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Introduction to Billing Code Systems

Accurate coding is essential for claims submitted to third party payers.  The codes identify:

  • procedures performed
  • diagnosis or diagnoses
  • certain devices, supplies and equipment acquired for the client

The  health care services coding system [PDF] is regulated by the Centers of Medicare and Medicaid Services (CMS). CMS established recognized code sets under the Health Insurance Portability and Accountability Act (HIPAA):

CPT (Current Procedural Terminology)
The CPT coding system describes how to report procedures or services. The CPT system is maintained and copyrighted by the  American Medical Association. Each CPT code has five digits. The AMA CPT Editorial Panel reviews and responds to requests for additions to or revisions of the CPT.

HCPCS (Healthcare Common Procedures Coding System)
HCPCS codes are used to report supplies, equipment, and devices provided to patients. A limited number of procedures not otherwise contained in the CPT system are also found here. HCPCS is alphanumeric and is administered by the  Centers for Medicare and Medicaid Services (CMS) in cooperation with other third party payers.

CMS includes two levels in its Healthcare Common Procedures Coding System:
HCPCS Level I is the CPT coding system; HCPCS Level II is usually referred to as HCPCS codes, described above.

ICD-9-CM (International Classification of Diseases, 9th revision, Clinical Modification)
Healthcare professionals use these codes (which have 3 numeric digits followed by decimal point) to report diagnoses and disorders. The ICD-9-CM is maintained by the National Center for Health Statistics of the U.S. Public Health Service. The  ICD-10-CM is in revised draft stage and is scheduled to replace ICD-9-CM on October 1, 2015.

Note that ICD-9-CM V codes are used to record a condition influencing health status or broad types of procedural, administrative or screening encounters. They are often not accepted for billing purposes by third party payers.

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