Understanding Healthcare Coding Systems

At BillCare, success means that multiple types of medical codes need to be used, because unfortunately there’s no single magic code that works for everything. Each code has its own specific and essential function in the healthcare billing process, and with BillCare, we use four different types: CPT, HCPCS Level II, ICD-10-PCS, and ICD-10-CM.

Looks confusing? Don’t panic - we’ve got you. This page will go through each type, and explain why they matter.

1. Current Procedural Terminology (CPT) Codes

CPT codes are maintained by the American Medical Association (AMA) and are used primarily for outpatient procedures and services. They help doctors and healthcare professionals document the care they gave to a patient in a way that insurance companies can understand and pay for. They can be classified into three categories:

• Category I: Most commonly used codes for procedures, services, and evaluations

• Category II: Supplemental tracking codes for performance measurement

• Category III: Temporary codes for emerging technologies and procedures

2. Healthcare Common Procedure Coding System (HCPCS) Level II

HCPCS Level II codes are used for products, supplies, and services not covered by CPT codes.

• Medical Equipment: Wheelchairs, hospital beds, oxygen equipment

• Medical Supplies: Bandages, catheters, diabetic supplies

• Non-physician Services: Ambulance services, rehabilitation services

• Medications: Drugs that cannot be self-administered

3. ICD-10-CM (Clinical Modification)

ICD-10-CM codes are used for diagnostic coding in all healthcare settings.

• Structure: Alphanumeric codes with up to 7 characters

• Categories: Covers diseases, signs and symptoms, abnormal findings, and external causes

• Usage: Required for all HIPAA-covered entities

4. ICD-10-PCS (Procedure Coding System)

ICD-10-PCS codes are used for inpatient procedure coding in hospital settings.

• Structure: 7 characters representing different aspects of the procedure

• Specificity: Highly detailed coding system for precise procedure documentation

• Usage: Exclusively for inpatient hospital procedures

Specialty-Specific Coding Systems

Mental Health and Behavioral Codes

• DSM-5 Codes: Diagnostic codes for mental health conditions

• Behavioral Health Modifiers: Special codes for therapy sessions and interventions

Dental Codes

• CDT Codes: Current Dental Terminology for dental procedures and services

• Universal Numbering System: For identifying specific teeth and areas of the mouth

Pharmacy Codes

• NDC Codes: National Drug Codes for medication identification

• RxNorm: Standardized nomenclature for clinical drugs

Laboratory Codes

• LOINC: Logical Observation Identifiers Names and Codes for lab tests

• Clinical Laboratory Fee Schedule Codes: For laboratory test billing

Revenue Codes

These codes are used by hospitals to identify specific departments, services, or units where services were rendered.

• Institutional Services: Room and board, emergency department

• Ancillary Services: Laboratory, radiology, pharmacy

Modifiers

Modifiers are used to provide additional information about a service or procedure.

• CPT Modifiers: Two-digit numbers that modify the meaning of CPT codes

• HCPCS Modifiers: Two-character codes that provide additional information

🤔Why does it matter?

As a patient, you might not see these codes on your paperwork, but they directly affect your care and your wallet. They help make sure that the services and medications you receive are covered by your insurance, and that your claims are processed smoothly. Knowing a bit about these codes can also help you better understand your medical bills, and catch potential errors in your explanation of benefits statements.

🧠 The Patient’s Guide to Healthcare Codes: What’s in a Code?

Ever looked at a medical bill and thought, “What do all these letters and numbers mean?”

You’re not alone—and we’re here to decode the code!

This guide will help you understand how doctors and hospitals use codes to describe what’s wrong with you, what they did to help, and what it all costs. 🎯

🎭 Meet the Code Family

Think of the healthcare coding system like a giant emoji keyboard—but instead of smiley faces, we’ve got codes for sniffles, surgeries, and stethoscopes.

📋 CPT Codes: The “What Did the Doctor Do?” Code

CPT = Current Procedural Terminology

Used mostly for outpatient visits, checkups, and procedures like X-rays or stitches.

Example: Meet Linda

Linda has arthritis, and is experiencing particularly painful and stiff knees. She goes to the hospital, where a doctor gives her a steroid injection in her knee to relieve the pain. The CPT code for this specific type of injection is 20610, which the doctor records and then submits to medical insurers. When insurers see code 20610, they immediately know exactly what procedure was performed, and know how to bill accordingly.

Other examples of common codes:

• sore throat → CPT Code 99213

• EKG → CPT Code 93000

Fun Fact:

Some CPT codes are for new stuff that’s still being tested, like robotic surgeries. These are Category III codes—like beta-testing a video game!

💳 HCPCS Level II: The “Supplies and Services” Code

These are like the Amazon cart for your care: all the stuff used, from wheelchairs to bandages.

🛒 Example:

• You needed crutches → E0114

• You got an ambulance ride → A0427

• Medicare paid for your oxygen tank → E1390

Easy Trick:

CPT = what was done

HCPCS = what was used

🧬 ICD-10-CM: The “What’s Wrong With You” Code

ICD = International Classification of Diseases

CM = Clinical Modification (aka U.S. version)

These are the diagnosis codes, telling insurance what condition you had.

🦠 Example:

• You had the flu → J10.1

• You broke your leg → S82.301A

• You had a headache → R51.9

📌 You’ll see these codes on your doctor’s notes, claims, and Explanation of Benefits (EOB).

🏥 ICD-10-PCS: The “What Happened in the Hospital” Code

Only for inpatient (overnight) hospital procedures.

🔬 Example:

• You had your appendix removed → 0DTJ0ZZ

👀Other Codes You Might See

🧠 Mental Health

• DSM-5: The psychologist's version of ICD (The “What’s Wrong With You?” code)

• Example: Generalized Anxiety → F41.1

🦷 Dental

• CDT: Dental cleaning → D1110

• “Tooth #30” = bottom right molar in the Universal Numbering System

💊 Pharmacy

• NDC: Every medication has its own barcode-style ID

• Example: Generic ibuprofen → 00781-1506-10

🧪 Lab Tests

• LOINC: For labs like cholesterol, COVID, and glucose

• Example: Fasting blood glucose → 1558-6

💰 Revenue Codes: Where It All Happened

Hospitals also use “revenue codes” to tell your insurer where the service happened.

🏨 Examples:

• 0450: Emergency Room

• 0300: Lab Services

• 0250: Pharmacy

🔧 Modifiers: The Fine Print

Modifiers add context to CPT or HCPCS codes.

📝 Examples:

• 25: The doctor did a check-up and a procedure in the same visit

• LT: Left side of the body

• RT: Right side

It’s like ordering a sandwich with extra avocado 🥑—the modifier adds detail.

📚 Real-Life Example: A Day at the Doctor’s Office

Let’s say you went in for a twisted ankle.

Here’s what your claim might look like:

✅ Best Practices for You (The Patient)

• Check Your Bills: Ask your provider for a “coded” itemized bill and Google the codes to understand your charges.

• Dispute Errors: A wrong code = a wrong bill. Don’t be afraid to speak up!

• Know What’s Covered: Insurance may deny claims if codes don’t match your benefits.

• Track Your Care: Keeping a record of codes can help you manage chronic conditions and file future claims.

🧡 Final Thoughts

Healthcare coding can seem like a secret language, but now you’re in the know.

Think of it like subtitles for your healthcare story—every number and letter tells a part of what happened, how it was treated, and what it costs.

📥 Bonus: Tools You Can Use

• Find-A-Code – Look up codes for free

• CMS.gov – Official Medicare coding guidance

• GoodRx – Check NDC codes + prescription prices

• Ask Your Doctor: “Can I get the codes used for today’s visit?”