatient and outpatient services in hospital billing. For the same reason, hospital billing can also refer to institutional billing.
•    A hospital billing system also accounts for the services provided by skilled nurses. They also bill claims for medical facilities and medical claims for laboratory services, medical equipment, radiology, supplies, etc.
•    An institutions configuration is indicated by I. Hospital billing is performed using forms UB-04 or 837-I. In contrast, the UB-04 is a paper-based form, while the 837-I is a computer-based form.
•    A physicians billing is similar to a hospitals billing, except that hospital billing only deals with the medical billing process; it does not deal with medical coding. However, physician billing also includes medical coding.
•    The hospitals appointed medical biller is only responsible for billing and collection in hospitals. It is challenging to handle hospital billing as compared with physician billing.


Billing for Physicians and Hospitals: how to increase revenue?

•    Hospitals and physicians have different billing models when it comes to revenue reimbursements. But their processes have a significant impact on preventing denials and fraud.
•    Keeping track of unbilled and unmissed claims and services becomes the physician billers priority. However, the staff should be aware of any billing or coding errors when submitting claims. Technical errors can also cause mistakes for various reasons.
•    Outsourcing healthcare billing and coding services is often the best option for hospitals and healthcare providers to avoid errors and payment losses.
•    The hospital billing process is quite different from physician billing. A hospital or institutions billing function includes collection and billing.
•    As a result, institutional cases are handled only by coding experts because hospital coding is considered more complex than physician coding.

It is essential to avoid violating HIPAA privacy and security rules since physicians and hospital billing staff have access to private and confidential patient health information.
Thank you for reading about Physician Billing and Hospital billing. I am pleased to provide you with information on physician and hospital billing.

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