CPT: what it is and how it works

Have you ever wondered where Current Procedural Terminology (CPT^®) codes originate? CPT codes are the backbone of communication between physicians and other providers and third parties concerning most services in health care.

They're also a fine example of collaboration in medicine. Representatives from across the spectrum of the profession help evaluate these codes, and all physicians have a voice in the process of developing and maintaining them.

Created by the AMA more than four decades ago, CPT codes provide a uniform vocabulary that accurately describes medical, surgical, and diagnostic services, and they serve as the most widely accepted medical classification used to report medical procedures and services under public and private health insurance programs. Each year, the AMA prepares an annual publication that makes changes corresponding with significant updates in medical technology and practice. The most recent version, "CPT 2007," contains more than 8,600 codes and descriptors.

CPT codes are updated annually and take effect Jan. 1 of every year. The AMA prepares each annual update so new CPT books are available each fall, preceding the effective date, to allow for implementation. Certain codes are "early released" for reporting either Jan. 1 or July 1 of a given CPT cycle.

The AMA developed and published the first edition of CPT codes in 1966 and released subsequent editions throughout the 1970s. In 1983, the Health Care Financing Administration, now named the Centers for Medicare and Medicaid Services (CMS), adopted CPT as part of its Healthcare Common Procedure Coding System (HCPCS). HCPCS then began being used to report services for Medicare Part B.

In October 1986, state Medicaid agencies began using HCPCS in the Medicaid Management Information System. Less than a year later, as part of the Omnibus Budget Reconciliation Act, CPT was used for reporting outpatient hospital surgical procedures.

In the early '90s, the AMA formed the AMA/Specialty Society Relative Value Scale Update Committee to act as an expert panel in developing recommendations to CMS for relative values for new or revised CPT codes. The relative value of each service is multiplied by geographic practice cost indices for each Medicare locality and then translated into a dollar amount (Medicare fee) by an annually adjusted conversion factor.

Today, CPT is used extensively throughout the United States as the preferred system of coding and describing health care services. Earlier this year, the AMA won an important legal battle concerning the integrity and independence of the process by which CPT codes are used.

Maintaining these codes is a joint effort led by the 17-member CPT Editorial Panel, which meets three times a year (the next meeting will take place this February) and considers proposals for changes to CPT. The editorial panel is supported by the CPT Advisory Committee, which comprises representatives of more than 90 medical specialty societies and other health care professional organizations, and the AMA Department of CPT Editorial Research and Development, which provides coding expertise.

Physicians can have a significant influence on CPT by proposing changes to existing codes or requesting new codes. Such open peer review is essential to ensuring that CPT coding accurately reflects today's medical practices and provides reliable nationwide communication among physicians and others in health care. I can't stress enough the importance of physician involvement in this review process.

Specific procedures exist for addressing suggestions to revise CPT, adding or deleting a code, or modifying existing classifications, and a comprehensive explanation of how a code becomes a code is available on the AMA's Web site.

In addition, many AMA products and services are available to help physicians understand and use CPT codes, including "CPT Assistant," a monthly newsletter; "CPT Principles of Coding," an educational primer covering the basic concepts of CPT coding; "CPT Errata," which helps physicians stay up-to-date on corrections to CPT books; and an annual CPT coding symposium, which took place just last month. The AMA also holds a day-long workshop that offers an insider's view of the rationale for, and application of, numerous changes to CPT codes for 2008.

I encourage you to ask questions and offer suggestions concerning CPT codes and procedures. And please register with the CPT Network, a new system that provides AMA members and subscribers the tools to quickly research a database of commonly asked questions about CPT coding and clinical examples of procedures.

CPT's effectiveness depends on constant updating, and your suggestions are the only way to ensure that it reflects today's medical practices. By working together, we can continue to ensure that all stakeholders in medicine are communicating effectively to provide the best possible care to patients nationwide.

Please send comments, questions, and replies to amaprez@ama-assn.org.