This module is the first in a series of reimbursement-related topics. Current Procedural Terminology, or CPT, codes describe the services that are provided by health care professionals to third party payers. CPT codes are valued for reimbursement by the federal government's Medicare program.
Health care codes establish a universal language among those who provide the services, such as audiologists and speech-language pathologists, bill for the services, such as hospital coders, cover the services, such as employee health insurance plans, and pay for the services such as Medicare, Medicaid, Blue Cross Blue Shield, and Aetna. Medicare first required the use of diagnostic codes for diagnosis-related groups (DRGs) as part of the first prospective payment system in the early 1980s.
Codes standardize how we describe our procedures, diagnoses, prosthetic devices, and equipment. They consist of a number or a combination of numbers and letters to medical services.
One of the requirements of the Health Insurance Portability and Accountability Act of 1996, more commonly known as HIPAA, is to require specific codes sets for procedures, diagnoses, durable medical equipment, and prosthetic devices. HIPAA ensures that all health care electronic transactions use uniform code sets.
There are three major code sets used by health care professionals. They are the Current Procedural Terminology (or CPT), the Healthcare Common Procedure Coding System (or HCPCS, pronounced “Hick-picks”), and the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM). Note that the use of ICD-10-CM, the 10th revision of this classification system, will be required for everyone, including audiologists and speech-language pathologists, covered by HIPPA by October 1, 2015.
The CPT codes are actually the first level of HCPCS while Level II codes are established by the Centers for Medicare and Medicaid Services (CMS). Level II is used primarily to identify products, supplies, and services not included in the CPT codes, such as ambulance services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) when used outside a physician's office.
The American Medical Association first published the CPT codes in 1966 and have since provided an annual update of the codes. Although the CPT codes were first designed for physicians and surgeons, other qualified health care professionals were included in the process in the early 1990s. Now, other professionals such as audiologists, speech-language pathologists, psychologists, physical therapists, occupational therapists, optometrists, physician assistants, chiropractors, podiatrists, nurse practitioners, and nutritionists also use the codes.
CPT codes have five digits, such as 92507 or 92557, and each code represents a distinct procedure or service. CPT codes are used for billing, data analysis, and insurance coverage and payment. A CPT code cannot represent an experimental or investigational procedure and the procedure must be based on published U.S. research and be widely used. There must also be approval by the U.S. Food and Drug Administration if a device is part of the procedure.
Modifiers indicate a special use of a procedure. They are two-digit numbers that are appended to the five-digit code that explain something unusual about the service, although the protocol for the procedure did not change. The reason for these modifiers must be documented in the patient's chart.
Two examples of modifiers are -52 and -53. A -52 modifier indicates that the procedure performed was less than usually required. For example, this modifier would be used if the patient's tolerance for the procedure was low and the procedure was not completed. A -53 modifier means that the procedure was terminated because of a concern about the patient's safety or welfare.
Modifier -59 means that the procedure is not typically performed on the same day as a second procedure during a patient visit, but that it is appropriate to do so under the circumstances. A -76 modifier means that the procedure was performed more than once per date of service by the same provider.
There are three components used to establish the value of each procedure. The first is the professional component that reflects the time, expertise, difficulty and risk to the patient for the procedure. The second is the technical component that accounts for the time of the clinical staff, supplies and equipment. The last is malpractice. This considers the cost of malpractice insurance for the professional delivering the service.
A survey of professionals who perform the procedure is conducted to determine the value of the procedure. Survey participants are asked to compare the professional work (or time, expertise, level of difficulty, risk to patient) required to perform this procedure to the professional work of other previously-valued procedures. The result of the survey provides a recommended relative value unit or RVU. The value is presented to the AMA/Specialty Society RVS Update Committee better known as the RUC. The RUC considers the recommended value and its members compare it to procedures they believe are comparable. They may accept the recommended RVU or revise it to a level that they consider in keeping with the other values. The RUC then submits their final value recommendations to the Centers for Medicare and Medicaid Services (CMS).
When the recommended value goes to CMS, they can do a number of things—they can accept or reject it, modify it, accept the recommendation but not cover the service (for example, if it is a non-covered screening procedure), or bundle the procedure (CMS may believe the new procedure is actually part of another procedure in spite of the CPT Editorial Panel's decision).
Here are two examples of 2014 Medicare rates showing the work, practice expense, malpractice expense, and total RVUs. The first code, 92620, is one reported by audiologists for the first 60 minutes of a central auditory function evaluation. The second code, 96125, can be reported by speech-language pathologists for an hour of standardized cognitive performance testing. Note that the professional work RVUs for 92620 are 1.50, the practice expense RVUs are 1.08, and the malpractice RVUs are 0.07. These RVUs are totaled to reach 2.65 RVUs. This sum is multiplied by the CMS determined conversion factor of $35.82 for a national fee of $94.93. Similarly, you will see that the professional work RVUs for 96125 are 1.70, the practice expense RVUs are 1.43, and the malpractice RVUs are 0.07. These RVUs are totaled to reach 3.20 RVUs. This sum is multiplied by the same conversion factor for a national fee of $114.63.
Medicare has a remarkable influence on health care reimbursement. The reasons include the tremendous size of the Medicare budget, the resources invested by Medicare to determine what should be covered, and the extensive process by which payment level of services are determined. The old saying of, “Why reinvent the wheel?,” comes to mind. Why should another smaller entity undertake a process that the federal government invests so many resources in?
Health care professionals, other than MDs and DOs, have a representative voice in the CPT development and valuation process. A CPT Health Care Professionals Advisory Committee, or CPT HCPAC, meets annually to discuss contemporary procedure coding issues. They elect two CPT HCPAC members to sit on the CPT Editorial Advisory Committee. The RUC Health Care Professionals Advisory Committee, or RUC HCPAC, is the body that hears the survey presentations by organizations representing health care professionals other than MDs and DOs. The RUC HCPAC's recommendations go directly to the Centers for Medicare and Medicaid Services.
Here is a list of the professions that have seats on the HCPACs. The five professions that sit only on the CPT HCPAC are those that cannot bill Medicare as independent professionals but are able to bill other third party payers and can report CPT codes.
New CPT codes can be proposed by anyone although they are usually developed by health care specialty societies like ASHA. Proposals are reviewed by the CPT Editorial Panel. CPT advisors who are not on the Panel can review and submit their comments related to relevant proposals. An accepted CPT procedure is then referred to the AMA/Specialty Society RVS Update Committee (or RUC) to determine its relative value.
The first three requirements for new and revised regular CPT codes are:
The last two requirements are:
Every effort has been made to have a clear descriptor of each CPT code. Choose the descriptor that matches the procedure you just did. The rule of thumb is to have one code for one procedure and to choose only the one code that best corresponds to the procedure just performed. If there is no code for what you just did, for example, the Head Shake Test, use CPT code 92700 (otolaryngologic procedure, unspecified).
At this time please proceed to Module Two, which covers the International Classification of Diseases, 9th Revision, Clinical Modification, or ICD-9-CM.