Welcome to the Nexus of Ethics, Psychology, Morality, Philosophy and Health Care

Welcome to the nexus of ethics, psychology, morality, technology, health care, and philosophy

Tuesday, May 7, 2013

CPT and ICD: What Are They? Where Do They Come From?

By Samuel Knapp, EdD, ABPP, Director of Professional Affairs
The Pennsylvania Psychologist
May 2013

The Current Procedural Terminology (or CPT) codes are developed by the American Medical Association (AMA) to ensure a common parlance and unitary language for describing services and procedures by physicians and other health care professionals. The CPT coding manual is copyrighted and published by AMA. CPT I Codes are the five-digit codes used to describe medical procedures; CPT II Codes are supplemental codes used to facilitate data collection about the quality of services provided; and CPT III Codes are for experimental procedures where data is still being gathered. HIPAA requires the standardized use of ICD and CPT codes across insurers. Although CPT codes were widely used before the HIPAA requirement, this HIPAA requirement ended the use of local codes.

A panel of the AMA (the Editorial Panel) creates the CPT codes, although it accepts advice from advisory panels. The Editorial Panel consists of 17 members including 11 physicians nominated by specialty groups within AMA; one physician each from the Blue Cross/Blue Shield Association, America’s Health Insurance Plans (a trade association), the Centers for Medicare and Medicaid Services (CMS), and the American Hospital Association; and two other members from the advisory committees to the Editorial Panel. One of the advisory committees is the Health Care Professional Advisory Committee, which consists of 12 organizations whose members are eligible to use CPT codes (audiologists, chiropractors, registered dieticians, nurses, occupational therapists, optometrists, physical therapists, physician assistants, podiatrists, psychologists, social workers, and speech therapists).

The deliberation process is secret. There is no public comment period for the adoption of these codes and no consumer input. All participants are obligated to follow strict standards of confidentiality, and the punishment for breaking confidentiality is to be removed from the process. The AMA is under no obligation to accept the recommendations of groups impacted by the changes in the CPT codes.

Although the Editorial Panel recommends the particular CPT codes, another committee within AMA, the Relative Value Scale Update Committee (RUC; rhymes with truck) recommends Medicare fees to CMS. The recommendations of RUC are based, to a large extent, on surveys conducted by impacted organizations on the relative work effort involved with the procedure. CMS typically accepts 90% to 100% of the recommendations of the RUC. Often commercial insurers set fees by paying a percentage of what Medicare pays.

Medicare payments are based on the resource-based relative value scale (RBRVS), which consists for three factors: work product, practice expense, and professional liability. Work product involves the time, technical skill, and mental effort required to perform a certain procedure. For physicians as a whole, work product consists of 48%, practice expense consists of 47%, and professional liability insurance consists of 4% of the RBRVS. For psychologists the work product is almost 70% of the RBRVS and professional liability is around 1%. Because the portion of the practice expense component for psychologists is so much lower than for physicians, minor changes in the reimbursement formula can impact psychologists quite differently from physicians.

The American Psychological Association (APA) has a representative on the Heath Care Professional Advisory Committee and had input into revising the CPT codes and the RUC process. Representatives from APA are bound by the very strict standards of confidentiality concerning their participation in the process. I have spoken briefly with APA representatives who can describe their involvement only in general terms. Participation in the process should not be interpreted to mean agreement with the recommendations concerning CPT codes or acceptance of payment.

Diseases are classified according to the ICD (International Classification of Diseases), which was developed by the World Health Organization (an affiliate of the United Nations) to gather information world-wide about the prevalence and incidence of diseases. The United States uses the ICD-cm-9, which means it is the 9th edition of the ICD. The cm refers to “clinical modification,” which is a modification of the ICD for the United States. The rest of the world uses the ICD-10, and the United States will adopt it by October 1, 2014.

Currently, the diagnostic numbers in the DSM-IV correspond to the ICD-9 codes (with a few exceptions). So psychologists can use the DSM-IV coding system and still conform to the ICD-9 system almost all of the time. However, at this time, the coding system in the DSM-V does not correspond to the numbers that would be used in the ICD-10. Although psychologists may wish to learn about the DSM-V as a way to keep abreast of new developments in the area of diagnostics, they will continue to bill only with the ICD-9 (DSM-IV-TR) numerical codes even after the DSM-V is released. Psychologists and other health care professionals will begin coding with the ICD-10 in October 2014.