The Alphabet Soup of Medical Coding: Decoding ICD, CPT, and HCPCS

If you’re new to medical coding, you’ve likely noticed a jumble of acronyms being tossed around: ICD, CPT, and HCPCS. To someone just starting out, these might seem like a confusing alphabet soup of terms, but they are the fundamental building blocks of medical coding. Each one serves a distinct purpose in healthcare reimbursement, ensuring that diagnoses, procedures, and medical supplies are appropriately reported and billed. In this blog post, we’ll help you decode these acronyms, explaining what they mean and what the differences are between ICD, CPT, and HCPCS, which is essential for any medical coder.

ICD: The International Classification of Diseases

ICD stands for the International Classification of Diseases, a coding system maintained by the World Health Organization (WHO). The ICD is used worldwide to classify and report diseases and health conditions. In the United States, we use the 10 revision and Clinical Modification version of this system (ICD-10-CM), which was implemented in 2015.

ICD-10-CM codes are primarily used to document diagnoses. They provide detailed information about a patient’s condition, the cause of illness or injury, and any contributing factors. For example, an ICD-10-CM code will indicate if a patient is diagnosed with diabetes, suffers from a broken arm, or is recovering from a stroke. The United States also has an ICD-10 system from reporting procedures. The International Classification of Diseases, 10th Revision, Procedure Coding System (ICD-10-PCS) is used to document procedures and services provided to hospital inpatients. ICD-10-PCS codes provide detailed information about the objective of the procedure, the anatomic site of the procedure, the approach used, and devices, substances or technologies employed to facilitate the procedure.

Key Features of ICD Codes:

• ICD-10-CM: Used for diagnosis coding in outpatient and inpatient settings.
  • Structure: ICD-10-CM codes are typically 3 to 7 characters long, with each character providing specific information about the diagnosis. For example, "I10" represents essential (primary) hypertension.
  • Example of ICD-10-CM Code: E11.9: Type 2 diabetes mellitus without complications.
• ICD-10-PCS: Used for coding inpatient procedures in hospitals.
  • Structure: ICD-10-PCS codes are 7 characters in length. Each character is an axis of classification that specifies information about the procedure performed.
  • Example of ICD-10-PCS Code: 0FT44ZZ: Laparoscopic resection of gallbladder

CPT: Current Procedural Terminology

CPT stands for Current Procedural Terminology and is the code set used to document outpatient medical procedures and services. Developed by the American Medical Association (AMA), CPT codes describe the services that healthcare providers, including both physicians and other qualified healthcare professionals as well as facilities, provide, such as surgeries, consultations, and diagnostic tests. Unlike ICD-10-CM codes, which describe the why (the diagnosis), CPT codes describe the what (the procedure or service provided). CPT codes are used to report outpatient services. This includes services provided by hospitals or other facilities to patients who are not admitted as an inpatient and serviced provided by physicians to their patients whether their patient is receiving outpatient services or has been admitted as an inpatient. CPT codes are critical to both physician and facility outpatient billing. Without accurate CPT codes, healthcare providers cannot be properly reimbursed for the services they deliver.

Key Features of CPT Codes:

• Three Categories: CPT codes are divided into three categories:
  • Category I: Codes for procedures and services, such as surgeries or office visits (e.g., 99213 for an established patient office visit).
  • Category II: Optional codes for tracking performance measures.
  • Category III: Temporary codes for emerging technologies and experimental procedures.
• Modifier Use: CPT codes often require modifiers (e.g., 25, 59) to clarify the specifics of a service or procedure, such as when multiple procedures are performed during a single visit.
• Example of CPT Code:
  • 99213: Office or other outpatient visit for the evaluation and management (E/M) of an established patient, typically involving low to moderate complexity medical decision-making.

HCPCS: Healthcare Common Procedure Coding System

HCPCS (pronounced "hick-picks") stands for the Healthcare Common Procedure Coding System, and is used to code medical supplies, equipment, and certain services not covered under the CPT system. While CPT codes cover most medical procedures and services, HCPCS is used for coding things like durable medical equipment (e.g., wheelchairs), ambulance rides, prosthetics, and some medications.

HCPCS is divided into two levels:

• Level I: These codes are simply CPT codes.
• Level II: These are alphanumeric codes used to report non-physician services, medical supplies, equipment, and drugs administered by providers.

Key Features of HCPCS Codes:

• Level II Codes: Primarily used for billing supplies, equipment, and services that aren't included in CPT.
• Alphanumeric: HCPCS Level II codes are alphanumeric, meaning they contain both letters and numbers, unlike CPT codes that are purely numeric.
• Example of HCPCS Code:
  • E0118: Crutches, underarm, spring assisted, including tips and handgrips.

How ICD, CPT, and HCPCS Work Together

Now that you know what ICD, CPT, and HCPCS codes represent individually, it’s important to understand how they work together in the real world. When a patient visits a healthcare provider, both diagnosis and procedure information must be captured for billing purposes. For example, let’s say a patient visits their doctor because of knee pain and ends up needing an MRI to further investigate the problem. Here’s how the coding would break down:

1. ICD-10-CM Code (Diagnosis): The coder would use ICD-10-CM to capture the reason for the visit — in this case, a diagnosis of knee pain (M25.561: Pain in right knee).
2. CPT Code (Procedure): The coder would use a CPT code to document the MRI procedure (73721: Magnetic resonance imaging, any joint of the lower extremity, without contrast).
3. HCPCS Code (Supplies/Services): If the patient required a medical brace or crutches after the MRI, a HCPCS code might be used to bill for that equipment (E0114: Crutches, underarm, wood, adjustable or fixed, with pads, tips, and handgrips).

Each of these codes serves a specific purpose, and together they ensure that the healthcare provider is reimbursed appropriately for the services provided to the patient.

Why Coders Need to Know All Three Code Sets

To be successful as a medical coder, it’s essential to understand how to work with ICD, CPT, and HCPCS codes. Many coding jobs will require you to be proficient in all three systems, especially in environments like hospitals or multi-specialty clinics where both diagnoses and procedures are documented and billed.

Mastering the nuances of these coding sets will allow you to:

• Accurately capture diagnoses and procedures, ensuring proper billing and reimbursement.
• Prevent claim denials by using the right codes and modifiers.
• Stay compliant with healthcare regulations and payer guidelines.

Conclusion

While ICD, CPT, and HCPCS may seem like a confusing alphabet soup at first, they are the backbone of the medical coding process. Each code set plays a distinct role in capturing diagnoses, procedures, and medical supplies, ensuring that healthcare providers get paid for their services.

Whether you're a beginner coder or a seasoned professional looking to brush up on your skills, understanding how these three code sets work together will help you succeed in your career and make sure that the healthcare system runs smoothly.

Ready to dive deeper into medical coding? Explore HIAlearn’s courses to master the essential code sets and take your coding skills to the next level.

The information contained in this blog post is valid at the time of posting. Viewers are encouraged to research subsequent official guidance in the areas associated with the topic as they can change rapidly.