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5Procedural Coding:

CPT and HCPCS

Learning Outcomes

When you finish this chapter, you will be able to:5.1 Explain the CPT code set.

5.2 Describe the organization of CPT.

5.3 Summarize the use of format and symbols in CPT.

5.4 Assign modifiers to CPT codes.

5.5 Apply the six steps for selecting CPT procedure codes to patient scenarios.

5.6 Explain how the key components are used in selecting CPT Evaluation and Management codes.

5-2

Learning Outcomes (continued)

When you finish this chapter, you will be able to:5.7 Explain the physical status modifiers and add-on

codes used in the Anesthesia section of CPT Category I codes.

5.8 Differentiate between surgical packages and separate procedures in the Surgery section of CPT Category I codes.

5.9 State the purpose of the Radiology section of CPT Category I codes.

5.10 Code for laboratory panels in the Pathology and Laboratory section of CPT Category I codes.

5-3

Learning Outcomes (continued)

When you finish this chapter, you will be able to:5.11 Code for immunizations using Medicine section

CPT Category I codes.

5.12 Contrast Category II and Category III codes.

5.13 Discuss the purpose of the HCPCS code set and its modifiers.

5-4

Key Terms

• add-on code

• bundling

• Category I codes

• Category II codes

• Category III codes

• consultation

• Current Procedural Terminology (CPT)

• durable medical equipment (DME)

• E/M codes (evaluation and management codes)

• fragmented billing

5-5

• global period

• global surgery rule

• Healthcare Common Procedure Coding System (HCPCS)

• key component

• Level II

• Level II modifiers

• modifier

• never event

• outpatient

Key Terms (continued)

• panel

• physical status modifier

• primary procedure• professional component

(PC)• resequenced

5-6

• section guidelines• separate procedure• special report• surgical package• technical component

(TC)• unbundling

• unlisted procedure

5.1 Current Procedural Terminology,Fourth Edition (CPT)

5-7

• Procedure codes for physicians’ and other healthcare providers’ services are selected from the Current Procedural Terminology code set

• Category I codes—five-digit procedure codes found in the main body of CPT– Each code has a descriptor—a brief explanation of

the procedure

• Category II codes—optional CPT codes that track performance measures

• Category III codes—temporary codes for emerging technology, services, and procedures

5.2 Organization 5-8

• CPT contains the main text, which has six sections of Category I codes:– Evaluation and Management– Anesthesia– Surgery– Radiology– Pathology and Laboratory– Medicine

• Category II and Category III codes have 14 appendixes and an index

5.2 Organization (continued) 5-9

• Section guidelines—usage notes at the beginnings of CPT sections

• Unlisted procedure—service not listed in CPT• Special report—note explaining the reasons for

a new, variable, or unlisted procedure or service

5.3 Format and Symbols 5-10

• CPT uses a semicolon and indentions when a common part of a main entry applies to entries that follow

• Some codes and descriptors are followed by indented see or use entries in parentheses, which refer the coder to other codes

• Descriptors often contain clarifying examples in parentheses, sometimes with the abbreviation e.g.

5.3 Format and Symbols (continued) 5-11

• Symbols used in CPT:● (a bullet or black circle) indicates a new procedure

code

▲ (a triangle) indicates the code’s descriptor has changed

►◄ (facing triangles) enclose new or revised text other than the code’s descriptor

5.3 Format and Symbols (continued) 5-12

• Symbols used in CPT (continued): (a bullet in a circle) next to a code means conscious

sedation is a part of the procedure the surgeon performs

(a lightning bolt) is used for codes for vaccines that are pending FDA approval

# (a number sign) indicates a resequenced code

• Resequenced—CPT procedure codes reassigned to another sequence

5.3 Format and Symbols (continued) 5-13

• + (a plus sign) before a code indicates an add-on code used only along with other codes for primary procedures

• Add-on code—procedure performed and reported in addition to a primary procedure

• Primary procedure—most resource-intensive CPT procedure during an encounter

• Secondary procedure—additional procedure performed

• Conscious sedation—moderate, drug-induced depression of consciousness

5.4 CPT Modifiers 5-14

• A CPT modifier is a two-digit number that may be attached to most five-digit procedure codes– Modifiers communicate special circumstances

involved with procedures

• A procedure has two parts:1.Technical component (TC)—reflects the technician’s

work and the equipment and supplies used

2.Professional component (PC)—represents a physician’s skill, time, and expertise used

5.5 Coding Steps 5-15

• The six general steps for selecting correct CPT procedure codes:

Step 1. Review complete medical documentation

Step 2. Abstract the medical procedures from the visit documentation

Step 3. Identify the main term for each procedure

Step 4. Locate the main terms in the CPT index

Step 5. Verify the code in the CPT main text

Step 6. Determine the need for modifiers

5.6 Evaluation and Management Codes 5-16

• E/M codes (evaluation and management codes)—cover physicians’ services performed to determine the optimum course for patient care

• Key component—factor documented for various levels of evaluation and management services

• Key components for selecting E/M codes:– The extent of the history documented– The extent of the examination documented– The complexity of the medical decision-making

5.6 Evaluation and Management Codes(continued)

5-17

• Consultation—service in which a physician advises a requesting physician about a patient’s condition and care

• Outpatient—patient who receives healthcare in a hospital setting without admission

5.7 Anesthesia Codes 5-18

• The codes in the Anesthesia section are used to report anesthesia services performed or supervised by a physician

• Two types of modifiers used with anesthesia codes:1. Modifier that describes patient’s health status

2. Standard modifiers

• Physical status modifier—code used with procedure codes to indicate a patient’s health status

5.7 Anesthesia Codes (continued) 5-19

• Patient’s physical status is selected from this list:– P1: Normal, healthy patient– P2: Patient with mild systemic disease– P3: Patient with severe systemic disease– P4: Patient with severe systemic disease that is a

constant threat to life– P5: Moribund patient who is not expected to survive

without the operation– P6: Declared brain-dead patient whose organs are

being removed for donation purposes

5.8 Surgery Codes 5-20

• Codes in the Surgery section are used for surgical procedures performed by physicians

• Surgical package (or global surgery rule)– combination of services included in a single procedure code– Global period—days surrounding a surgical

procedure when all services relating to the procedure are considered part of the surgical package

– Separate procedure—descriptor used for a procedure that is usually part of a surgical package but may also be performed separately

5.8 Surgery Codes (continued) 5-21

• Reporting surgical codes:– Bundling—using a single payment for two or more

related procedure codes– Unbundling—incorrect billing practice of breaking a

panel or package of services/procedures into component parts

– Fragmented billing—incorrect billing practice in which procedures are unbundled and separately reported

5.9 Radiology Codes 5-22

• The Radiology section of CPT contains codes reported for radiology procedures either performed by or supervised by a physician

• Radiology codes follow the same types of guidelines as noted in the Surgery section– Contain a technical component and a professional

component

5.10 Pathology and Laboratory Codes 5-23

• Cover services provided by physicians or by technicians under the supervision of physicians

• Panel—single code grouping laboratory tests frequently done together– To report a panel code, all the indicated tests must

have been done, and any additional test is coded separately

5.11 Medicine Codes 5-24

• Codes for the many types of evaluative, therapeutic, and diagnostic procedures performed by physicians– Immunizations require two codes from the Medicine

section, one for administering the immunization and the other for the particular vaccine or toxoid that is given

• Ancillary services—services used to support a diagnosis

5.12 Category II and Category III Codes 5-25

• Category II and Category III codes both have five characters—four numbers and a letter– Category II codes are for tracking performance

measures to improve patients’ health– Category III codes are temporary codes for new

procedures that may enter the Category I code set if they become widely used in the future

5.13 Overview of HCPCS 5-26

• The Healthcare Common Procedure Coding System (HCPCS) was set up to give healthcare providers a coding system that describes specific products, supplies, and services that patients receive

• HCPCS is technically made up of two sections of procedural codes:1. Level I, the CPT

2. HCPCS Level II Codes—national codes that identify supplies, products, and services not in Level I

Level II Codes 5-27

• Level II codes are five characters, beginning with a letter and followed by four numbers

• Durable medical equipment (DME)—reusable physical supplies ordered by the provider for home use– Can withstand repeated use– Primarily and customarily used for a medical purpose– Generally not useful to a person in the absence of an

illness or injury– Appropriate for use in the home

Permanent Versus Temporary Codes 5-28

• CMS HCPCS Workgroup: government committee that maintains the Level II HCPCS code set– Maintains the permanent national codes—HCPCS

Level II codes– Temporary national codes—HCPCS Level II codes

available for use but not part of the standard code set; may become permanent codes

HCPCS Updates 5-29

• Annual updates to HCPCS codes are released on the CMS HCPCS website, effective for use January 1 of each year– Interim updates for temporary codes are also found

on the CMS HCPCS website

• Annual HCPCS code books are published as a code reference

HCPCS Coding Procedures 5-30

• Correct HCPCS coding follows the same general guidelines as ICD-9-CM and CPT coding:– Begin by locating the item to be coded in the index (or

the Table of Drugs)– Then verify the probable code in the main sections– Assign appropriate modifiers

• Level II modifiers—HCPCS national code set modifiers– Provide additional information about services,

supplies, and procedures

Coding Steps 5-31

• Look up name of supply or item in index• Verify the code in the HCPCS Level II code book• Check symbols to indicate change in code• Review description of quantity• Note method of distribution and dosage for

prescription medication• Use modifier for additional information• Attach modifier for never event if reporting a

physician error such as procedure on wrong body part

HCPCS Billing Procedures 5-32

• Some procedures will need CPT and HCPCS codes

• In addition to printed material, Medicare resources are available online

Summary

Summary

Summary

Summary

Summary