How Does Medical Billing Work and What Are CPT Codes?
How do doctors and hospitals bill for their services?
For each unique medical service or procedure a doctor offers, the American Medical Association assigns a unique, 5-digit code based on Current Procedural Terminology (CPT) which is used throughout the entire U.S. medical system. The AMA’s CPT Editorial Panel maintains and approves changes to the CPT Code list, and convenes meetings 3 times per year to “ solicit the direct input of practicing physicians, medical device manufacturers, developers of the latest diagnostic tests and advisors from over 100 societies representing physicians and other qualified health care professionals.”
Insurance companies, Medicare, and other payors each make their own agreements with medical providers for the prices they will pay for services, and these prices are each tied to a CPT code. The codes within each section are further broken down into subsections based on what field of healthcare and/or what part of the body each procedure applies to. In some cases, 2-digit modifiers are added on to the 5-digit codes, to specify details such as whether multiple iterations of the same procedure were performed. Category I CPT codes, the most common category, are completely numeric and are grouped numerically into six broad sections as follows:
- 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
What does this practically mean for patients?
Because office visits for new patients generally require more time and paperwork than follow-up visits, new patient visits cost more than follow-up visits for the same “level” of complexity. A “new patient” is defined as “one who has not received any professional services from the physician, or another physician of the same specialty who belongs to the same group practice, within the past three years.” The CPT code system allows for five “levels” of office visits with a primary care physician, based on the number of services rendered and the complexity of the decision-making processes involved. Services such as prescription medications, vaccines, surgical operations, and lab work are billed separately from basic office visits. The following tables show guidelines for the appropriate CPT codes for new and existing patient office visits:
Some doctors may refuse to accept Medi-Cal or certain types of insurance for financial reasons; others may belong to concierge or other group practices that preclude their ability to accept self-pay patients. Before seeing a doctor, make sure that he or she will accept your preferred form of payment. Self-pay patients have reason for optimism, because many clinics offer discounts on a sliding scale based on income and many physicians offer discounts of 30% or more to those who pay cash in advance of an office visit.
Where can I find pricing for medical services?
Increased transparency in pricing benefits both doctors and patients — doctors can charge enough to cover their own costs and earn a living, while patients can choose the doctors who offer the best value for their money. However, this pricing is often not published or is difficult for the average consumer to find. Sami-Aid is taking the lead on this issue in an effort to revolutionize the healthcare industry.