Current Procedural Terminology Codes: The Language of Healthcare Billing in America

Published: 10/27/2016 3:02:40 PM

Common Procedural Terminology Codes: The Language of Healthcare Billing in AmericaCurrent Procedural Terminology (CPT) codes are numerical representations of procedures, pharmacological interventions, lab tests and any other service provided by a doctor or other healthcare provider. They are the uniform communicators of medical billing and practice analysis. The codes are broken down into ranges not unlike the Dewey decimal system:

  • Evaluation & Management (99201-99499)
  • Anesthesiology (00100-01999, 99100-99140)
  • Surgery (10021-69990)
  • Radiology (70010-79999)
  • Pathology & Lab (80048-89356)
  • Medicine (90281-99199, 99500-99602)

The codes are painstakingly specific, and as a result, it is possible to tell a lot about a physician’s occupation activity from them. This becomes extraordinarily useful when disability insurers are addressing physicians’ claims; they want to know what the physician is doing before the onset of their disability, and after the onset of the disability (if they continue to work).

The methods for mining information from CPT codes varies according to the technological sophistication of the healthcare provider or facility. Factors that influence it include:

  • Is the billing process computerized or a manual process?
  • Is it performed in-house or outsourced to a billing service?
  • Does a hospital or third party bill for the physician?

In addition to these concerns, one issue to be aware of is whether or not the billings for the insured are being billed under another provider. This is usually not an issue with a sole practitioner, but may occur in a group practice or a practice which employs or contracts associate providers. If multiple providers are billed under one provider number, it is sometimes referred to as “incident to billing.” If this is the case, additional work needs to be performed in order to ensure that only the insured’s productivity and billings are being analyzed.

The ideal situation is to obtain the production data in electronic form from the practice computer. The data may include; date of service (DOS), CPT code, modifier, units, charges, adjustments, payments, referral source, place of service (POS), provider number, and responsible party.

Insurers ask us to do this detailed analysis of the billings to look at the specific types of different procedures that providers perform. We look at the number and frequency of the procedure; the charges and payments; and we build on them, analyzing a metric known as the relative value unit (RVU).

In our next blog, we will discuss the use of RVUs in physician productivity analysis and the hiring process of large hospital systems.

Nawrocki Smith LLP
290 Broad Hollow Road, Suite 115E
Melville, New York 11747

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