You’ve probably used self-service checkout at the grocery store. You scan your items and their prices come up on the screen. Produce usually has a sticker on it with a code, and when it’s time to ring up the produce, you type in the code. For example, you don’t type in “broccoli,” you type in “4623,” and the computer knows to charge you for broccoli.
Similarly, claims payment systems don’t understand words; they understand digits. Claims systems also use codes to fetch the correct prices for services. They use CPT codes, to be precise. What is CPT? It’s the Common Procedural Technology (CPT) code*. CPT is a listing of standardized alphanumeric procedure codes, developed by the American Medical Association (AMA). These codes are used by medical coders to report services and to bill outpatient and office procedures.
CPT codes allow machines to understand detailed medical narratives. They provide a shorthand, so the claims payment system can understand the intricacies of a given medical visit for a patient.
For example, we use CPT codes to turn this:
Office or other outpatient visit for the evaluation and management of an established patient, which requires at least 2 of these 3 key components: An expanded problem focused history; An expanded problem focused examination; Medical decision making of low complexity. Counseling and coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the presenting problem(s) are of low to moderate severity. Typically, 15 minutes are spent face-to-face with the patient and/or family.
This codification also allows services with similar narratives to be distinguished from one another, which couldn’t be done using text. For example, CPT Codes 80305 and 80306 have nearly identical narratives (the difference is highlighted):
80305: Drug test(s), presumptive, any number of drug classes, any number of devices or procedures; capable of being read by direct optical observation only (eg, utilizing immunoassay [eg, dipsticks, cups, cards, or cartridges]), includes sample validation when performed, per date of service
80306: Drug test(s), presumptive, any number of drug classes, any number of devices or procedures; read by instrument assisted direct optical observation (eg, utilizing immunoassay [eg, dipsticks, cups, cards, or cartridges]), includes sample validation when performed, per date of service
Downstream, CPT codes serve a wide variety of purposes. They allow payers to report to stakeholders (regulators, customers, providers), to assess risk, to accurately predict medical trend, and other key financial and regulatory functions.
CPT codes are complicated, and they may seem like an unnecessary layer of administrative burden for your practice. However they’re important because they help ensure that your patients aren’t getting billed for brussels sprouts when they bought broccoli.
*CPT is a subset of HCPCS (HealthCare Common Procedure Coding System). HCPCS comprises four categories Level I (CPT codes, also called “CPT-4) ), Level II (non-physician services like ambulance, DME, and supplies); and Level III , a code set used mostly by state and federal agencies, and by localities.