A Detailed Look at Procedure Coding—Current Procedural Terminology, HCPCS and ICD

A Detailed Look at Procedure Coding—Current Procedural Terminology, HCPCS and ICD

Norman A. Cohen MD

The dominant procedure coding system to report physician services, including anesthesia care, is the American Medical Association (AMA) Current Procedural Terminology, Fourth Edition (CPT-4).1 (Current Procedural Terminology © 2006 American Medical Association.® All Rights Reserved. Applies to all CPT code references in this chapter). Other procedural coding systems include the Healthcare Common Procedure Coding System (HCPCS), ICD-9-CM (Volume 3), and the soon to be implemented ICD-10 PCS.


First released in 1966, the American Medical Association has annually updated and published Current Procedural Terminology (CPT), now in its fourth edition. As mentioned in previous chapters, CPT is a systematic listing of procedural services performed by physicians and other health care workers, organized into distinct categories such as evaluation and management, anesthesia, surgery, and radiology. CPT includes three “categories” of codes, designated by roman numerals I through III. Category I codes describe commonly performed and medically accepted procedures and services. Technology encompassed within the procedure must have already received U.S. Food and Drug Administration (FDA) approval and be in widespread use across different types of practice settings. Category II codes are supplemental tracking codes used for performance measures, which are becoming increasingly important as “pay for performance” initiatives gain traction. These tracking code numbers are currently four digits followed by the letter “F.” Category III codes represent emerging technology and help facilitate data collection about the medical efficacy of new and perhaps experimental services. Category III codes are temporary and automatically “sunset” after 5 years, unless interested parties submit a request for renewal. These codes have four digits followed by the letter “T.”

Originally, CPT had a distinct surgical focus. In those simpler times, only four digits were necessary to identify all the services described. In 1970, the AMA expanded CPT to include diagnostic and therapeutic procedures across specialties and simultaneously expanded the code range to five digits to accommodate the significantly increased number of services listed.

The 1980s saw the U.S. government adopt CPT for reporting Medicare Part B (physician) services, Medicaid services, and outpatient surgical procedures. CPT also became the dominant method to report physician services to private payers. The passage of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) cemented CPT’s dominance, as the government selected it as the required system for reporting physician services electronically.

All decisions regarding code selection for CPT rests with its Editorial Panel. The AMA Board of Trustees receives nominations from organized medicine and the health care industry, both public and private, for physician representation on the Panel. The Board of Trustees is solely responsible for the selection of all Panel members. In addition to 11 AMA-nominated members, the Blue Cross/Blue Shield Association, the Health Insurance Association of America (HIAA), the American Hospital Association (AHA), and the Centers for Medicare and Medicaid Services (CMS) each nominate one physician representative. The Health Care Professionals Advisory Committee (HCPAC), representing the interests of allied health professionals, nominates two nonphysician health professionals to the Panel. Of the 11 AMA-nominated seats, seven are termed “regular” and four are “rotating.” Those with regular seats may serve up to two 4-year terms, while rotating seats are limited to a single 4-year term. The Panel also has an executive committee consisting of a chairman, vice-chairman, and three elected members of the Panel, one of whom represents the private-payer community.

The CPT Advisory Committee advises the Editorial Panel on all code submissions brought forward for consideration. Each of the 107 specialty societies and military service groups with membership in the AMA House of Delegates has a designated representative to the Advisory Committee. The advisors are responsible for reviewing every code submission and offering comments on whether the code and its descriptor meet criteria for acceptance into CPT. Although the CPT process is open, meaning that anyone can submit a code proposal (with medical specialty societies and industry representatives being the most common participants), the Editorial Panel will only consider a code if at least one advisor has indicated support for the proposal. In addition to reviewing code proposals, advisors also assist in the refinement of CPT, prepare technical educational materials, and promote CPT to their specialty organizations and physicians in general.

The CPT Panel meets three times a year. Any new or substantially revised Category I code approved by the CPT Panel is sent to the joint
AMA-Specialty Society Relative Value System Update Committee (RUC) for establishment of work, practice expense, and liability relative value units. We will discuss the role of the RUC in more detail elsewhere. After the RUC achieves consensus on valuation, the codes and values are submitted to CMS for inclusion in the Resource Based Relative Value System (RBRVS). CMS maintains the RBRVS and updates it annually.

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Jul 1, 2016 | Posted by in ANESTHESIA | Comments Off on A Detailed Look at Procedure Coding—Current Procedural Terminology, HCPCS and ICD

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