Understanding CPT Codes: A Comprehensive Guide for Patients and Providers

July 17, 2023 Brian Keller0

What Are CPT Codes?

CPT codes, known as Current Procedural Terminology codes, are numerical designations assigned to various medical tasks and services that patients receive from healthcare providers. These codes play a significant role in tracking and billing medical, surgical, and diagnostic services, and insurers utilize them to determine the appropriate payment to healthcare providers. The consistent use of CPT codes across all providers and payers ensures a standardized billing process and helps reduce errors in the healthcare system.

Understanding CPT Codes

CPT codes are usually composed of five-digit numeric codes, although some may include four numbers and one letter. It’s essential to note that CPT codes do not contain any decimal points. The frequency of usage for different CPT codes varies; some are rarely used, while others are frequently utilized. For instance, codes like 99213 and 99214 are commonly used for general office visits to address new concerns or follow-ups from previous visits.

Role of the American Medical Association (AMA)

The development, maintenance, and copyrighting of CPT codes used worldwide are overseen by the American Medical Association (AMA). These codes remain subject to change as healthcare practices evolve, and new codes may be created and assigned to emerging services. Additionally, existing CPT codes can undergo revisions, and outdated or unused codes may be discarded. As a result, the CPT code system undergoes thousands of updates every year.

Limitations of CPT Codes

While CPT codes aim to standardize the billing process, it’s crucial to recognize that they do not guarantee uniform definitions of healthcare services among all providers. Additionally, payment for the same service can vary between different healthcare providers due to variations in contracts with insurers.

Types of CPT Codes

CPT codes are categorized into several groups:

  • Category I: This category includes procedures, services, devices, and drugs, including vaccines.
  • Category II: Performance measures and quality of care fall under this category, such as patient follow-up.
  • Category III: This category encompasses services and procedures involving emerging technology. Usually, these codes are temporary and apply to newly introduced services or procedures.
  • PLA codes: These codes are specific to lab testing.

Examples of CPT Codes

Here are some examples of CPT codes and their respective applications:

  • 99214: This code is used for office visits.
  • 99397: When individuals are over the age of 65, this code is used for preventive exams.
  • 90658: Used for the administration of a flu shot.
  • 90716: For the administration of the chickenpox vaccine (varicella).
  • 12002: Applied when a healthcare provider stitches up a 1-inch cut on a patient’s arm.
  • 87635: Used when a patient undergoes a COVID-19 test.

Bundled Services

Bundled services refer to a single CPT code that describes multiple services performed together. For example, if a patient breaks their arm and receives an X-ray and a cast, these services may be bundled under one code for billing.

Utilization of CPT Codes

CPT codes have a direct impact on a patient’s healthcare costs, as they determine the amount a patient pays for medical care. To ensure the accuracy of coding, healthcare facilities often employ professional medical coders or coding services to assign the appropriate CPT codes for the services provided.

The Coding Process

The coding process typically commences with the healthcare provider or their office staff, who document the relevant CPT codes during a patient’s visit. If paper forms are used, the codes applicable to the visit are listed. If an electronic health record (EHR) system is used during the visit, the codes are noted within the system, and staff can easily retrieve them based on the service name.

Verification and Submission

Once the patient leaves the healthcare facility, medical coders and billers review the records to ensure the correct CPT codes are assigned to each service provided. Subsequently, the billing department submits a list of the services to the patient’s insurer or payer. In most cases, this information is digitally stored and transferred, although some providers may still use mail or fax.

Claim Processing

Upon receiving the list of services and their corresponding CPT codes, the health plan or payer processes the claim. They determine the amount to be paid to the healthcare provider and the portion for which the patient is responsible.

Research and Planning

Coding data is essential for health insurance companies and government officials to predict future healthcare costs and track trends in medical care. This information aids in planning and budgeting for healthcare programs such as Medicare and Medicaid.

Where CPT Codes Are Found

Throughout a patient’s healthcare journey, CPT codes can be found in various documents:

  • Discharge Paperwork: After an appointment or hospital stay, patients receive paperwork containing a summary of the services received, along with their corresponding CPT codes. In addition to CPT codes, other codes, such as ICD codes indicating diagnoses, may also be present.
  • Bills: Medical bills list the services received, each accompanied by a five-digit CPT code.
  • Explanation of Benefits (EOB): Patients receive EOBs from their payer, outlining the cost of each service covered on their behalf, matched with their respective CPT codes.

Distinguishing CPT Codes from ICD Codes

It’s essential to differentiate between CPT codes and ICD codes. While CPT codes identify the services provided to a patient, ICD codes are used to identify diagnoses. The CPT code system is managed by the American Medical Association, whereas the ICD code system falls under the jurisdiction of the World Health Organization.

Understanding CPT Codes: A Consumer Guide

Consumers interested in understanding CPT codes can access information through various channels. However, it’s important to note that the AMA charges a fee for using CPT codes, limiting the availability of a comprehensive list of codes with explanations online. Nevertheless, the AMA offers a way for consumers to look up CPT codes by conducting searches on their website, typically requiring registration. Consumers can search using a CPT code or a keyword to find the code for a particular service. Additionally, seeking assistance from the healthcare provider’s office or the payer’s billing department can help match CPT codes with specific services.

Preventing Incorrect Coding and Billing Errors

Understanding CPT codes can be beneficial in ensuring the accuracy of hospital bills and identifying billing errors, which can be relatively common. Patient advocacy groups have reported that almost 80% of medical care bills contain minor errors. These seemingly insignificant mistakes can have a substantial impact on patients’ finances, as a wrong CPT code could result in insurance denial and higher out-of-pocket expenses. To avoid potential issues, patients are advised to review their bills carefully and cross-check them with their EOBs. In cases where discrepancies arise, promptly contacting the healthcare provider’s office can help resolve the issue.


HCPCS codes, or Healthcare Common Procedure Coding System codes, are similar to CPT codes and are utilized primarily by Medicare and Medicaid recipients. Managed by the Centers for Medicare & Medicaid Services (CMS), HCPCS codes include two levels: Level I codes, based on CPT codes, encompass services offered by healthcare providers, and Level II codes, which cover non-provider services. Level II codes consist of a letter followed by four numbers and may include additional modifiers, such as two letters or a letter and a number. These codes are applied to items like medical equipment, supplies, and ambulance services. HCPCS Level II code lists are available on the CMS website, while Level I codes remain copyrighted by the AMA, similar to CPT codes.

The Wise Words!

In summary, CPT codes serve as alphanumeric identifiers for healthcare services and supplies, allowing for standardized reporting among healthcare providers. These codes play a crucial role in the billing process, as they are used to communicate the services provided to insurers and facilitate accurate billing. Patients encounter CPT codes in various documents throughout their healthcare journey, including discharge paperwork, bills, and explanation of benefits (EOB) statements. Being informed about CPT codes can empower patients to better understand their healthcare costs and ensure billing accuracy.

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