Medical Billing

# Introduction to Medical Billing Codes used in the Healthcare System

- March 20, 2025
- Posted by Kristen Edwards

22 Mar

With the emergence of technological involvement over the past few years, the healthcare industry has seen a drastic change in every aspect of its deliverance and compensation. For medical care services, including psychological testing and psychotherapy services, providers are reimbursed by a range of alphanumeric medical billing codes that are categorized specifically for diagnosis and diseases. Each medical billing code is unique and regulated by the American Medical Association for a streamlined reimbursement process.

In addition, medical billing codes are a standardized way of describing medical procedures, diagnoses, and services provided by healthcare professionals. They are used by healthcare providers, insurance companies, and government agencies to process and reimburse medical claims. Later in the article, learn about medical billing codes and what are some common medical billing codes for diseases, procedures, and diagnoses.

## Medical billing codes in the healthcare system

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There are two central coding systems used in the healthcare system:

### International Classification of Diseases (ICD) codes:

These codes are used to describe and classify medical diagnoses and conditions. Healthcare providers typically use them to record the specific reason(s) for seeking medical attention or a patient’s diagnosis. The current version of ICD codes is ICD-10.

### Current Procedural Terminology (CPT) codes:

These codes are used to describe medical procedures and services provided by healthcare professionals. Healthcare providers typically use them to bill for their services.

Medical billing codes are used to provide medical information about procedures and services to insurance companies and government agencies. They use this information to determine reimbursement rates and make decisions about coverage. Accurate and comprehensive medical billing codes are essential for ensuring that healthcare providers are reimbursed fairly and that patients receive the care they need.

## CPT – Current Procedural Terminology Coding System

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The Current Procedural Terminology (CPT) coding system is a standardized set of medical codes developed and maintained by the American Medical Association (AMA). CPT codes are used to describe medical procedures and services provided by healthcare professionals and are used for billing purposes.

## CPT codes are organized into three categories:

### Category I codes:

Codes that medical coders work with typically contain Category I CPT codes. These codes are thoroughly described in the CPT codebook. In addition, these CPT codes are updated by the AMA and the CPT code Editorial board annually.

These codes are the most common and describe medical procedures and services that are widely used in healthcare. They are five-digit codes that represent specific procedures or services.

Besides, Category I CPT codes are further categorized into six sections of the major diseases and concerns of the healthcare industry, which include;

- Evaluation and Management
- Radiology
- Surgery
- Medicine
- Pathology and Laboratory
- Anesthesiology

These sections of the CPT category I code have a range of numeric diagnosis codes. Here’s the range of codes;

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

### Category II codes:

Category II codes describe the Category I CPT codes a bit more elaborately. These supplemental alphanumeric codes to Category I are used to collect performance data related to specific medical procedures and services. They are four-digit codes that begin with the letter “F”.

Although these codes are not used commonly and are optional, but they provide additional information about a procedure or diagnosis, which can be useful for the future healthcare provisions of a patient.

They cannot replace Category I or III CPT Codes, and they give them a new, elaborated meaning. CPT Category II does not have a range of codes that CPT category I have, but they pose a significant meaning to Category I in many cases.

### Category III codes:

These codes are used to describe emerging or experimental medical procedures, technology, and services. You find services and technology codes under the Categories I and III. But when there’s a case when a code is not found under the Category I, Category III should be searched for.

They are five-digit codes that begin with the letter “T”. When AMA or insurance providers find an emerging healthcare technology, procedure or service, they put the code in Category III.

CPT codes are regularly updated to reflect changes in medical practices and technology. Healthcare providers are responsible for selecting the appropriate CPT code for each medical procedure or service provided and submitting this information to insurance companies or government agencies for reimbursement.

Accurate and comprehensive CPT coding is essential for ensuring that healthcare providers are reimbursed fairly and that patients receive the care they need. However, coding errors or fraud can occur, leading to financial losses for insurance companies and government agencies and potential legal and regulatory consequences for healthcare providers.

## What are modifiers?

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Modifiers are used to provide additional information about a CPT code. They can be used to indicate that a procedure was performed on a different site, by a different provider, or with a different technique. Modifiers help to provide more detailed information about the medical procedure or service, which can be used for billing, reimbursement, and quality measurement purposes.

CPT codes and modifiers are an essential part of the healthcare system, providing a standardized way of describing medical procedures and services and ensuring that healthcare providers are reimbursed fairly for the services they provide.

## Why CPT Codes and Modifiers are used

CPT codes and modifiers are used for several reasons in the healthcare system, including:

Billing and compensation: CPT codes and modifiers are used for billing for medical services and procedures provided by healthcare professionals. Insurance companies and government agencies use this information to determine reimbursement rates and process medical claims.

Regularization: CPT codes provide a standardized way of labeling medical procedures and services, which helps to improve reimbursement processes and reduce claim denial chances. They also promote smooth transactions between healthcare providers, insurance companies, and government agencies.

Analysis and Research: CPT codes and modifiers can be used to collect data on medical procedures and services provided by healthcare professionals. This information can be used for research and analysis to improve medical practices, develop new treatments, and establish uniformity in patient care at all levels.

Quality measurement: CPT codes and modifiers can be used to track the quality of healthcare services healthcare professionals provide. This information can be used to evaluate healthcare providers and identify areas for improvement.

## Limitations of CPT Codes

While CPT codes provide a standardized way of describing medical procedures and services, there are some limitations to their use in the healthcare system. Some of these limitations include the following:

Less specified: Some CPT codes may not provide enough detail about a medical procedure or service, leading to confusion or inaccuracies in billing and reimbursement.

Inconsistent use: Different healthcare providers may use CPT codes differently, leading to inconsistencies in the way medical procedures and services are described and billed.

Limited coverage: Some medical procedures and services may not be covered by insurance companies or government programs, even if a CPT code describes them.

Complexity: The CPT coding system can be complex and difficult to navigate, requiring specialized knowledge and training to use effectively.

Lack of flexibility: The CPT coding system may not be flexible enough to accommodate new and emerging medical procedures and services, leading to gaps in coverage and reimbursement.

## Commonly used medical codes for medical billing

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PHYSICAL MEDICINE & REHABILITATION CODES

Diagnosis where face-to-face patient interaction is not required;

- 97018 Paraffin bath therapy
- 97022 Whirlpool therapy
- 97024 Diathermy, e.g. microwave
- 97028 Ultraviolet therapy

Diagnosis where face-to-face patient interaction is required;

- 97032 Electrical stimulation, manual, each 15 minutes
- 97034 Contrast bath therapy, each 15 minutes
- 97035 Ultrasound therapy, each 15 minutes
- 97036 Hydrotherapy, each 15 minutes

The physician or other qualified providers, like therapists, are required to have direct patient contact;

- 97110 Therapeutic exercises, each 15 minutes
- 97112 Neuromuscular reeducation, each 15 minutes
- 97116 Gait training therapy, each 15 minutes
- 97140 Manual therapy 1/> regions, each 15 minutes
- 97530 Therapeutic activities, each 15 minutes
- 97535 Self-care management training, each 15 minutes
- 97537 Community/work reintegration, each 15 minutes
- 97542 Wheelchair management training, each 15 minutes
- 97545 Work hardening/conditioning; initial 2 hours
- 97546 Work hardening; each additional hour
- 97750 Physical performance test or measurement, with a written report, each 15 minutes

NEURO-COGNITIVE ASSESSMENTS/TESTS

- 96119 – Neuropsychological testing (eg Halstead-Reitan Neuropsychological Battery, Wechsler Memory Scales, and Wisconsin Card Scoring Test), with qualified health care professional interpretation and report, administered by technician, per hour of technician time, face-to-face
- 96120 – Neuropsychological testing (eg, Wisconsin Card Sorting Test), administered by a computer, with qualified health care professional interpretation and report

EVALUATION & MANAGEMENT CODE

- 99211 Office/outpatient visit, est

APPLICATION OF CASTS AND STRAPPING

- 29240 Strapping; shoulder
- 29260 Strapping; elbow or wrist
- 29280 Strapping; hand or finger
- 29520 Strapping; hip
- 29530 Strapping; knee
- 29540 Strapping; ankle and/or foot
- 29550 Strapping; toes
- 29580 Unna boot
- 29581 Application of multi-layer compression system; leg (below the knee) including ankle & foot
- 29582 Compression system; thigh and leg, including ankle and foot, when performed
- 29583 Compression system; upper arm and forearm
- 29584 Compression system; upper arm, forearm, hand, and fingers

HEALTH CARE COMMON PROCEDURE CODING SYSTEM (HCPCS) LEVEL II CODES

- A6441-A6457 Bandages/dressings
- E0110-E0118 Crutches
- E0720-E0770 TENS
- E1800-E1841 Orthopedic devices
- L1500-L2999 Orthotic devices
- L3650-L4130 Orthotic devices

- A00-B99 Certain infectious and parasitic diseases
- C00-D49 Neoplasms
- D50-D89 Diseases of the blood and blood-forming organs and certain disorders involving the immune mechanism
- E00-E89 Endocrine, nutritional and metabolic diseases
- F01-F99 Mental, Behavioral, and Neurodevelopmental disorders
- G00-G99 Diseases of the nervous system
- H00-H59 Diseases of the eye and adnexa
- H60-H95 Diseases of the ear and mastoid process
- I00-I99 Diseases of the circulatory system
- J00-J99 Diseases of the respiratory system
- K00-K95 Diseases of the digestive system
- L00-L99 Diseases of the skin and subcutaneous tissue
- M00-M99 Diseases of the musculoskeletal system and connective tissue
- N00-N99 Diseases of the genitourinary system
- O00-O9A Pregnancy, childbirth, and the puerperium
- P00-P96 Certain conditions originating in the perinatal period
- Q00-Q99 Congenital malformations, deformations, and chromosomal abnormalities
- R00-R99 Symptoms, signs, and abnormal clinical and laboratory findings not elsewhere classified
- S00-T88 Injury, poisoning, and certain other consequences of external causes
- U00-U85 Codes for special purposes
- V00-Y99 External causes of morbidity
- Z00-Z99 Factors influencing health status and contact with health services

## Conclusion

While CPT codes are important for describing medical procedures and services in the healthcare system, they are not without limitations. Healthcare providers, insurance companies, and government agencies need to be aware of these limitations and work to address them to ensure that patients receive the care they need and that healthcare providers are reimbursed fairly for their services. Here are some insights about orthopedic CPT and Chiropractic CPT Codes so don’t forget to read them.

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