CPT Codes: What They Are and Uses

Current Procedural Terminology (CPT) codes are numbers assigned to each task and service that you can get from a healthcare provider. For example, a routine check-up or a lab test has a code attached to it.

CPT codes are used to track and bill medical, surgical, and diagnostic services. Insurers use CPT codes to determine how much money to pay providers.

The same CPT codes are used by all providers and payers to make the billing process consistent and to help reduce errors.

This article will go over what CPT codes are used for and what problems you might encounter related to CPT codes on your medical or insurance records.

What Are CPT Codes?

A CPT code is usually a five-digit numeric code. However, some CPT codes are four numbers and one letter. A CPT code has no decimal points.

Some CPT codes are only used occasionally and some are not really used at all. Other CPT codes are used frequently. For example, CPT codes 99213 and 99214 are for general check-ups and are some of the most commonly used CPT codes.

The American Medical Association (AMA) develops, maintains, and has copyrighted the CPT codes that are used today all over the world. These codes can change as healthcare changes, and new codes can be made and assigned to new services.

Current CPT codes can also be revised and old, unused codes can be thrown out. Thousands of CPT codes are used and updated every year.

Limitations of CPT Codes

While they are meant to help make the billing process in healthcare more uniform, the existence of CPT codes does not mean that everyone defines a healthcare service the same way.

CPT codes also do not ensure that different healthcare providers will get paid the same amount for the same service because payment is outlined in the contracts between providers and insurers.

For example, Healthcare Provider A may perform a physical check-up (99396) and be paid $100 by your insurance company. However, if you went to Healthcare Provider B, the payment for that same CPT code might only be $90.

CPT Code Categories

There are several categories of CPT codes:

• Category I: Procedures, services, devices, and drugs (including vaccines)
• Category II: Performance measures and quality of care (for example, patient follow-up)
• Category III: Services and procedures using emerging technology (these codes are usually temporary while the service or procedure is still fairly new)
• PLA codes: Used for lab testing

CPT Code Examples

Here are some examples of CPT codes:

• 99214 can be used for an office visit
• 99397 can be used for a preventive exam if you are over age 65
• 90658 can be used for the administration of a flu shot
• 90716 can be used for the administration of the chickenpox vaccine (varicella)
• 12002 can be used when a healthcare provider stitches up a 1-inch cut on your arm

How CPT Codes Are Used

CPT codes directly affect how much a patient will pay for the medical care they receive.

Provider offices, hospitals, and other medical facilities are strict about how CPT Coding is done. They hire professional medical coders or coding services to make sure that services are coded correctly.

Initial Coding

Your healthcare provider or their office staff will usually start the coding process.

If they use paper forms, they will list which CPT codes apply to your visit. If they use an electronic health record (EHR) during your visit, it will be noted in that system. These systems usually let staff call up codes based on the service name.

Verification and Submission

After you leave the office, medical coders and billers examine your records. They make sure the correct CPT codes are assigned.

Next, the billing department submits a list of your services to your insurer or payer. Most healthcare providers store and transfer this information digitally, but some are still done by mail or fax.

Claim Processing

Your health plan or payer uses CPT codes to process the claim. They will decide how much to pay your provider and how much you will owe for the services that you got.

Research

Health insurance companies and government officials use coding data to predict future health care costs for the patients in their systems.

State and federal government analysts use coding data to track trends in medical care. This information helps to plan and budget for Medicare and Medicaid.

Where You Will See CPT Codes

You'll see CPT codes in many different documents that you'll get as you move through the healthcare system.

Discharge Paperwork

When you are done with an appointment or are discharged from a healthcare facility, you will get some paperwork to take home with you. It usually includes a summary of the services you had, including the codes for those services.

The five-character codes are usually CPT codes. There are also other codes on that paperwork, like ICD codes (which may have numbers or letters, and usually decimal points.

Bills

When you get a medical bill, it will have a list of the services you received. Next to each service will be a five-digit code—usually, it's the CPT code.​

Explanation of Benefits

When you receive an explanation of benefits (EOB) from your payer, it will show how much of the cost of each service was paid on your behalf. Each service will be matched with a CPT code.

Matching CPT Codes to Services

If you're looking at your healthcare providers' and insurance billing process, you might want to know what all the codes mean.

However, CPT codes are copyrighted by the AMA and they charge a fee to use them. That means that you will not find a full list of CPT codes with explanations online for free.

That said, the AMA does provide consumers with a way to look up the CPT codes. Here's how to find out what a CPT code means:

• Do a CPT code search on the AMA website. You will have to register (for free). You are limited to five searches per day. You can search by a CPT code or use a keyword to see what the code for a service might be.
• Contact your healthcare provider's office and ask them to help you match the CPT codes and services.
• Contact your payer's billing department and ask them to help you with the CPT codes.

You can use the same steps to look up bundled codes.

Preventing Incorrect Coding

Understanding CPT codes can help you make sure that your hospital bill is correct and catch any billing errors—which do happen often. Some patient advocacy groups say that nearly 80% of bills for medical care contain minor errors.

These simple mistakes can have a big impact on your wallet. In fact, the wrong CPT code can mean that your insurance will not cover any of the costs.

Always review your bill carefully and compare it with your EOB to check for mistakes. It's not uncommon for healthcare providers or facilities to code for the wrong type of visit or service (typographical errors).

There are also fraudulent practices like "upcoding," which is when you are charged for a more expensive service than the one you got. On the other hand, "unbundling" is when bundled services or procedures are billed as separate charges.

If you come across something in your medical bill that doesn't add up, call your provider's office. It could be a simple mistake that the billing department can fix.

HCPCS Codes

CPT codes are similar to codes from the Healthcare Common Procedure Coding System (HCPCS). If you use Medicare, you'll see HCPCS codes in your paperwork instead of CPT codes.

HCPCS codes are used and maintained by the Centers for Medicare & Medicaid Services (CMS). They are used to bill Medicare, Medicaid, and many other third-party payers.

HCPCS level II codes start with a letter and have four numbers. They may also have extra modifiers—either two letters or a letter and a number. Examples of items billed with level II codes are medical equipment, supplies, and ambulance services.

HCPCS level II code lists can be found on the CMS website. Level I codes, however, are copyrighted by the AMA just like CPT codes.

Summary

CPT codes are combinations of letters and numbers that match up with healthcare services and supplies. The AMA developed CPT codes to make sure that all healthcare providers have a uniform system for reporting the services they give to patients.

When you visit a healthcare facility, your provider uses CPT codes to let your insurer or payer know which services you got from them. The insurer or payer then reimburses the provider based on the CPT codes. You can see the codes on your discharge paperwork, bills, and benefit statements.

It's a good idea to check the codes when you receive a bill or statement. Your provider or the coder can sometimes make errors and if they're not fixed, you could pay more than you should have to.

Being well-informed may help you get better medical care. When you see something you don't understand in your medical record or bill, discuss it with your healthcare provider or insurer. You have a right to take an active role in making sure your health care is properly tracked.