Chapter 3: Introduction to Coding Methodologies in Health Care

Learning Objectives:

• Define the International Classification of Diseases (ICD) and Current Procedural Terminology (CPT).
• Discuss the significance of using ICD and CPT codes.
• Discuss the difference between ICD and CPT codes.
• Describe types of CPT codes.
• Learn how to find ICD-10 diagnosis codes and CPT procedural codes online.

The International Classification of Diseases (ICD) and Current Procedural Terminology (CPT) are essential coding systems in healthcare. ICD codes are used to classify and code diagnoses, symptoms, and procedures, providing a standardized way to describe a patient’s medical condition. CPT codes, on the other hand, are used to document medical procedures and services, ensuring uniformity in the reporting and billing process. Whether billing for health care services through insurance or using a bill, the payer needs several key pieces of information to understand what is being billed and to determine whether (and how much) to pay for it.

Understanding ICD Codes

ICD codes describe a client’s diagnosis, referring to the specific condition being treated, such as coronary artery disease. Developed by the World Health Organization (WHO) for worldwide use, ICD codes are a standardized diagnostic language utilized by healthcare providers, payers, researchers, and global public health officials. These codes are not only crucial in the healthcare billing process but also play a vital role in identifying health and disease trends across countries. Simply put, ICD codes ensure consistency and clarity in diagnosing and reporting medical conditions globally.

History of ICD Codes in the United States

The history of ICD codes in the United States saw a significant development with the creation of the International Classification of Diseases, Tenth Revision (ICD-10) in 1992, which succeeded the ICD-9 system. Official use of ICD-10 began in the United States in 2014 (Video 1), and it was divided into two systems: ICD-10-CM (Clinical Modification) for diagnostic coding and ICD-10-PCS (Procedure Coding System) for inpatient hospital procedure coding. Originating in the 19th century, the ICD system has continuously evolved, with the latest version, ICD-11, being adopted by the 72nd World Health Assembly in 2019 and coming into effect on January 1, 2022.

“Video 1: Introduction to ICD-10 Coding” by CMSHHSgov, Centers for Medicare & Medicaid Services (CMS) is in the Public Domain, CC0

Discussion Questions

• How do ICD codes help healthcare providers and insurance companies communicate about a patient’s medical condition?
• Why was it necessary for the United States to transition from ICD-9 to ICD-10, and what are the differences between ICD-10-CM and ICD-10-PCS?

The Significance of ICD Codes

The ICD is important because it provides a common language for recording, reporting, and monitoring diseases. This standardized system allows for consistent and comparable data sharing across hospitals, regions, and countries over time. By facilitating the collection and storage of data, the ICD supports analysis and evidence-based decision-making, ultimately contributing to improved healthcare outcomes and policy planning on a global scale.

The ICD’s uniformity helps in tracking and understanding health trends, identifying outbreaks, and assessing the burden of diseases. This system plays a crucial role in international health statistics, enabling researchers and policymakers to develop strategies for disease prevention and control. The comprehensive data gathered through ICD coding also aids in resource allocation and healthcare budgeting, ensuring that resources are directed where they are most needed. Overall, the ICD is a foundational tool in the global effort to enhance public health and manage healthcare systems efficiently.

Discussion Questions

• How does the ICD system help in sharing health information between different countries and hospitals?
• Why is it important for healthcare providers to use a standardized coding system like ICD for recording and reporting diseases?

Global Importance and Utilization of ICD Codes in Healthcare

ICD codes are used by a wide range of professionals and organizations, including physicians, nurses, other healthcare providers, researchers, health information managers and coders, health information technology workers, policy-makers, insurers, and patient organizations. The ICD system has been translated into 43 languages and is utilized by all member states of the World Health Organization (WHO). Most countries use the ICD to report mortality data, a primary indicator of health status. According to the WHO Nomenclature Regulations adopted by the World Health Assembly in 1967, all member states are expected to use the most current version of the ICD for reporting death and disease statistics, ensuring global consistency in health data reporting.

Discussion Questions

• How do different professionals like doctors, nurses, and researchers, use ICD codes in their work?
• Why is it important for all member states of the WHO to use the latest version of the ICD for reporting mortality data?

ICD-11: Enhancing Global Health Data Management and Utilization

The ICD system, particularly its latest iteration, ICD-11, serves a crucial purpose in healthcare by facilitating the systematic recording, analysis, interpretation, and comparison of mortality and morbidity data worldwide. By allowing uniform classification across countries and regions, ICD-11 ensures consistency in health data reporting, aiding in the understanding of global health trends over time. Moreover, it promotes semantic interoperability, meaning that the recorded data can be easily understood and utilized across various healthcare settings and applications beyond mere statistics. This interoperability enhances decision support, resource allocation, reimbursement processes, development of guidelines, and more, making ICD-11 an indispensable tool for healthcare professionals, policymakers, and researchers alike.

“Figure 1: ICD-11 Purpose and Uses” by World Health Organization is in the Public Domain, CC0

The utilization of ICD-11 extends far beyond mere statistical reporting, encompassing various critical aspects of public health, clinical practice, and healthcare management. In the realm of public health, ICD-11 plays a pivotal role in accurately identifying and categorizing causes of death, thereby enabling targeted interventions and policy formulations to address prevalent health concerns within communities. Additionally, its systematic classification system facilitates the recording of clinical terms and medical records, ensuring uniformity and accuracy in patient documentation across healthcare facilities. Through surveillance mechanisms, ICD-11 enables the timely detection and monitoring of disease outbreaks, aiding in the implementation of effective containment measures. In clinical settings, ICD-11 serves as a valuable tool for assessing patient functioning, guiding treatment decisions, and providing support for healthcare professionals in delivering optimal care. Its integration into primary care settings fosters preventive measures by identifying risk factors and enabling early intervention strategies to mitigate the onset of diseases.

In research endeavors, ICD-11 provides a standardized framework for conducting studies, facilitating comparability and generalizability of findings across diverse populations and settings. Additionally, ICD-11 contributes to patient safety initiatives by enabling the monitoring of adverse events related to drugs, medical devices, and procedures, thereby enhancing quality assurance protocols. Its role in casemix costing and resource allocation, such as through Diagnosis Related Groups (DRG), ensures efficient utilization of healthcare resources and equitable distribution of services. Lastly, in cancer registration efforts, ICD-11 facilitates the systematic collection and analysis of data related to cancer incidence, prevalence, and outcomes, thereby supporting research initiatives and informing cancer control strategies at both local and global levels.

Discussion Questions

• How does the systematic classification provided by ICD-11 benefit public health efforts, particularly in terms of identifying health concerns within communities and implementing targeted interventions?
• Beyond statistical reporting, how does the integration of ICD-11 into clinical practice enhance patient care and support healthcare professionals in delivering optimal treatment and preventive measures?

Understanding CPT Codes

CPT codes, developed by the American Medical Association, are used to describe clinical procedures and diagnostic and care activities within the healthcare system. These codes explain the specific actions taken by healthcare providers during interactions with patients or clients. They serve as a universal procedural language across various healthcare sectors in the United States, including federal government programs like Medicare and Medicaid, as well as private insurance companies. This standardized coding system ensures consistent communication and billing for medical services nationwide.

Types of CPT Codes

In addition to clinical documentation, CPT codes play a crucial role in administrative management purposes, such as claims processing and the development of guidelines for medical care review. By using a universal coding system, healthcare providers and payers, including federal programs like Medicare and Medicaid as well as private insurance companies, can ensure accurate billing and reimbursement processes. This consistency helps reduce misunderstandings and disputes over the services provided.

CPT codes are categorized into three types:

Category I: These codes cover procedures and services that are widely performed and approved by the FDA. They include common medical practices, ranging from surgeries to diagnostic tests. Codes range from 00100-99499 and are generally ordered into sub-categories based on procedure/service type and anatomy.

Category II: These codes are supplementary tracking codes used primarily for performance measurement. They facilitate data collection about the quality of care delivered by capturing information about the clinical services typically included in routine care.

Category III: These codes are temporary codes for emerging technologies, services, and procedures. They help track the usage and effectiveness of new and experimental procedures and technologies before they become more widely accepted and move into Category I.

By providing a comprehensive framework for coding medical services, CPT codes support the effective management of healthcare services and contribute to the overall quality and efficiency of the healthcare system nationwide.

Discussion Questions

• Why is it important for healthcare providers and insurance companies to use a universal coding system like CPT codes? Consider how consistent coding helps with billing, reducing misunderstandings, and ensuring accurate reimbursement.
• How do the different types of CPT codes (Category I, II, and III) support the management and improvement of healthcare services? Think about the specific roles of each category in terms of common procedures, performance measurement, and emerging technologies.

Creation and Maintenance of CPT Codes

For more than 50 years, CPT codes have served as the primary medical language used to communicate across healthcare, enabling seamless processing and advanced analytics for medical procedures and services. The creation and maintenance of the CPT code set are overseen by the CPT Editorial Panel, which is responsible for ensuring that the codes reflect current clinical practice and incorporate the latest innovations in healthcare. This panel, consisting of experts from various medical and industry fields, continually updates the CPT codes based on insights and feedback from clinical practitioners, ensuring the codes remain relevant and effective in capturing the complexity of modern medical care. This dynamic updating process helps improve the delivery of care by ensuring that the coding system remains aligned with contemporary medical practices and technological advancements.

Discussion Questions

• Why is it important for the CPT Editorial Panel to frequently update the CPT codes? Consider how regular updates help the codes stay relevant to current medical practices and new healthcare technologies.
• How do CPT codes help improve the delivery of healthcare services? Think about the role of CPT codes in communication, billing, and adapting to advancements in medical care.

Role of the CPT Editorial Panel

The CPT Editorial Panel, appointed by the AMA Board of Trustees, plays a critical role in maintaining and updating the CPT code set (Video 2). This independent group is comprised of expert volunteers from various sectors of the healthcare industry. Their primary responsibility is to ensure that any changes to the CPT codes undergo a rigorous, evidence-based review process and meet specific criteria. By doing so, the panel ensures that the codes remain accurate, up-to-date, and reflective of current clinical practices and technological advancements in healthcare. This diligent oversight helps maintain the integrity and reliability of the CPT coding system, which is essential for effective communication, billing, and overall management within the healthcare sector.

“Video 2: CPT® E/M Office Visit changes: How did we get here and what changes can you expect?” by American Medical Association (AMA) is in the Public Domain, CC0

Discussion Questions

• Why is it important for the CPT Editorial Panel to include volunteers from different parts of the healthcare industry? Discuss how having experts from various sectors (like providers, insurers, and administrators) benefits the review process of CPT codes. How might diverse perspectives ensure that the CPT codes accurately reflect current healthcare practices?
• What challenges might the CPT Editorial Panel face in keeping the CPT code set updated and accurate? Explore potential obstacles such as the rapid pace of technological advancements and evolving clinical practices. How could the panel address these challenges to ensure the codes remain reliable and useful in healthcare billing and management?

AMA CPT Advisors

The AMA CPT Advisors are groups of physicians nominated by national medical specialty societies that hold representation in the AMA House of Delegates and the AMA Health Care Professionals Advisory Committee (HCPAC). These advisors play a crucial role in supporting the CPT Editorial Panel, providing specialized expertise and insight from various medical specialties. Their nominations ensure that the panel receives diverse perspectives and clinical knowledge necessary for the rigorous review and updating of the CPT code set. By collaborating closely with the panel, the AMA CPT Advisors contribute to maintaining the accuracy, relevance, and comprehensiveness of CPT codes, thereby supporting effective healthcare communication, billing accuracy, and overall management in the healthcare sector.

Discussion Questions

• Why is it important for CPT Advisors to represent different medical specialties? Discuss how diverse medical expertise helps ensure that CPT codes accurately reflect specialized clinical practices. How might collaboration among advisors from various specialties benefit the healthcare industry?
• What role do AMA House of Delegates and HCPAC play in selecting CPT Advisors? Explore how nominations from these bodies contribute to the selection of advisors with diverse perspectives. How does this selection process impact the quality and reliability of CPT codes?

Role of CPT Advisors and Editorial Panel Meetings

The role of CPT Advisors is crucial in guiding the CPT Editorial Panel on procedure coding and terminology. These advisors, as clinical experts in their respective fields, propose revisions and additions to the CPT code set, ensuring it remains current and reflective of advances in healthcare practices. They collaborate with stakeholders across the healthcare industry to advocate for changes that enhance the accuracy and utility of CPT codes. The CPT Editorial Panel convenes three times annually to evaluate applications for new codes or updates to existing ones. This regular schedule allows for thorough review and discussion of proposed changes, ensuring that decisions are evidence-based and align with current clinical standards. Participation in these meetings is open to anyone who submits an application, promoting transparency and inclusivity in the code development process.

Discussion Questions

• Why is it important for the CPT Editorial Panel to meet three times a year? Discuss how regular meetings help ensure that CPT codes are updated promptly to reflect advances in healthcare. How might frequent meetings benefit healthcare providers, insurers, and patients?
• What role do CPT Advisors play in proposing changes to the CPT code set? Explore how clinical expertise from CPT Advisors influences decisions on new codes and revisions. How does collaboration between Advisors and the Editorial Panel improve the accuracy and relevance of CPT coding in healthcare?

Differences Between ICD-10 and CPT Codes

ICD-10 and CPT codes serve distinct yet complementary roles in the healthcare system. ICD-10 codes, which stand for International Classification of Diseases, Tenth Revision, are used to document diagnoses and medical conditions. These codes provide detailed information about a patient’s diagnosis, enabling healthcare providers and payors to understand the health issue or disease that requires medical attention. For example, an ICD-10 code would specify if a patient has diabetes, a broken bone, or a respiratory infection, offering a standardized way to classify health conditions across different medical facilities and countries.

On the other hand, CPT codes, or Current Procedural Terminology codes, are used to describe the treatments and services provided to patients. These codes detail the specific procedures, surgeries, tests, and other medical services performed by healthcare professionals. CPT codes ensure that there is a clear and consistent way to bill for these services, facilitating communication between healthcare providers and insurers. When used together, ICD-10 and CPT codes provide a comprehensive picture of a patient’s healthcare encounter: the ICD-10 code explains why the patient needed medical attention, and the CPT code outlines what was done to address the issue. This dual coding system is crucial for accurate billing, efficient processing of insurance claims, and maintaining detailed medical records.

Discussion Questions

• Why do healthcare providers need both ICD-10 and CPT codes? Discuss how using both types of codes helps in accurately describing a patient’s medical condition and the treatment provided. How do these codes work together to improve communication between healthcare providers and insurance companies?
• How might errors in ICD-10 or CPT codes affect patient care billing? Explore the potential consequences of incorrect coding on patient treatment plans and insurance claims. What steps can healthcare providers take to ensure the accuracy of these codes?

How to Find ICD-10 Diagnosis Codes Online?

Finding ICD-10 diagnosis codes online is straightforward with several reliable resources available. Here are five basic steps to help you find ICD-10 codes using The National Center for Health Statistics – ICD-10-CM Browser tool, ICDData.com, and ICD-10 WHO Version 2019 COVID Expanded:

Visit the Website: Go to the website of the resource you wish to use:

National Center for Health Statistics – ICD-10-CM Browser tool

ICDData.com (2023) – ICD10 Code Lookup

ICD-10 WHO Version 2019 COVID Expanded

Locate the Search Tool: Find the search bar or lookup tool on the homepage of the website.

Enter Keywords: Type in keywords related to the diagnosis you are looking for (e.g., “diabetes,” “fracture,” “COVID-19”).

Review Results: Browse through the list of codes and descriptions that match your search terms.

Select the Correct Code: Click on the relevant diagnosis to view more detailed information and ensure you have the correct ICD-10 code for your needs.

Here are Specific Steps on How to Look Up ICD Codes using the https://icdlist.com/ tool:

Step 1: Enter the ICD code in the search box.

Step 2: Click on the parent code provided under Category which is “Fracture of femur (S72).”

Step 3: Scroll down to look for the code with subcategories i.e., S72.392A.

Step 4: Click on the code for S72.392A Oth fracture of shaft of left femur, init for clos fx.

This is how we can identify whether it’s a billable or non-billable code.

How to Look Up for CPT Codes Online?

Searching for CPT codes online can be efficiently done using the Centers for Medicare & Medicaid Services (CMS) website. Here are five basic steps to find CPT codes using the CMS.gov – List of CPT/HCPCS Codes resource:

Visit CMS.gov: Go to the Centers for Medicare & Medicaid Services website at CMS.gov.

Navigate to CPT/HCPCS Codes: Use the search bar or menu to find the “List of CPT/HCPCS Codes” page.

Access the Search Tool: Locate the search function on the page where you can input keywords or specific code numbers.

Enter Keywords or Codes: Type in relevant keywords related to the procedure or service you are searching for (e.g., “appendectomy,” “blood test”) or the specific code if you know it.

Review and Select: Browse through the results to find the appropriate CPT code. Click on the code or description to view detailed information and ensure it matches the procedure or service you are looking for.

Key Terms

ICD Codes (International Classification of Diseases): A standardized system used globally to classify and code diagnoses, symptoms, and procedures. Developed by the World Health Organization (WHO).

CPT Codes (Current Procedural Terminology): A set of codes used in the United States to document medical procedures and services for billing purposes. Developed by the American Medical Association (AMA).

ICD-10: The tenth revision of the ICD system, used for coding a wide range of health conditions and diseases. Divided into ICD-10-CM for clinical modification and ICD-10-PCS for inpatient procedures.

ICD-11: The latest version of the ICD system, adopted by the WHO in 2019, which enhances global health data management and interoperability.

CPT Editorial Panel: A group of experts from various healthcare sectors responsible for maintaining and updating the CPT code set, ensuring its accuracy and relevance.

CPT Advisors: Physicians nominated by medical specialty societies and the AMA House of Delegates who provide specialized expertise and advice to the CPT Editorial Panel.

Category I CPT Codes: Standard codes for widely performed procedures and services, ranging from 00100-99499.

Category II CPT Codes: Supplementary tracking codes used for performance measurement and quality of care data collection.

Category III CPT Codes: Temporary codes for new and emerging technologies, procedures, and services.

National Center for Health Statistics (NCHS): A U.S. government agency that provides the ICD-10-CM Browser tool for looking up ICD-10 diagnosis codes.

CMS (Centers for Medicare & Medicaid Services): A federal agency that offers a list of CPT/HCPCS codes for looking up procedural codes.

Semantic Interoperability: The ability of different systems and organizations to exchange, interpret, and use data consistently, which is a key feature of the ICD-11 system.

Exercises

Simulation Exercise: Identifying ICD and CPT Codes

Code	Type	Diagnosis/Procedure	Type of Patient/Cause	Covered by Insurance?	Type of Insurance
99213	CPT	Office/Outpatient Visit, Level 3	Established patient with common illness (e.g., flu)	Yes	Private insurance, Medicare, Medicaid
E11.9
93000
J45.909
81001

Objective:

The objective of this simulation exercise is to enhance your ability to distinguish between ICD-10 and CPT codes, understand their applications, and assess insurance coverage. This exercise will help in familiarizing with the coding systems and their role in healthcare billing and patient care management. The first code is identified as a sample.

Instructions for the Exercise:

Code Identification: Determine if the code is an ICD-10 or CPT code based on its format and context.

Diagnosis/Procedure Understanding: Identify what the code represents, either a diagnosis (ICD-10) or a procedure/service (CPT).

Patient/Cause Description: Describe the typical patient or cause for which this code would be used.

Insurance Coverage: Assess whether the procedure or diagnosis would typically be covered by insurance.

Type of Insurance: Identify which types of insurance (private insurance, Medicare, Medicaid) would likely cover the diagnosis or procedure.

Steps to Complete the Exercise:

Review Each Code: Look at each code in the first column and identify if it’s an ICD-10 or CPT code.

Determine the Diagnosis/Procedure: Use resources provided in Chapter 3 to understand what each code represents.

Identify the Patient/Cause: Describe the typical patient or medical cause associated with the code.

Check Insurance Coverage: Use resources provided in Chapter 3 to determine if the diagnosis/procedure is covered by insurance.

Specify the Insurance Type: Identify which types of insurance would cover the diagnosis or procedure, based on standard insurance practices.

References

The American Medical Association (AMA). (n.d.). CPT overview and code approval. Retrieved from https://www.ama-assn.org/practice-management/cpt/cpt-overview-and-code-approval

The American Medical Association (AMA). (n.d.). CPT (Current Procedural Terminology). Retrieved from https://www.ama-assn.org/amaone/cpt-current-procedural-terminology

World Health Organization (WHO). (n.d.). International Classification of Diseases, Eleventh Revision (ICD-11): ICD purpose and uses. Retrieved from https://www.who.int/standards/classifications/classification-of-diseases

Centers for Medicare & Medicaid Services (CMS). (n.d.). List of CPT/HCPCS codes. Retrieved from https://www.cms.gov/medicare/regulations-guidance/physician-self-referral/list-cpt-hcpcs-codes

National Center for Health Statistics. (n.d.). ICD-10-CM browser tool. Retrieved from https://icd10cmtool.cdc.gov/?fy=FY2024

ICDData.com. (2023). ICD10 code lookup. Retrieved from https://www.icd10data.com/ICD10CM/Codes

World Health Organization (WHO). (2019). ICD-10 WHO version 2019 COVID expanded. Retrieved from https://icd.who.int/browse10/2019/en#/VIII

CMSHHSgov. (n.d.). Introduction to ICD-10 coding [Video]. Retrieved from https://youtu.be/NNbTcMwrop8?si=wqxYVv_Zj2z2T4au

AMA. (n.d.). CPT purpose & mission [Video]. Retrieved from https://www.ama-assn.org/about/cpt-editorial-panel/cpt-purpose-mission