1. Procedural Coding: CPT and HCPCS5
Procedural Coding: CPT and HCPCS

2. Learning Outcomes When you finish this chapter, you will be able to:
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When you finish this chapter, you will be able to:
5.1 Explain the CPT code set.
5.2 Describe the organization of CPT.
5.3 Summarize the use of format and symbols in CPT.
5.4 Assign modifiers to CPT codes.
5.5 Apply the six steps for selecting CPT procedure codes to patient scenarios.
5.6 Explain how the key components are used in selecting CPT Evaluation and Management codes.

3. Learning Outcomes (continued)
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When you finish this chapter, you will be able to:
5.7 Explain the physical status modifiers and add-on codes used in the Anesthesia section of CPT Category I codes.
5.8 Differentiate between surgical packages and separate procedures in the Surgery section of CPT Category I codes.
5.9 State the purpose of the Radiology section of CPT Category I codes.
Code for laboratory panels in the Pathology and Laboratory section of CPT Category I codes.

4. Learning Outcomes (continued)
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When you finish this chapter, you will be able to:
Code for immunizations using Medicine section CPT Category I codes.
Contrast Category II and Category III codes.
Discuss the purpose of the HCPCS code set and its modifiers.

5. Key Terms 5-5 add-on code bundling Category I codes Category II codes
Category III codes
consultation
Current Procedural Terminology (CPT)
durable medical equipment (DME)
E/M codes (evaluation and management codes)
fragmented billing
global period
global surgery rule
Healthcare Common Procedure Coding System (HCPCS)
key component
Level II
Level II modifiers
modifier
never event
outpatient
Teaching Notes:
Suggest to students that they review the key terms in this chapter prior to reading the chapter or hearing the lecture. This will enhance their understanding of the material.

6. Key Terms (continued) 5-6 panel physical status modifier
primary procedure
professional component (PC)
resequenced
section guidelines
separate procedure
special report
surgical package
technical component (TC)
unbundling
unlisted procedure

7. 5.1 Current Procedural Terminology, Fourth Edition (CPT)
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Procedure codes for physicians’ and other healthcare providers’ services are selected from the Current Procedural Terminology code set
Category I codes—five-digit procedure codes found in the main body of CPT
Each code has a descriptor—a brief explanation of the procedure
Category II codes—optional CPT codes that track performance measures
Category III codes—temporary codes for emerging technology, services, and procedures
Learning Outcome: 5.1 Explain the CPT code set.
Teaching Notes:
Examine and discuss Category I, II, and III codes on pages with students.
Ask students to provide examples of Category I, II, and III codes from their CPT books and describe how they are used.

8. 5.2 Organization
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CPT contains the main text, which has six sections of Category I codes:
Evaluation and Management
Anesthesia
Surgery
Radiology
Pathology and Laboratory
Medicine
Category II and Category III codes have 14 appendixes and an index
Learning Outcome: 5.2 Describe the organization of CPT.
Teaching Notes:
Ask students to examine the definition, structure, and key guidelines for the six sections of Category I codes found in Table 5.1.
Ask students to provide an example of each of the six sections listed under Category I codes.

9. 5.2 Organization (continued)
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Section guidelines—usage notes at the beginnings of CPT sections
Unlisted procedure—service not listed in CPT
Special report—note explaining the reasons for a new, variable, or unlisted procedure or service
Learning Outcome: 5.2 Describe the organization of CPT.
Teaching Notes:
Evaluate section guidelines with students and discuss how section guidelines help in identifying the appropriate code.
Note that unlisted procedures require that a special report be submitted in addition to the health claim form.
Ask students to provide an example of an unlisted procedure and how it can be submitted for reimbursement.

10. 5.3 Format and Symbols
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CPT uses a semicolon and indentions when a common part of a main entry applies to entries that follow
Some codes and descriptors are followed by indented see or use entries in parentheses, which refer the coder to other codes
Descriptors often contain clarifying examples in parentheses, sometimes with the abbreviation e.g.
Learning Outcome: 5.3 Summarize the use of format and symbols in CPT.
Teaching Notes:
Have students examine and discuss examples of see or use entries (use the example on page 152 as a reference).
Ask students how semicolons and descriptors can help locate and confirm the appropriate code.

11. 5.3 Format and Symbols (continued)
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Symbols used in CPT:
● (a bullet or black circle) indicates a new procedure code
▲ (a triangle) indicates the code’s descriptor has changed
►◄ (facing triangles) enclose new or revised text other than the code’s descriptor
Learning Outcome: 5.3 Summarize the use of format and symbols in CPT.
Teaching Notes:
 CPT symbols are found at the bottom of each page and in the introduction to the manual.

12. 5.3 Format and Symbols (continued)
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Symbols used in CPT (continued):
 (a bullet in a circle) next to a code means conscious sedation is a part of the procedure the surgeon performs
 (a lightning bolt) is used for codes for vaccines that are pending FDA approval
# (a number sign) indicates a resequenced code
Resequenced—CPT procedure codes reassigned to another sequence
Learning Outcome: 5.3 Summarize the use of format and symbols in CPT.
Teaching Notes:
Have students examine and discuss how symbols can be used when searching for a CPT code.
Ask students to locate resequenced codes in CPT and describe how they help to identify correct codes.

13. 5.3 Format and Symbols (continued)
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+ (a plus sign) before a code indicates an add-on code used only along with other codes for primary procedures
Add-on code—procedure performed and reported in addition to a primary procedure
Primary procedure—most resource-intensive CPT procedure during an encounter
Secondary procedure—additional procedure performed
Conscious sedation—moderate, drug-induced depression of consciousness
Learning Outcome: 5.3 Summarize the use of format and symbols in CPT.
Teaching Notes:
 Add-on codes are designated with a plus (+) sign next to the code and indicate a procedure carried out in addition to the primary procedure.
Add-on codes can only be secondary codes; they are never used as the primary procedure.
Define conscious sedation and ask students to provide an example of a procedure with corresponding code.

14. 5.4 CPT Modifiers
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A CPT modifier is a two-digit number that may be attached to most five-digit procedure codes
Modifiers communicate special circumstances involved with procedures
A procedure has two parts:
Technical component (TC)—reflects the technician’s work and the equipment and supplies used
Professional component (PC)—represents a physician’s skill, time, and expertise used
Learning Outcome: 5.4 Assign modifiers to CPT codes.
Teaching Notes:
 Some section guidelines also discuss the proper use of modifiers to be used with that section’s codes.
Ask students to identify and describe the difference between a TC and a PC.
Discuss the benefits of using modifiers and ask students to provide three examples.

15. 5.5 Coding Steps
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The six general steps for selecting correct CPT procedure codes:
Step 1. Review complete medical documentation
Step 2. Abstract the medical procedures from the visit documentation
Step 3. Identify the main term for each procedure
Step 4. Locate the main terms in the CPT index
Step 5. Verify the code in the CPT main text
Step 6. Determine the need for modifiers
Learning Outcome: 5.5 Apply the six steps for selecting CPT procedure codes to patient scenarios.
Teaching Notes:
 The steps in coding from CPT are similar to those for coding from ICD.
In step one, the documentation is reviewed to determine what procedures or services were performed and where the encounter took place.
In step two, a decision is made on which procedures/services can be billed.
In step three, the main term is identified; it can be the procedure, location, common abbreviation, symptom, or an eponym.
In step four, the main term is located in the alphabetic index.
In step five, the code or code range identified in step four is verified in the main text.
In step six, the guidelines should be checked for the use of a modifier and one or more are assigned if required.
The codes for each day’s services are listed on the claim n order of highest to lowest reimbursement.

16. 5.6 Evaluation and Management Codes
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E/M codes (evaluation and management codes)—cover physicians’ services performed to determine the optimum course for patient care
Key component—factor documented for various levels of evaluation and management services
Key components for selecting E/M codes:
The extent of the history documented
The extent of the examination documented
The complexity of the medical decision-making
Learning Outcome: 5.6 Explain how the key components are used in selecting CPT Evaluation and Management codes.
Teaching Notes:
 Examine the E/M categories and subcategories (Table 5.3) with students.
 Physicians often spend more time with a new patient than with an established patient. Therefore, the claim must stipulate whether the patient is new or established.
Emergency patients are not classified as new or established.
Next the place of service (POS) must be determined.
The E/M section is divided into code ranges based on the place of service.
When deciding on the level of service, the coder or physician must determine time, work, and decision making involved.
The history, examination, and medical decision making are key components to this process.
When the patient is new, all three components must be met; when the patient is established, two of the three must be met.

17. 5.6 Evaluation and Management Codes (continued)
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Consultation—service in which a physician advises a requesting physician about a patient’s condition and care
Outpatient—patient who receives healthcare in a hospital setting without admission
Learning Outcome: 5.6 Explain how the key components are used in selecting CPT Evaluation and Management codes.
Teaching Notes:
Ask students to discuss the need for consultations.
Discuss the differences between inpatient and outpatient services.
Optional Assignment:
Ask students to write a paragraph that provides an example of outpatient services.

18. 5.7 Anesthesia Codes
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The codes in the Anesthesia section are used to report anesthesia services performed or supervised by a physician
Two types of modifiers used with anesthesia codes:
Modifier that describes patient’s health status
Standard modifiers
Physical status modifier—code used with procedure codes to indicate a patient’s health status
Learning Outcome: 5.7 Explain the physical status modifiers and add-on codes used in the Anesthesia section of CPT Category I codes.
Teaching Notes:
Examine the complete usual services of an anesthesiologist with students.
Discuss the differences between usual preoperative visits for evaluation and planning, care during the procedures, and routine postoperative care.
Optional Assignment:
Ask students to write a paragraph that provides an example of a physical status modifier and how it is used.

19. 5.7 Anesthesia Codes (continued)
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Patient’s physical status is selected from this list:
P1: Normal, healthy patient
P2: Patient with mild systemic disease
P3: Patient with severe systemic disease
P4: Patient with severe systemic disease that is a constant threat to life
P5: Moribund patient who is not expected to survive without the operation
P6: Declared brain-dead patient whose organs are being removed for donation purposes
Learning Outcome: 5.7 Explain the physical status modifiers and add-on codes used in the Anesthesia section of CPT Category I codes.
Teaching Notes:
Examine and discuss each physical status modifier with students
(P1 - Normal, healthy patient; P2 - Patient with mild systemic disease; P3 - Patient with severe systemic disease; P4 - Patient with severe systemic disease that is a constant threat to life; P5 - Moribund patient who is not expected to survive without the operation; and P6 - Declared brain-dead patient whose organs are being removed for donation purposes).
Optional Assignment:
Ask students to write a paragraph that discusses how physical status modifiers impact reimbursement.

20. 5.8 Surgery Codes
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Codes in the Surgery section are used for surgical procedures performed by physicians
Surgical package (or global surgery rule)– combination of services included in a single procedure code
Global period—days surrounding a surgical procedure when all services relating to the procedure are considered part of the surgical package
Separate procedure—descriptor used for a procedure that is usually part of a surgical package but may also be performed separately
Learning Outcome: 5.8 Differentiate between surgical packages and separate procedures in the Surgery section of CPT Category I codes.
Teaching Notes:
Examine and discuss modifiers commonly used to indicate special circumstances involved with surgical procedures with students (see pages ).
Discuss the differences between the global period and separate procedures.
Ask students to identify a CPT code that is a separate procedure.

21. 5.8 Surgery Codes (continued)
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Reporting surgical codes:
Bundling—using a single payment for two or more related procedure codes
Unbundling—incorrect billing practice of breaking a panel or package of services/procedures into component parts
Fragmented billing—incorrect billing practice in which procedures are unbundled and separately reported
Learning Outcome: 5.8 Differentiate between surgical packages and separate procedures in the Surgery section of CPT Category I codes.
Teaching Notes:
Examine and discuss with students the reason(s) why unbundling and fragmented billing practices are incorrect.
Ask students to provide examples of bundled and unbundled services.
Optional Assignment:
Ask students to write a paragraph that explains why unbundling procedures will result in a denied or reduced-payment claim.

22. 5.9 Radiology Codes
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The Radiology section of CPT contains codes reported for radiology procedures either performed by or supervised by a physician
Radiology codes follow the same types of guidelines as noted in the Surgery section
Contain a technical component and a professional component
Learning Outcome: 5.9 State the purpose of the Radiology section of CPT Category I codes.
Teaching Notes:
Ask students to differentiate between technical and professional components for radiology codes.

23. 5.10 Pathology and Laboratory Codes
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Cover services provided by physicians or by technicians under the supervision of physicians
Panel—single code grouping laboratory tests frequently done together
To report a panel code, all the indicated tests must have been done, and any additional test is coded separately
Learning Outcome: 5.10 Code for laboratory panels in the Pathology and Laboratory section of CPT Category I codes.
Teaching Notes:
Ask students to provide an example of any panel procedure under the Pathology and Laboratory section.
Discuss why panel codes are more comprehensive than single lab procedures.
Each test in a panel has an individual code assigned to it; however, if all of the tests in the panel are performed, the code for the panel must be used, rather than reporting them separately.

24. 5.11 Medicine Codes
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Codes for the many types of evaluative, therapeutic, and diagnostic procedures performed by physicians
Immunizations require two codes from the Medicine section, one for administering the immunization and the other for the particular vaccine or toxoid that is given
Ancillary services—services used to support a diagnosis
Learning Outcome: 5.11 Code for immunizations using Medicine section CPT Category I codes.
Teaching Notes:
Examine and discuss commonly used modifier codes in the Medicine section with students (-22, -26, -32, -51, -52, -53, -55, -56, -57, -58, -59, -76, -77, -78, -79, -90, -91, and -99).
Ask students to define ancillary services and provide an example of how ancillary services can support a diagnosis.
Optional Assignment:
Ask students to write a paragraph that provides an example of how three of the following codes can be used: -22, -26, -32, -51, -52, -53, -55, -56, -57, -58, -59, -76, -77, -78, -79, -90, -91, or 99.

25. 5.12 Category II and Category III Codes
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Category II and Category III codes both have five characters—four numbers and a letter
Category II codes are for tracking performance measures to improve patients’ health
Category III codes are temporary codes for new procedures that may enter the Category I code set if they become widely used in the future
Learning Outcome: Contrast Category II and Category III codes.
Teaching Notes:
Category II codes help in the development of best practices and improve documentation.
Category II and III codes are listed at the end of the CPT, behind the category I codes.
Ask students to provide examples of Category II and Category III codes and discuss why temporary codes are important.

26. 5.13 Overview of HCPCS
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The Healthcare Common Procedure Coding System (HCPCS) was set up to give healthcare providers a coding system that describes specific products, supplies, and services that patients receive
HCPCS is technically made up of two sections of procedural codes:
Level I, the CPT
HCPCS Level II Codes—national codes that identify supplies, products, and services not in Level I
Learning Outcome: Discuss the purpose of the HCPCS code set and its modifiers.
Teaching Notes:
Ask students to provide examples of situations that would require the use of HCPCS codes.
Discuss how HCPCS provides a standardized coding system.

27. Level II Codes
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Level II codes are five characters, beginning with a letter and followed by four numbers
Durable medical equipment (DME)—reusable physical supplies ordered by the provider for home use
Can withstand repeated use
Primarily and customarily used for a medical purpose
Generally not useful to a person in the absence of an illness or injury
Appropriate for use in the home
Learning Outcome: Discuss the purpose of the HCPCS code set and its modifiers.
Teaching Notes:
Examine and discuss how DME can improve a patient’s quality of care.
Ask students to provide an example of reusable and of disposable DME.

28. Permanent Versus Temporary Codes
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CMS HCPCS Workgroup: government committee that maintains the Level II HCPCS code set
Maintains the permanent national codes—HCPCS Level II codes
Temporary national codes—HCPCS Level II codes available for use but not part of the standard code set; may become permanent codes
Learning Outcome: Discuss the purpose of the HCPCS code set and its modifiers.
Teaching Notes:
Examine and discuss the different types of temporary national codes with students
(C codes, G codes, Q codes, K codes, S codes, H codes, and T Codes).
Ask students to explain how temporary codes become permanent codes.

29. HCPCS Updates
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Annual updates to HCPCS codes are released on the CMS HCPCS website, effective for use January 1 of each year
Interim updates for temporary codes are also found on the CMS HCPCS website
Annual HCPCS code books are published as a code reference
Learning Outcome: Discuss the purpose of the HCPCS code set and its modifiers.
Teaching Notes:
Ask students to visit the CMS HCPCS website at and discuss the most current updates on HCPCS codes.
Discuss with students the importance of keeping up-to-date on HCPCS codes and describe strategies to remain up-to-date with HCPCS.

30. HCPCS Coding Procedures
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Correct HCPCS coding follows the same general guidelines as ICD-9-CM and CPT coding:
Begin by locating the item to be coded in the index (or the Table of Drugs)
Then verify the probable code in the main sections
Assign appropriate modifiers
Level II modifiers—HCPCS national code set modifiers
Provide additional information about services, supplies, and procedures
Learning Outcome: Discuss the purpose of the HCPCS code set and its modifiers.
Teaching Notes:
The five-character Level II codes may be numbers, letters, or a combination of the two.
HCPCS modifiers are either two letters or a letter and a number.
Examine and discuss how Level II modifiers help ensure accurate reimbursement.

31. Coding Steps Look up name of supply or item in index
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Look up name of supply or item in index
Verify the code in the HCPCS Level II code book
Check symbols to indicate change in code
Review description of quantity
Note method of distribution and dosage for prescription medication
Use modifier for additional information
Attach modifier for never event if reporting a physician error such as procedure on wrong body part
Learning Outcome: Discuss the purpose of the HCPCS code set and its modifiers.
Teaching Notes:
Ask students to provide an example of how a medical billing specialist can prevent each of the following documentation errors: 1) The correct procedure but on the wrong body part; 2) The correct procedure but on the wrong patient; and 3) The wrong procedure on the wrong patient.

32. HCPCS Billing Procedures
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Some procedures will need CPT and HCPCS codes
In addition to printed material, Medicare resources are available online
Learning Outcome: Discuss the purpose of the HCPCS code set and its modifiers.
Teaching Notes:
Ask students to provide an example of a procedure that requires both CPT and HCPCS codes.
Refer students to the CMS website at and discuss how this site can help them keep up-to-date with current events.
Optional Assignment:
Ask students to write a paragraph that describes three strategies to maintain the highest level of accuracy and quality in a medical practice.

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