What CPT Codes Mean for Medical Billing January 31, 2022

CPT codes

The Current Procedural Terminology (CPT) codes play a vital role in the medical billing process. The CPT functions as descriptions of the services provided. New CPT codes are added for everything a certified health care provider can do each year.

So, we will discuss what CPT codes mean for medical billing here.

Understanding CPT Codes in Medical Coding and Billing

Current Procedural Terminology (CPT) is a standard code set for reporting medical, surgical, and diagnostic procedures to healthcare providers, insurers, and organizations. In addition to this, CPT codes function in a multitude of ways in the medical field, such as

  • Setting guidelines for clinical care reviews and processing claims.
  • Documenting medical services and treatments provided to patients.
  • Providing an insurance company with the procedures the doctor wants reimbursement for.
  • Incorporating ICD codes into the medical processes provides payers with a complete picture of the operations.
  • Identifying the tasks and services that health care providers offer.
  • Tracking and billing of medical services.
  • A worldwide coding system for medical treatments.

The American Medical Association (AMA) streamlines the CPT manual every year. It also contains extensive requirements for service and procedure coding. Thus, providers are responsible for accurate reporting and documentation of the services.

A Brief Overview of CPT’s History

The American Medical Association manages CPT. In 1966, the AMA published the first edition of its manual of surgical procedures. At the time, terminology and reporting were standardized. 

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 set guidelines for transmitting and storing electronic health records. Also, these codes are required for coding medical terms and billing insurance companies. They provide information about the purpose of the CPT code treatment.

The Three Categories of CPT Codes

Depending on the category, CPT codes can be numeric or alphanumeric. Using CPT code descriptors, diverse users can understand clinical health care and use common standards.

Category 1: Medical procedures and practices

The first category covers widely performed procedures and medical practices. When coders talk about CPT, the Category 1 codes refer to FDA-approved services and procedures performed by healthcare providers nationwide. They are five-digit numeric codes that are proven and documented.

Six sections make up Category 1 codes, like:

  • Evaluation and Management: 99201 – 99499
  • Anesthesia: 00100 – 01999; 99100 – 99140
  • Surgery: 10021 – 69990
  • Radiology: 70010 – 79999 
  • Pathology and Laboratory: 80047 – 89398
  • Medicine: 90281 – 99199; 99500 – 99607

Category 2: Services for Clinical Laboratories

Category 2 CPT codes provide supplementary tracking codes used for performance measurement. Moreover, these codes describe the quality of care your patients receive. However, medical codes are optional and do not replace Category 1 codes.

Category III: Innovative Technologies, Services, and Procedures

Category III codes are temporary Alphanumeric codes for developing technologies, procedures, and services. These codes were created to collect, assess, and in some cases, pay for new services and processes that don’t meet the criteria for Category I codes.

What Are the Uses of Cpt Codes?

Patient costs are directly related to CPT codes. Due to this, offices, hospitals, and other medical facilities are extremely strict about coding. These facilities usually hire professionals to code services correctly.

The initial stage of coding

In most cases, the coding process will begin with your healthcare provider. They will list the CPT codes on paper forms for your visit. Likewise, you will receive a note in your Electronic Health Record (EHR) if they use one during your stay. Staff can often search for codes by service name.  

Validation and Submission

Billers and medical coders look at your records after you leave the office. Indeed, these professionals ensure the correct codes for your records.

After all, your billing department sends a list of services to your insurance company. Medical providers often store and transmit this information electronically.

Processing of Claims

Your insurer or payer processes the claim using the codes. In this case, they decide how much to pay your healthcare provider and owe anything.

Research Purposes

In fact, data coding helps insurance companies and government officials predict future patient healthcare costs. Analyzing data coding by state and federal governments can provide insight into medical trends. It also assists with planning and budgeting for Medicare and Medicaid.

These are the CPT codes commonly used in medical billing and coding processes:

  • New Patient Office Visit Codes: 99201-05. These codes apply to patients who have not seen physicians within the same group in the past three years.
  • Established Patient Office Visit Codes: 99211-15. Patients are seen by a physician in the same specialty within the same group in the past three years;
  • Initial Hospital Care Codes: 99221-23
  • Subsequent Hospital Care Codes: 99231-23
  • Emergency Department Visit Codes: 99281-85
  • Office consultation codes: 99241-45. Often used to obtain a physician’s opinion on behalf of another physician.

Furthermore, the AMA has a complete list of medical billing codes here.


Medical providers submit claims for payment using CPT codes, which the AMA maintains. Therefore, following CPT process recommendations benefits physicians (and their patients).

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