Charge codes assigned for surgical pathology services are regulated primarily by Current Procedural Terminology (cpt™). The CPT codes allow health care provides to connect for payment from third-party payers (Medicare, Medicaid, and private insurance companies) about the procedures and services rendered to the patient.
Current Procedural Terminology is a coding system developed by the American Medical Association (AMA). CPT is presented in manual taxonomy and instructions format to convert widely accepted, uniform descriptions of medical, surgical, and diagnostic services into five-digit numeric codes. The manual’s text is owned and maintained by AMA’ CPT Editorial Panel. Medicare, other government payers, and private insurers can issue specific instructions that modify the CPT manual’s guidance.
In 1965, U.S. Congress established a new Medicare program that required a uniform nomenclature for medical and surgical services. Private insurers were also interested in a nationally accepted nomenclature. The first edition of the Current Procedural Terminology (CPT), published in 1966, was based on the California Relative Value Study. The third edition was published in 1973, the fourth in 1977.
Use of the CPT manual was increased in 1983 when the Health Care Financing Administration (HCFA) incorporated the CPT codes through Health Care Common Procedural Coding System (HCPCS) and began requiring its use for reporting of services and procedures provided to Medicare beneficiaries. The insurance companies which administered Medicare programs across the country began shifting from their then current coding systems to the HCPCS system. During the transition it became obvious to many of the Medicare carriers that if they were going to have to accept CPT codes for Medicare, they might as well accept them for all the policies they wrote. Other insurance companies followed suit because they realized that it would be in their interest to accept CPT codes. Within three years all insurance companies in the US began accepting, if not requiring, the use of CPT codes. And, as of 1987 most Medicaid programs nationwide began accepting HCPCS codes. In 2000, the U.S. Department of Health and Human Services designated CPT as national wide standard to report medical services. According to Health Insurance Portability and Accountability Act (HIPAA), the CPT data must be used for medical services and procedures rendered to patients by all providers, government payers and insurers.
The new HCPCS coding system consisted (and still does) of three levels of codes. The Level I, and the largest portion of HCPCS, is CPT. Level II national codes (HCPCS) are used by providers to code for services, supplies, and equipment provided to Medicare patients for which no CPT codes exist.
There are three categories of medical services and procedures in the Current Terminology Procedure. Category I encompass most physicians and laboratory services. Category I is updated annually on January 1. Category II codes exist to monitor performance outcomes, and Category III codes are temporary before the code is placed in the Category I. Actually, surgical pathology uses only Category I codes.
CPT (more than 8,000 procedures listed), is the most widely used coding system for reporting services and procedures to health insurance companies. Virtually all payers accept CPT code, while Medicare and Medicaid require CPT codes.
The CPT manual is composed of six divisions which called sections. All codes and descriptions are categorized. The CPT codes are arranged in numerical order in each section. CPT sections Pathology and Laboratory have range of codes 80002-89399. The surgical pathology codes occupy a minute portion of them (88300-88399).
CPT codes can be distinguished from other codes in that they consist of five numbers followed by a verbal description of the procedure or service associated with the code. Insurance pays not only on WHAT (CPT) but also WHY (ICD-9-CM).
CPT also contains numeric modifiers (two or five digits) that are to be listed after the codes which they modify. The modifiers are predominately the billing manager’s realm
Most hospitals and commercial laboratories use computer dictionaries in their anatomic pathology information system. Computer dictionary has a CPT coding module plugged into their information module which combines clinical procedures with CPT manual’s descriptors. If an institution does not use an information system, the charge capture system is carried out manually, but using CPT codes.
The Medicare Correct Coding and Payment Manual for Procedure and Services uses the Payment Computation formula. According to the Manual, the first step is to “assign the initial code using the CPT manual.” If the initial CPT/HCPCS code were chosen incorrectly, everything goes wrong. These materials concentrate on the initial CPT code.
CPT coding might disappear in the USA with changes in health care organization. However, in the foreseeable future it will remain as a tool for clarification of financial relationships between healthcare providers and payers.
These materials do not represent official advice of the CAP, AMA, CMS or other governmental institution. The information will not bear any liability for its application and will not prevent any dispute with a third-party payer.