What is a CPT Code in Medical Billing

Definition of CPT

In medical billing, the term CPT stands for Current Procedural Terminology—a code system created by the American Medical Association (AMA). As the term suggests CPT is a coding methodology used to assign codes for medical procedures for accurate communication amongst health care providers, patients, insurance payers, medical coders, and billers. According to AMA, the purpose of CPT codes is to offer “uniform language for coding medical services and procedures to streamline reporting, increase accuracy and efficiency”. Under the Health Insurance Portability and Accountability Act (HIPAA), the CPT code set was designated as the national coding system by the U.S. Department of Health and Human Services.
Unlike Health care Common Procedure Coding System (HCPCS) that is used to report non-physician services, CPT is used to report diagnostic, medical, surgical, therapeutic, and evaluation and management (E/M) services.

Format and Categories of CPT Codes

A CPT code consists of five characters either alphanumeric or numeric based on its category.

Typically, CPT codes are divided into three categories namely—Category I, Category II, Category III. However, a new category called Proprietary Laboratory Analyses (PLA) codes were recently added by the American Medical Association to the CPT code set. Each category contains a different set of CPT codes as per the nature of medical services.

Category I: The codes in this category are assigned to the medical procedures that are part of the standard medical practice in the U.S. The codes belonging to this category range from 00100-99499. These codes are divided into six sections—anesthesiology (00100-01999; 99100-99140), medicine (90281-99199; 99500-99607), pathology, and laboratory (80047-89398), radiology (70010-79999), surgery (10021-69990), and evaluation and management (99201-99499).

Category II: These codes are called tracking codes as they are used to measure the performance and quality of medical care delivered by collection information. Unlike Category-I codes, these codes are optional. Also, these codes are alphanumeric in format and can’t replace the Category-I and Category-II codes.

Category III: This category contains temporary alphanumeric codes that are assigned to emerging technology, procedure, and services that aren’t covered in the Category-I. These codes are used for data collection and assessment, payment of new procedures, and services falling outside the Category-I codes.

Proprietary Laboratory Analyses (PLA) codes: This newly introduced category of CPT code is described by American Medical Association (AMA) as “proprietary clinical laboratory analyses and can be either provided by a single (“sole source”) laboratory or licensed or marketed to multiple providing laboratories that are cleared or approved by the Food and Drug Administration (FDA)). This category includes but is not limited to Advanced Diagnostic Laboratory Tests (ADLTs) and Clinical Diagnostic Laboratory Tests (CDLTs), as defined under the Protecting Access to Medicare Act of 2014 (PAMA)”.

The CPT Editorial Panel, authorized by AMA is responsible to issue, update and maintain clinically valid CPT code sets reflecting the current clinical practice. The CPT Editorial Panel thrice a year to issue or revise the CPT code set. Regular revisions in the CPT code set helps in developing accurate codes encompassing the entire range of health care services.