Medical Billing FAQ
(Last Updated On: December 20, 2016)

Most Primary Care Physicians are more then familiar with CPT coding, or the Current Procedural Terminology (CPT) code set which is maintained by the American Medical Association.

These codes, mostly 5 digit numbers, represent the procedures that doctors, and other practitioners perform. These codes and are the basis on which payments from insurance and the Medicare are made.

This arcane system is normally reduced to a simple nomenclature based on the last digit in the CPT code. For example the CPT codes for new patient in-office visit are:

  • 99201
  • 99202
  • 99203
  • 99204
  • 99205

These numbers go from 1 to 5 so they are normally referred to a Level number exam. The higher the number the more complete the examination will be. Healthcare professional will use the verbal shortcut and say “It’s a Level 3 exam”

But let’s look at what happens when its time to get paid for these services. The insurance carriers gather E&M codes on a per practice basis. They gather these statistics and then they establish ratios that they expect a doctor to maintenance for the higher coded exams. This is quota system, nothing more and nothing less.

It is not usual to our staff to establish a solid working relationship with their counterparts at the insurance company. As a large processor of claims we will often be given “advice” when a physician is getting too near the “quota” for the higher level exams.

What does this means? It means that a PCP has to be concerned with towing the carriers’ line or expect a request for further documentation or even an audit.

The Journal of the American Board of Family Medicine study, Accuracy of CPT Evaluation and Management Coding by Family Physicians study done in 2001 was quite through but came to the wrong conclusions. Physician under-code old patients because they are afraid that they will be punished for spending too much time on each patient, which is what the higher level codes actually represents.

Further, they “over-code” new patients because the higher codes are extremely restrictive. The Evaluation and Management Services Guide issued by the The Centers for Medicare & Medicaid Services (CMS) is a confusing document. Even the AMA’s CPT coding book has a section towards its back that tries to breakdown the different levels and explain them in plain English with specific examples.

Correct coding will decrease claims denials and speed up payments, as a billing company that’s what Preferred Health assists our practices to do. But if CMS and the major carriers want to move towards preventive medicine they need to move away form intimidation by CPT code.

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