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CHAPTER 8. INTRODUCTION TO THE CPT AND LEVEL II NATIONAL CODES (HCPCS). MEDICAL CODING. Transforms services/procedures/ supplies/drugs into CPT/HCPCS codes Transforms diagnosis and procedures into ICD-9-CM codes. Levels of Service Codes.

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Chapter 8



Medical coding


Transforms services/procedures/ supplies/drugs into CPT/HCPCS codes

Transforms diagnosis and procedures into ICD-9-CM codes

Levels of service codes

Levels of Service Codes

Level I CPT—(Category 1: 99201-99607, Category III: 0016T-0196t)

Level II HCPCS, National Codes—(A0021-V5364)

Level III Local Codes—phased out due to HIPAA

Diagnosis codes

Diagnosis Codes

ICD-9-CM, Volumes 1 & 2

International Classification of Diseases, 9th Ed., Clinical Modification

Icd 9 cm


Classification system

Explains why service was provided

Changes diagnoses into codes

Diabetes becomes 250.XX (highest level of specificity)

Why codes

Why Codes?

Computers understand numbers

Specific descriptions attached to each code

Chapter 8


Developed by the AMA in 1966

Five-digit codes

Updated in November for use January 1

Examples of types of cpt codes

Examples of Types of CPT Codes



Diagnostic services

Anesthesia, etc.

Category II and Category III codes—alpha numeric

Category II = performance measuring

Category III = emerging technology

Cpt codes allow for

CPT Codes Allow For

Communication that is both effectiveand efficient

A mechanism to report a service not described by a specific CPT or Level II code



Renal endoscopy through nephrostomy or pyelotomy, with or without irrigation, instillation, or ureteropyelography, exclusive of radiologic service; with endopyelotomy (includes cystoscopy, ureteroscopy, dilation of ureter and ureteral pelvic junction, and insertion of endopyelotomy stent)

OR 50575

Codes are

Codes Are

Used to tell third-party payers about services/procedures provided

Often used as basis of payment

Incorrect coding

Incorrect Coding

Results in providers being paid inappropriately

Either over or underpayment

Decreases cash flow

Liability risk

Codes are used by

Codes Are Used By



Rehabilitation units

Ambulance services

Long-term care

Wherever health care services are provided

Outpatient services for physicians

Outpatient Services for Physicians

Reported on insurance form

CMS-1500= universal form

Cms 1500


Figure: 8.1

Cpt format

CPT Format

Symbols in CPT

Used to convey information

Bullseye, moderate (conscious) sedation included (full list in Appendix G, CPT)

Example 45391, Colonoscopy with endoscopic ultrasound examination

Lightning bolt, pending FDA approval (Appendix K, CPT)

Example 90650, Human Papilloma virus (HPV) vaccine, types 16, 18, bivalent, 3 dose schedule, for intramuscular use

Bullet new code

• Bullet = New Code

Figure: 8.2

  • Circle (○) = Reinstated or recycled code

Figure: 8.6

Triangle revised code

▲Triangle = Revised Code

Figure: 8.3

Right and left triangles beginning and ending of text change

►◄ Right and Left Triangles = Beginning and Ending of Text Change

Figure: 8.4

Plus add on code

+ Plus = Add-On Code

Figure: 8.5

Add on code

Add-On Code


Can only be used with another specific code

Never used alone

No reduction for multiple services

Full list in Appendix Dof CPT

Chapter 8

CPT Appendix E contains a listing of - 51 exempt codes

Services typically exempt from multiple procedure reductions

= Circle With Line,-51 Cannot Be Used With these Codes

Figure: 8.7

Appendices of cpt

Appendices of CPT

Appendix A: Modifiers

Appendix B: Additions, Deletions, Revisions

Appendix C: Clinical Examples, E/M Codes

Appendix D: Add-OnCodes

Appendix E: -51 Exempt Codes

Appendix F: -63 Exempt Codes

Appendix G: Include Moderate (Conscious) Sedation

Appendices of cpt1

Appendices of CPT


Appendix H: Performance Measures, Category II Codes

Appendix I: Genetic Testing Modifiers

Appendix J: Electrodiagnostic Medicine Listing of Sensory, Motor, and Mixed Nerves

Appendix K: Product Pending FDA Approval

Appendix L: Vascular Families

Appendix M: Crosswalk to DeletedCPT Codes

Six cpt sections like chapters

Six CPT Sections (like chapters)

Evaluation & Management (E/M)




Pathology & Laboratory


Category II Codes

Category III Codes

Appendices A-M


Categorized by

Categorized By





Categorized by1

Categorized By



Knee or Shoulder


Incision or Excision


Fracture or Dislocation


Cast or Strap

Surgical Approach

Anterior Cranial Fossa or Middle Cranial Fossa

Categorized by example

Categorized By, Example

Figure: 8.9




Section-specific information begins each section

Figure: 8.10



Must-reading located throughout the CPT

Figure: 8.12

Two types of codes

Two Types of Codes

Stand-alone: Full description

Indented: Dependent on preceding stand-alone

Verbiage before the semicolon applies to all indented codes that follow

Types of codes example

Types of Codes, Example

Figure: 8.14



Indicates full description in preceding code

You must return to the stand-alone for full description

Modifiers add information

Modifiers Add Information

CPT Modifier

Two digits

62 Two surgeons performed a surgical procedure

Each surgeon applies his/her individual skill

Each surgeon bills the procedure with modifier -62

Level ii hcpcs modifiers

Level II HCPCS Modifiers

“-AS” Physician’s Assistant

“-F1” Left hand, second digit

Allmodifiers used on CPT or HCPCS

Example of modifier

Example of Modifier

43820 Gastrojejunostomy

-62 two surgeons

-43820-62 two surgeons performed a gastrojejunostomy

-62 modifier may be allowed based on payor Example: Medicare requires documentation of medical necessity

Modifier on the cms 1500

Modifier on the CMS-1500

Modifiers are placed in 24D on CMS-1500

Unlisted services

Unlisted Services

Codes ending in “99” = “no specific Category I or III code”

Used if no more specific code

Special reportmust accompany submission

Special or written report indicates

Special or Written Report Indicates:






Equipment Used

Photos and medical journal articles if relevant

Category i codes

Category I Codes

Category I codes (00100–99607)

Approved by AMA and Food and Drug Administration

Proven clinical effectiveness (efficacy)

Category ii codes supplemental tracking codes

Category II Codes—Supplemental Tracking Codes

Used for performance measurements

Codes collect data concerning quality of care and test(s) required

Alphanumeric and end in the letter “F” (1006F)

Located in Appendix H of the CPT manual

Category iii codes new technology

Category III Codes—New Technology

Temporary codes—up to 5 years

Identify emerging technology, services, and procedures

Located after Medicine section

Alphanumeric (0016T)

May or may not receive future Category I code status

Category iii codes

Category III Codes

Category III codes have not been approved and have no proven clinical effectiveness

Usage order

Use Category III code instead of unlisted code

Use unlisted code if no Category III code

The index

The Index!

Used to locate service/procedure terms and codes

Speeds up code location

Like a dictionary

First entries and last entries

Cpt index

CPT Index

Figure: 8.18

Presentation of codes in index

Presentation of Codes in Index

Single code: 38115

Multiple codes: 26645, 26650

- Note comma

Range of codes: 22305-22325

- Note hyphen

Location methods with examples

Location Methods With Examples

Service/procedure: repair, excision

Anatomic site: medial nerve, elbow

Condition or disease: cleft lip, clot

Synonym: toe and interphalangeal joint

Eponym: Jones procedure, Heller operation

Abbreviation: ECG, PEEP (Pressure Breathing, Positive)



Reference index

Locate code in main portion of CPT

Read the entire description and any notes

See in index

“See” in Index

Cross-reference terms

“Look here for code”

Index: Stem, Brain: See Brainstem



Healthcare Common Procedure Coding System

Developed by Centers for Medicare and Medicaid Services (CMS)

Formerly HCFA

HCPCS developed, 1983

CPT did not contain all codes necessary for Medicare services reporting

Levels of codes

Levels of Codes

Level I: CPT

Level II: HCPCS, also known as national codes

Level III: Localcodes (phased out) due to HIPAA

Level iii local codes

Level III, Local Codes

Developed by Medicare carriers for use at local level

Varied by locale

Discontinued December 31, 2003

Some codes incorporated into HCPCS Level I and II

Level ii national codes

Level II: National Codes

Codes for wide variety providers




Temporary codes for Medicare


Level ii national codes1

Level II: National Codes


Codes for wide variety services

Specific drugs

Durable medical equipment (DME)

Ambulance services

Hcpcs gains popularity

HCPCS Gains Popularity

Many payers require

Each year increased number of HCPCS codes

J0585—Botox, per unit



Begins with letter, followed by four digits

Example: E0618, apnea monitor

Each letter represents group codes

Example: “J” codes used to report drugs and dosage

Temporary codes

Temporary Codes

Certain letters (G, K, Q, S) indicate temporary codes

Example: K0006 heavy duty wheelchair

Code books published every January

But codes added, deleted, and revised throughout the year

Notified through carrier bulletins



Just because item/service has HCPCS code does NOT mean service covered


V5130, binauralhearing aid

Not covered under Medicare

From Cummings CW, Flint PW, Harker LA, Haughey BH, Richardson MA, Robbins KT, Schuller DE, Thomas JR, editors: Cummings Otolaryngology-Head & Neck Surgery, ed 4, Philadelphia, 2005, Mosby.

Where hcpcs are used

Where HCPCS Are Used

Outpatient settings

Including outpatient departments in hospital

Level I and II used to report outpatient services to certain payers

Hcpcs index


Directs to specific codes

Do not code directly from index

Reference main portion text before assigning code

See Figure 8–21 in textbook


Hcpcs index1


Alphabetical order



Figure: 8.22

Modified from Buck CJ: 2010 HCPCS Level II Professional Edition, St. Louis, 2010, Saunders.

Hcpcs index2


Main text display


Figure: 8.27

Modified from Buck CJ: 2010 HCPCS Level II Professional Edition, St. Louis, 2010, Saunders.

Hcpcs modifiers

HCPCS Modifiers

CPT and HCPCS modifiers used with both HCPCS and CPT codes

Figure: 8.25

Modified from Buck CJ: 2010 HCPCS Level II Professional Edition, St. Louis, 2010, Saunders.

Anatomical modifiers

Anatomical Modifiers

F1Left hand, second digit

F2Left hand, third digit

F3 Left hand, fourth digit

F4 Left hand, fifth digit

FA Left hand, thumb

F5Right hand, thumb

F6Right hand, second digit

F7Right hand, third digit

F8Right hand, fourth digit

F9Right hand, fifth digit

Often used hcpcs modifiers

Often Used HCPCS Modifiers


RT Right


Right kidney biopsy, 50200-RT

Left kidney biopsy, 50200-LT

Ambulance modifiers

Ambulance Modifiers

Origin and destination used in combination:

First letter: Origin

Second letter: Destination


R = Residence

H = Hospital

RH: origin (first letter) residence and destination (second letter) hospital

Often used hcpcs modifiers1

Often Used HCPCS Modifiers


RT Right


Right kidney biopsy, 50200-RT

Left kidney biopsy, 50200-LT

Table of drugs

Table of Drugs

Listed by generic name

Figure: 8.26

Modified from Buck CJ: 2010 HCPCS Level II Professional Edition, St. Louis, 2010, Saunders.

Durable medical equipment

Durable Medical Equipment


Used with chronic disabling condition

Medicare and Medicaid pay for some DME items

Physician must attest to need using Certificate of Medical Necessity

Home oxygen therapy

Home Oxygen Therapy

Medicare may also pay for oxygen with certain medical conditions

Physician must complete form (CMS- 484) attesting to medical necessity

Conclusion chapter 8

ConclusionCHAPTER 8


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