An Inside Look at How the CPT Is Kept Balanced and Current

“CPT is used very frequently to track the services and total work physicians and other providers in otolaryngology perform,” explained Dr. Waguespack, in this instance referring to Category I CPT codes, which encompass services and procedures, devices, and drugs, and are billable for reimbursement. Category II codes are not billable for reimbursement, as they are used for reporting performance measures, the data from which are used to help establish and improve quality of care. Category III codes are used for reporting emerging technologies and are meant to exist in this category up to a maximum of five years before they either “graduate” to Category I or are removed.

Although CPT codes were always meant as a vehicle for standardizing medical services rendered, it wasn’t until the early 1990s that the valuation process for coding became standardized with the resource-based relative value scale (RBRVS, as it is commonly known). “Each Category 1 code has a value assigned, measured in relative value units (RVUs),” Dr. Waguespack said. “The total RVU value is composed of physician work (wRVUs), practice expense (PE RVUs), and a small added amount representing professional liability. Physician productivity is often measured in terms of wRVUs, and one’s salary or payment is frequently derived from a formula based on this number by the academic or private practice in which one works.”

Physician fee schedules are built on CPT codes, and collections for physician services are based largely on the corresponding RVUs assigned to each code. “Most payers reimburse on a multiple of the RVU value,” said Dr. Waguespack. “CMS (Centers for Medicare and Medicare Services) sets the dollar amount of the multiplier for the Medicare program, and most commercial carriers set theirs at a percentage above, or below, Medicare’s.” It’s important to remember that “simply having a code does not, for many payers, automatically guarantee reimbursement,” he said. “Each carrier has a process to determine the medical necessity of services represented in the CPT book.”

Navigating the System

Today, physicians come into their field with some awareness of the CPT code set, but a learning curve remains. “Unfortunately, the nature of billing and reimbursement still isn’t greatly appreciated during stages of training,” said James Lin, MD, otolaryngologist and associate professor at the University of Kansas Medical Center in Kansas City. “Once a physician or provider becomes responsible for submitting bills for medical services, it is a rude awakening because they learn that on the one hand, if they play it too safe and underreport (or underbill), there is a risk of leaving money on the table, but being aggressive runs risks related to fraud claims and lack of recoupment of money by payers.”