Current Procedural Terminology (CPT) codes is a Medical Billing Coding set maintained by the editorial panel of the American Medical Association (AMA). The CPT Procedural Coding set is used for standard documentation of medical, surgical and diagnostic services among physicians, patients, coders, accreditation organizations, insurance payers and medical data analysts.
CPT Procedural Coding Basics
CPT Procedural Coding is used by Medicare, Medicaid and most commercial insurance companies to identify and classify claims for payment. Although its use is standard in physicians' practices, CPT is not recognized in some facility settings or under special guidelines within an insurance company. Physicians and Healthcare Practices use CPT Coding to:
  • Submit claims for services and procedures
  • Track utilization of services and procedures
  • Measure physician productivity
Medical Biller, Medical Coder or Medical Billing Specialist are expected to adhere to ethical standards when involved in all aspects of coding. Again, as with diagnostic coding, the Medical Coder should consult the attending healthcare provider for clarification when a question arises. Medical Coder, because of their involvement in both clinical and administrative aspects of the health care setting, are key persons in converting the verbal and written reasons for an encounter into the universally accepted numeric and alphanumeric codes of CPT.

As with ICD Diagnostic Coding, accurate use of the CPT codes is essential for a Medical Biller. Medical Billing Specialist facilitates the accurate medical record keeping and the efficient processing of claims reimbursement by using the CPT Codes, which identifies appropriate procedures and services performed by the physician office. CPT-4 Codes are used in the claims submission process to receive reimbursement from payers as well as to track physician productivity. CPT4 codes must be maintained, following the changes in guidelines and regulations.

Evolution of CPT Coding

Current Procedural Terminology was first published in 1966 by the American Medical Association. It was based on the California Relative Value Study, developed by the California Medical Society. Its primary purpose was to simplify the reporting of procedures and/or services provided by physicians.

In 1992 the most significant change was made to CPT Coding with the replacement of the office and hospital visit codes with the Evaluation and Management (E&M) codes, identifying key elements to be documented in the medical record. CPT has been revised three times; the edition in current use is CPT-4.

Updates to the CPT

CPT is updated every October by the AMA and published for the next calendar year. The CPT Codes are available as a printed manual or as an electronic file. As with the ICD-9CM, it is ideal to purchase the printed version to be certain you have the entire contents for CPT Codes Reference.

Because, medical practice is constantly changing and new procedures are being developed, the AMA encourages suggestions from physicians, medical societies, and organizations. Forms are available from the AMA CPT Editorial Research and Development Department and on the AMA website. These changes are found in Appendix B of the CPT manual.

Format of the CPT Codes

There are three levels of CPT:

Level I CPT Codes codes are developed by the AMA and contained in the current CPT Manual. They are
five-digit codes and two-digit modifiers.

Level II CPT Codes codes, known as HCPCS, are national codes developed by CMS to describe medical services and supplies not covered in the CPT. They consist of alphabetic characters (A through V) and four digits. Modifiers are either alphanumerical or two letters (AA to VP).

Level III CPT Codes codes are local codes. Unlike Level I and II, these codes are not common to all carriers. They are assigned by local Medicare carriers to describe new procedures that are not yet in Levels I and II. These codes start with a letter (W through Z) followed by four digits.
Note: when the HIPAA Standards for Electronic Transactions are fully implemented, Level III CPT Codes will no longer be recognized for reimbursement reporting.
Following are the sections of CPT Codes:

Evaluation and Management (E&M)

The E&M section appears in the front of the CPT Manual and must be thoroughly understood. There is the most room for error when coding in this section. Since all specialties bill these services and these codes constitute 65% of the total Medicare part B payments to physicians, it is extremely important to understand this section. A full section devoted to understanding E&M coding appears later in this chapter.

Anesthesia Codes

This section contains anesthesia and modifier codes plus the very specific physical status modifiers developed by the American Society of Anesthesiologists to rank patients by level of complexity. The modifiers range from PI (normal healthy) through P6 (brain dead) patients whose organs are being removed for transplantation. There are also add-on codes (+) that explain difficult circumstances. These are located in the Anesthesia Guidelines found at the beginning of the section and also in the medicine section of the CPTA.


The surgery section is further divided into 18 subsections by specific type of surgery. General guidelines are found at the beginning of the section and apply to all subsections. The subsections have specific guidelines that apply to that particular area. The subsections are further divided into subheadings. One of the most important explanations in the general guidelines is the definition of the surgical package; it is essential to know exactly what is and is not included in the package. All surgeries have global periods. These range from 0 (the actual calendar day of the procedure) up to 90 days (starting the day before the surgery and continues for 90 days). These global periods cover normal "routine" care during that time. Complications, new problems, or other injuries are reported using modifiers.


In addition to radiology (x-ray diagnostic procedures), this section includes nuclear medicine and diagnostic ultrasound. This section requires a written report from the radiologist to the physician that ordered the test.

Pathology and Laboratory CPT Codes

Pathology and Laboratory codes in the pathology and laboratory section cover laboratory tests and services of pathologists. It is important to understand that some tests are grouped into panels. These panels give a clearer picture of problems with an organ or disease.

Medicine CPT Codes

The medicine section covers a multitude of services provided to patients ranging from immunization through testing that is not included in other sections to services provided by a psychiatrist or a physical therapist, and osteopathic manipulation to home healthcare.

CPT Procedure Codes Look up

Attempting to code services without a working knowledge of the guidelines can lead to improper coding and possibly loss of revenue. Thus, a Medical Coder needs to carefully read and understand these guidelines. Each section is unique and has very specific requirements.

Guidelines at the beginning of each section of the CPT manual refer to the whole section. Guidelines specific to the subsections are listed as Notes at the beginning of the subsection. Below is the explanation of CPT classifications of Sections for an easy CPT Procedure Codes Look up:

Section is highest level grouping of codes e.g Surgery, Laboratory, Radiology.
SubSection better defines the Section.
SuHeading further defines the SubSection.
Category directs you to the specific CPT Procedures in which you will find the right code to use.

Steps in CPT Coding

The following is a brief outline of the considerations a Medical Coder is required to use in CPT coding:
  1. Know the CPT code book; there are changes each year, so even if you have been coding for years, you need to read the introduction, guidelines, and notes.

  2. Review all services and procedures performed on the day of the encounter. Include all medications administered and trays and equipment used.

  3. Find the procedures and/or services in the index in the back of the CPT book. This will direct you to a code (not a page number!). The code you are looking for may be listed as a procedure, body system, service, or abbreviation (this will usually refer you to the full spelling).

  4. Read the description in the code and also any related descriptions that follow a semicolon; this will lead you to the most accurate code.

  5. If the service is an E&M Code, identify and perform the following:
    • Whether this is a new or established patient.
    • Whether this is a consultation.
    • Where the service was performed.
    • Review the documentation to determine the level of service.
    • Check to determine whether there is a reason to use a modifier.
    • Assign the five-digit CPT code.

Medical Billing and Coding Vocabulary

Bundled Codes - Procedures or services that are grouped together and paid as one.
Unbundled codes - Separating the components of a procedure and reporting them separately.
Component - A constituent part; a part of a larger group.
Upcoding - A deliberate increase in a CPT code to receive higher reimbursements.
Downcoding - A change in code done by the insurance company that receives a claim resulting in a lesser reimbursement. The change will usually be the code closest to the one submitted on the claim, because the code does not match in some way to the specifications of the insurance company.
Modifiers - Code additions that explain circumstances that alter a service that has been provided and clarify exactly what was done to the patient.
Morbidity - The relative incidence of disease.
Mortality - The number of deaths in a given time or place.
Revenue - The total income produced by a given source.
Utilization - Related to the process of reviewing procedures and services for medical necessity.

CPT Coding Assignment for Medical Billers

By the time you reach here, reading this article, we expect you have established a good basic understanding on CPT coding. Below is an assignment for Medical Billing beginners to further their knowledge:
  • Define and Spell the Terms listed in the Vocabulary above.
  • Identify Three purposes of the CPT.
  • List the Classifications of Sections in the CPT.
  • Explain the use of Guidelines and where they are located.
  • Discuss the Importance of Modifiers.
  • Briefly explain the importance of correctly assigning E&M codes.
  • Define up-coding and explain why it must be avoided.
  • Accurately assign a CPT code based on medical documentation.

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