HCPCS Codes

Healthcare Common Procedure Coding System

The Healthcare Common Procedure Coding System (HCPCS, often pronounced by its acronym as "hick picks") is a set of health care procedure codes based on the American Medical Association's Current Procedural Terminology (CPT). 

HCPCS Codes are numbers assigned to every task and service a medical practitioner may provide to a Medicare patient including medical, surgical and diagnostic services. Since everyone uses the same codes to mean the same thing, they ensure uniformity. For example, no matter what doctor a Medicare patient visits for an allergy injection (code 95115) that doctor will be paid by Medicare the same amount another doctor in that same geographic region would be.

History

The acronym HCPCS originally stood for HCFA Common Procedure Coding System, as the Centers for Medicare and Medicaid (CMS) was previously (before 2001) known as the Health Care Financing Administration (HCFA). The Healthcare Common Procedure Coding System (HCPCS) was established in 1978 to provide a standardized coding system for describing the specific items and services provided in the delivery of health care. Such coding is necessary for Medicare, Medicaid, and other health insurance programs to ensure that insurance claims are processed in an orderly and consistent manner. Initially, use of the codes was voluntary, but with the implementation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) use of the HCPCS for transactions involving health care information became mandatory.

Levels of codes

HCPCS includes three levels of codes:

• Level I consists of the American Medical Association's Current Procedural Terminology (CPT) and is numeric.
• Level II codes are alphanumeric and primarily include non-physician services such as ambulance services and prosthetic devices, and represent items and supplies and non-physician services not covered by CPT-4 codes (Level I).
• Level III codes, also called local codes, were developed by state Medicaid agencies, Medicare contractors, and private insurers for use in specific programs and jurisdictions. The use of Level III codes was discontinued on December 31, 2003, in order to adhere to consistent coding standards.

CPT Codes

CPT (Current Procedural Terminology) codes

CPT Codes are numbers assigned to every task and service a medical practitioner may provide to a patient including medical, surgical and diagnostic services. They are then used by insurers to determine the amount of reimbursement that a practitioner will receive by an insurer. Since everyone uses the same codes to mean the same thing, they ensure uniformity.

It should be noted, however, that uniformity in understanding what the service is, and the amount different practitioners get reimbursed will not necessarily be the same. For example, Doctor A may perform a physical check up (99396) and be reimbursed $100 by your insurance company. If you went to Doctor B, his reimbursement by your insurance company for that same checkup, Code 99396, might only be $90. (This is not true for Medicare patients. Medicare uses HCPCS codes instead.)

(There is another set of codes used by physicians and facilities, too. These are called ICD codes, like ICD-9 or ICD-10 codes. They do not relate directly to billing, so are described separately.)

CPT codes are developed, maintained and copyrighted by the AMA (American Medical Association.) As the practice of health care changes, new codes are developed for new services, current codes may be revised, and old, unused codes are discarded. Thousands of codes are in use, and they are updated annually. Development and maintenance of these codes is overseen by editorial boards at the AMA, and the publications of all the software, books and manuals needed by those who use them brings millions in income (*see note below) to the AMA each year.

The Current Procedural Terminology (CPT) code set is maintained by the American Medical Association through the CPT Editorial Panel. The CPT code set describes medical, surgical, and diagnostic services and is designed to communicate uniform information about medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes.

New editions are released each October. The current version is the CPT 2011. It is available in both a standard edition and a professional edition.

CPT coding is similar to ICD-9 and ICD-10 coding, except that it identifies the services rendered rather than the diagnosis on the claim.

CPT is currently identified by the Centers for Medicare and Medicaid Services (CMS) as Level 1 of the Health Care Procedure Coding System.

Types of codes

There are three types of CPT codes: Category I, Category II, and Category III.

Category I:

Category I CPT Code(s). There are six main sections:

• Codes for Evaluation and Management: 99201-99499
• Codes for Anesthesia: 00100-01999; 99100-99150
• Codes for Surgery: 10021-69990
• Codes for Radiology: 70010-79999
• Codes for Pathology & Laboratory: 80047-89398
• Codes for Medicine: 90281-99199; 99500-99607

Category II:

Category II CPT Code(s) – Performance Measurement (optional) (Category II codes: 0001F-7025F)

Category III:

Category III CPT Code(s) – Emerging Technology (Category III codes: 0016T-0207T)

Examples of CPT Codes:

•     99214 may be used for a physical
•     90658 indicates a flu shot
•     90716 may be used for chicken pox vaccine (varicella)
•     12002 may be used to stitch up a one-inch cut on a patient's arm

If you use Medicare, you'll see CPT codes, but used a bit differently. Medicare uses HCPCS codes (Healthcare Common Procedure Coding System.)

Matching CPT Codes to the Services They Represent

As patients, our interest in these codes is usually related to our doctors' and insurance billings. Until recently it was difficult to find out what certain CPT codes meant without contacting your insurance company or doctor's office.

You won't find a freely-available comprehensive list of CPT codes, because the AMA controls their publication. Groups that have tried to make them available for free to the public have been cited for violations, fined by the AMA and have been forced to remove them from the Internet. Since the AMA developed and copyrights the system, it has a right to make sure access to these lists is paid for. It licenses CPT code lists to groups who wish to publish the codes to make them available to others. Those groups then charge a fee for access, too.

We patients don't have the large sums of money needed to subscribe to websites or purchase publications that list CPT codes. To make them more accessible to us, the AMA does provide on its website a means for looking up the individual CPT codes you might find on your doctor's bills or EOBs (estimates of benefits).

Medical Coding

What is Medical Coding?

Medical classification, or medical coding, is the process of transforming descriptions of medical diagnoses and procedures into universal medical code numbers. The diagnoses and procedures are usually taken from a variety of sources within the health care record, such as the transcription of the physician's notes, laboratory results, radiologic results, and other sources.

Diagnosis codes are used to track diseases and other health conditions, whether they are chronic diseases such as diabetes mellitus and heart disease, to contagious diseases such as norovirus, the flu, and athlete's foot. These diagnosis and procedure codes are used by government health programs, private health insurance companies, workers' compensation carriers and others.

Medical classification systems are used for a variety of applications in medicine, public health and medical informatics, including:

• statistical analysis of diseases and therapeutic actions
• reimbursement; e.g., based on diagnosis-related groups
• knowledge-based and decision support systems
• direct surveillance of epidemic or pandemic outbreaks

What does a Medical Coder do?

Medical coding professionals provide a key step in the medical billing process. Every time a patient receives professional health care in a physician’s office, hospital outpatient facility or ambulatory surgical center (ASC), the provider must document the services provided. The Coder will abstract the information from the documentation, assign the appropriate codes, and create a claim to be paid, whether by a commercial payer, the patient, or CMS.

A medical billing coder analyzes patient charts and assigns the appropriate medical diagnosis codes and CPT medical billing codes. These codes are derived from ICD-9 codes and corresponding CPT treatment codes and any related CPT modifiers. Some medical billing and coding specialists obtain some type of certification from a recognized professional organization. In general the more certifications the greater the income potential. Proper coding is very important to getting fairly reimbursed.

Good coding complements the billing process and insures the provider is getting fairly compensated. Even if you want to stick strictly to medical billing, having a basic understanding of what the medical coding specialist does is important. If you are a biller, the more you can learn about coding, the more valuable you are to a practice or billing company. Most small practices don't have dedicated coders or billers - they multi-task and may perform limited coding functions in addition to billing.

The medical billing specialist really needs to know enough about coding to see when the CPT medical billing coding are not compatible with the ICD 9 codes. For smaller practices the provider may do their own coding and the medical billing specialist acts more to identify out of date codes so the provider can correct them. Most practices use a lot of the same CPT and ICD-9 codes so once you become familiar with the codes and medical billing modifiers, you've conquered the most difficult part. The most commonly used ones may be listed on the practice superbill.

For family or internal medicine practices, you may see a wider variety of codes and modifiers than for specialty providers. My medical billing company serves smaller practices that may need coding services, so we offer medical coding services to complement our billing services. Many medical billers prefer to stay strictly with medical billing services and that's great. But if you can become proficient in coding - even if you are not an expert - you're much more valuable to a provider.