The cost of medical services in America remains a mystery to so many patients - becoming a major source of stress that leaves you asking “What will that cost me?” well after your appointment. Calculating medical bills - for patients, providers, and insurance companies - is a notoriously confusing process. Between copays, coinsurance, out-of-pocket maximums, annual deductibles, and more, there are a number of variables that make each bill different.
But one thing that’s constant (and just as confusing)? CPT codes.
Medical billing in America relies heavily on something called Current Procedural Terminology (CPT) - or CPT Code for short. So what is a CPT code? How does it impact my medical bill? Do I really even need to understand them?
What are CPT Codes?
Current procedural terminology (CPT) is a standardized set of codes, descriptions, and guidelines used to identify procedures and services performed by physicians and other health care providers. The CPT manual is updated annually by the American Medical Association (AMA) and pain management professional specialty societies contribute to CPT code development and maintenance. There are extensive service and procedure coding requirements published in the CPT manual. Providers are responsible for accurately reporting, documenting, and billing these codes for the services rendered.
CPT Codes, Categories, and Examples.
There are three categories of CPT codes. Category I CPT codes describe a procedure or service identified with a five-digit numeric CPT code and descriptor nomenclature; these are considered the “usual” CPT codes and are widely accepted by third party payors. Category II codes, five-digit codes with four numbers and ending with the letter “F”, are intended to facilitate data collection on positive health outcomes and quality patient care. Category III codes, five-digit codes with four numbers but ending with the letter “T”, facilitate data collection on and assessment of new services and procedures and are used to report procedures that do not have a Category I code.
How CPT Codes are Used
CPT codes are the standard method of medical billing, and they directly affect the amount that patients pay for their medical care.
Medical offices, hospitals and other medical facilities have strict requirements for coding procedures. They hire professional medical coders or coding services to ensure that services are coded correctly.
CPT codes are used for initial coding, verification and submission of claims, processing of claims and for research purposes.
So, where will I ever see a CPT Code?
You will see CPT Codes in many different documents such as:
- Discharge Paperwork
- EOB (Explanation of Benefits)
How CPT Codes Impact Your Medical Bill
There are several things that improper coding has an impact on.
Impact on the Provider
Improper billing practices can adversely affect a clinic's reimbursement rate. Unnecessary administrative time is expended because management level staff must handle the damage control. If the clinic's reimbursement rate falls, the clinic can be vulnerable to fraudulent billing practices.
Impact on the Patient
Incorrect medical coding and/or billing can give patients a poor experience and cause them to discuss their negative experiences with others.
CPT codes are alphanumeric that match up with healthcare services and supplies. Seeing redundant CPT codes can sometimes indicate that you have been double billed. It is a good idea to check your bills and statements for accuracy. If the codes are not corrected, you may be charged more than you should be for a service.
Rules in the ACA mandate that, generally speaking, preventive care should generally be 100% free - including no copay. That’s why it’s so important to check that your well woman’s exam, annual check-up, etc. are coded as preventive services - and not diagnostic.
Being knowledgeable about CPT codes can help you become a stronger health care consumer and helps you empower yourself with the requisite knowledge to understand your bill and fight back whenever you can.