Basic Coding Terminology

Coding Terms Introduction

Without the present coding system adopted for reporting procedures and diagnosis, both the providers and the payers (insurance carriers) would find it difficult to process and make payment since understanding of the description by the claims processor becomes a problem during processing and would lead to inordinate delays in getting clarifications from providers and so on. Hence the US Department of Health has brought in codes to replace the description in the claim forms making it simpler both for the provider as well as for the claims processor. Hence the advent of Procedure and Diagnosis codes.

Diagnosis: ICD-9-CM Codes

ICD or International Classification of Diseases is a cluster of codes defined to describe the symptoms and ailments of patients. Originally based on a list of codes published by WHO (World Health Organization), this is recognized by the US Department of Health and Human Services. ICD-9-CM refers to International Classification of Diseases, Ninth Revision, Clinical Modification.

ICD-9-CM codes are 3,4 or 5 digit numerical codes from 001 to 999.9. The three-digit code is the parent code giving the name of the disease. The supplemental four or five digit codes under that three-digit code are more specific. When there are more specific codes for a particular disease, we need to use that code only. We should use the three-digit code only where the fourth or fifth digit is not available. In addition there are V-codes and E-codes. V Codes are Supplementary of Factors Influencing Health Status and Contact with Health Services (V01-V82). E Codes are Supplementary Classification of External Causes of Injury and Poisoning (E800-E999).

Procedures: CPT-4, HCPCS & Other Coding Systems

CPT-4 or Current Procedural Terminology is a set of codes defined to describe the procedures/ treatment rendered to the patients. Developed by the American Medical Association, this coding system has been acknowledged by the Health Care Financing Administration and all Insurance Carriers. This is a five digit numeric code starting from 10000-99999. The entire set of codes from 10000-99999 is subdivided into various ranges of codes covering various body sites/ specialty of treatment such as Integumentary, Musculoskeletal, Respiratory, Female Genital, Male Genital, Digestive, Urinary, Cardiovascular & Nervous Systems, Radiology, Nuclear Medicine, Evaluation & Management etc.

HCPCS Codes meaning CMS Common Procedure Coding System are codes designed by the Health Care Financing Administration (CMS). They are alphanumeric codes, which are accepted by certain limited carriers and are used in cases where no appropriate code figures in CPT-4.

ASA Codes developed by American Society of Anesthesiologists are codes that need to be used for anesthesia billing. The codes range from 00100 through 01999. All Medicare carriers and certain Medicaid carriers accept these codes.

Relative Value Units

RVU or Relative Value Units are units assigned to CPT codes for reimbursement. This is brought out by the Omnibus Budget Reconciliation Act of 1989 (OBRA, later amended in 1990). The relative value for each service is the sum of relative value units (RVUs) that reflect the resources involved in furnishing the three components of a physician’s service: (1) Work; (2) Practice Expenses; and (3) Cost of Malpractice insurance.


Modifiers are codes that are used to "enhance or alter the description of a service or supply" under certain circumstances. A modifier provides the means by which the reporting physician can indicate that a service or procedure that has been performed has been altered by some specific circumstance but has not changed in its definition or code. The judicious application of modifiers obviates the necessity for separate procedure listings that may describe the modifying circumstance. Modifiers may be used to indicate to the recipient of a report that:

· A service or procedure has both a professional and technical component.
· A service or procedure was performed by more than one physician and/or in more than one location.
· A service or procedure has been increased or reduced.
· Only part of a service was performed.
· An adjunctive service was performed.
· A bilateral procedure was performed.
· A service or procedure was provided more than once.
· Unusual events occurred.

The following are the most commonly used modifiers:
Professional Component 26
Technical Component TC
Bilateral Procedure 50
Right side of body RT
Left side of body LT
Distinct Procedural Service 59


Facility is the place where the doctor sees the patient. It can be a hospital, a nursing home, a skilled nursing facility, a clinic or even the patient’s home.

Place of Service

Place of Service denotes the place where the service was rendered within the facility. For e.g. the patient may be an inpatient or an outpatient or in an emergency room or in an ambulatory surgical center. Certain carriers adopt the Medicare coding for Place of service while certain others have their own coding systems. For e.g. Medicare adopts the following places of service: Inpatient 21, Outpatient 22, Office Visit 11, Emergency Room 23, Ambulatory Surgical Center 24 and so on.

Type of Service

Type of Service is the specialty in which the service is rendered. For e.g. if the specialty is anesthesia the type of service is 7, if the specialty is radiology the type of service is 4 and so on.

CPT billing codes
CPT codes and HCPCS codes
What is Medical coding

No comments:

Medical Billing Popular Articles