,Basic Current Procedural
Terminology and HCPCS
Coding
2021 Edition
Instructor’s Manual
Gail I. Smith, MA, RHIA, CCS–P
Copyright ©2021 by the American Health Information Management Association. All rights
reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, photocopying, recording or otherwise
without prior permission from the publisher.
,Contents
Learning Objectives ...................................................................................................................................... 3
Key Points for Lecture Notes ........................................................................................................................ 3
Suggested Student Activities and Assignments ............................................................................................ 4
Test Bank (with Key) .................................................................................................................................... 4
Answer Key to Textbook .............................................................................................................................. 5
Chapter 1 Review ..................................................................................................................................... 5
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
,Chapter 1
Introduction to Clinical Coding
This chapter focuses on the following topics:
• Introduction to CPT and HCPCS
• Overview of ICD-10-CM and ICD-10-PCS
• Role of CMS
• Claims submission review
• Purpose of medical necessity
Learning Objectives
• Differentiate between CPT, ICD-10-CM, and ICD-10-PCS
• Identify the purposes and uses of CPT
• Distinguish between CPT and HCPCS (National Codes)
• Define medical necessity
• Link a diagnosis to the appropriate procedure for professional claims
Key Points for Lecture Notes
1. The American Medical Association (AMA) and some third-party payers developed CPT in the
1960s. It was used as a communication tool between third-party payers and physicians. Unlike
ICD-10-CM, CPT was developed for reimbursement purposes.
2. Differentiate between ICD-10-PCS and CPT.
3. It was not until the mid-1980s that hospitals began to use CPT. The Omnibus Budget
Reconciliation Act required that hospitals use CPT to report outpatient services.
4. In the textbook, you will find examples of both UB-04 and CMS-1500 forms. Explain that claim
forms are electronically submitted. CMS-1500 forms are used only in physician offices. UB-04 is
the billing form for all hospital services: inpatient, outpatient, emergency, clinic, and so on.
Introduce the HIPAA 5010 electronic transaction standards and how they paved the way for ICD-
10-CM/PCS.
5. Some of procedure codes for routine services in the hospital are contained in a computerized file
called a chargemaster. For example, consider a patient seen as an outpatient for a chest x-ray.
Almost all facilities have the CPT codes for chest x-ray in the chargemaster; therefore, coders
rarely assign these codes.
6. HCPCS is the most confusing part of the unit. When CMS decided to use CPT for reimbursement
to hospitals and physician offices, there was one big hurdle: not everything that is reimbursed by
Medicare or Medicaid is contained in CPT (for example, drugs, supplies, and ambulance
services). Keep in mind that CMS does not own CPT; therefore, CMS cannot control its contents.
To supplement CPT, CMS wrote its own book of codes called Level II National Codes. When
billing Medicare for an ace bandage given to a patient, the coder would have to reference Level II
codes, because there are no codes in CPT for supplies.
7. Provide a list of services not in CPT.
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
,8. CMS subcontracts with local carriers (Medicare Administrative Contractors [MACs]) to manage
claims processing in the geographic area.
9. Sometimes, the terms CPT and HCPCS are used interchangeably, but that is not technically
correct.
10. Call attention to the fact that CPT and HCPCS are used to identify procedure codes, and ICD-10-
CM continues to be the coding system for all healthcare providers for diagnosis codes. ICD-10-
CM describes why services were performed, and CPT and HCPCS describe what services were
performed.
Suggested Student Activities and Assignments
1. Distribute a completed claim form and ask students to identify the “patient story” from the coding
assignment. Indicate whether the codes support medical necessity.
2. Research AHIMA certification content outlines for CCA, CCS, and CCS-P for a global
perspective of the role of a coding professional.
3. Research policy decisions published by insurance carriers that reveal medical necessity.
Test Bank (with Key)
Instructions: Choose the best answer for each of the following questions.
1. A patient was seen in a clinic for a laceration of the elbow. The wound required suturing. On the
electronic claim form, which of the following types of codes would be assigned to represent the
diagnosis of laceration?
a. ICD-10-CM
b. CPT
c. National Codes
d. Level III Codes
2. Which of the following code sets would be used to capture a coronary artery bypass procedure for
inpatient hospital services?
a. CPT-4
b. HCPCS
d. ICD-10-PCS
d. ICD-10-CM, Volume 3
3. HCPCS was developed by:
a. American Medical Association
b. World Health Organization
c. Centers for Medicare and Medicaid Services
d. American Hospital Association
4. What codes will the hospital use on its billing form to represent the diagnosis of fractured
humerus?
a. CPT
b. HCPCS
c. ICD-10-CM
d. DSM-IV
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
,5. Which of the following procedures or services could not be assigned a code with CPT?
a. Cholecystectomy
b. Anesthesia
c. Wound warming device
d. Glucose tolerance test
6. Which of the following groups or organizations is responsible for maintaining the HCPCS Level
II codes?
a. American Medical Association
b. American Hospital Association
c. Centers for Medicare and Medicaid Services
d. Blue Cross/Blue Shield
7. The CPT book is updated:
a. As needed
b. For use in January
c. Monthly
d. For use in October
8. The CPT manual is published and maintained by the:
a. American Medical Association
b. US Department of Health and Human Services
c. Centers for Medicare and Medicaid Services
d. American Hospital Association
9. Which of the following diagnoses would not meet medical necessity for a patient needing an
ultrasound?
a. Abdominal pain
b. Appendicitis
c. Ruptured ovarian cyst
d. Gingivitis
10. Which of the following diagnoses would not meet medical necessity for a patient needing
a chest x-ray?
a. Pneumonia
b. Atherosclerosis
c. Emphysema
d. Pneumothorax
Answer Key to Textbook
Chapter 1 Review
1. The American Medical Association (AMA) updates the CPT codes.
2. Centers for Medicare and Medicaid Services (CMS)
3. Diagnosis code set (ICD-10-CM)
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
,4. a. ICD-10-CM
b. CPT
c. CPT
5. All of the diagnoses except G83.84, Todd’s paralysis, would support medical necessity.
6. c. 87172, Pinworm exam
7. Procedure code 11440 is linked with diagnosis code A (D22.30). Procedure code 82951 is linked
with diagnosis code B (R73.9).
Note: Some carriers allow you to link more than one reference number in block 24E, whereas some
payers require just one. When reporting more than one code on a CMS-1500 claim, enter the
code with the highest fee in line 1 of block 24 and the remaining codes in descending order of
charges.
8. The patient had a cataract of the left eye, and the surgeon performed an extraction of the cataract.
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
,Basic Current Procedural
Terminology and HCPCS
Coding
2021 Edition
Instructor’s Manual
Gail I. Smith, MA, RHIA, CCS–P
Copyright ©2021 by the American Health Information Management Association. All rights
reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, photocopying, recording or otherwise
without prior permission from the publisher.
Terminology and HCPCS
Coding
2021 Edition
Instructor’s Manual
Gail I. Smith, MA, RHIA, CCS–P
Copyright ©2021 by the American Health Information Management Association. All rights
reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, photocopying, recording or otherwise
without prior permission from the publisher.
,Contents
Learning Objectives ...................................................................................................................................... 3
Key Points for Lecture Notes ........................................................................................................................ 3
Suggested Student Activities and Assignments ............................................................................................ 4
Test Bank (with Key) .................................................................................................................................... 4
Answer Key to Textbook .............................................................................................................................. 5
Chapter 1 Review ..................................................................................................................................... 5
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
,Chapter 1
Introduction to Clinical Coding
This chapter focuses on the following topics:
• Introduction to CPT and HCPCS
• Overview of ICD-10-CM and ICD-10-PCS
• Role of CMS
• Claims submission review
• Purpose of medical necessity
Learning Objectives
• Differentiate between CPT, ICD-10-CM, and ICD-10-PCS
• Identify the purposes and uses of CPT
• Distinguish between CPT and HCPCS (National Codes)
• Define medical necessity
• Link a diagnosis to the appropriate procedure for professional claims
Key Points for Lecture Notes
1. The American Medical Association (AMA) and some third-party payers developed CPT in the
1960s. It was used as a communication tool between third-party payers and physicians. Unlike
ICD-10-CM, CPT was developed for reimbursement purposes.
2. Differentiate between ICD-10-PCS and CPT.
3. It was not until the mid-1980s that hospitals began to use CPT. The Omnibus Budget
Reconciliation Act required that hospitals use CPT to report outpatient services.
4. In the textbook, you will find examples of both UB-04 and CMS-1500 forms. Explain that claim
forms are electronically submitted. CMS-1500 forms are used only in physician offices. UB-04 is
the billing form for all hospital services: inpatient, outpatient, emergency, clinic, and so on.
Introduce the HIPAA 5010 electronic transaction standards and how they paved the way for ICD-
10-CM/PCS.
5. Some of procedure codes for routine services in the hospital are contained in a computerized file
called a chargemaster. For example, consider a patient seen as an outpatient for a chest x-ray.
Almost all facilities have the CPT codes for chest x-ray in the chargemaster; therefore, coders
rarely assign these codes.
6. HCPCS is the most confusing part of the unit. When CMS decided to use CPT for reimbursement
to hospitals and physician offices, there was one big hurdle: not everything that is reimbursed by
Medicare or Medicaid is contained in CPT (for example, drugs, supplies, and ambulance
services). Keep in mind that CMS does not own CPT; therefore, CMS cannot control its contents.
To supplement CPT, CMS wrote its own book of codes called Level II National Codes. When
billing Medicare for an ace bandage given to a patient, the coder would have to reference Level II
codes, because there are no codes in CPT for supplies.
7. Provide a list of services not in CPT.
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
,8. CMS subcontracts with local carriers (Medicare Administrative Contractors [MACs]) to manage
claims processing in the geographic area.
9. Sometimes, the terms CPT and HCPCS are used interchangeably, but that is not technically
correct.
10. Call attention to the fact that CPT and HCPCS are used to identify procedure codes, and ICD-10-
CM continues to be the coding system for all healthcare providers for diagnosis codes. ICD-10-
CM describes why services were performed, and CPT and HCPCS describe what services were
performed.
Suggested Student Activities and Assignments
1. Distribute a completed claim form and ask students to identify the “patient story” from the coding
assignment. Indicate whether the codes support medical necessity.
2. Research AHIMA certification content outlines for CCA, CCS, and CCS-P for a global
perspective of the role of a coding professional.
3. Research policy decisions published by insurance carriers that reveal medical necessity.
Test Bank (with Key)
Instructions: Choose the best answer for each of the following questions.
1. A patient was seen in a clinic for a laceration of the elbow. The wound required suturing. On the
electronic claim form, which of the following types of codes would be assigned to represent the
diagnosis of laceration?
a. ICD-10-CM
b. CPT
c. National Codes
d. Level III Codes
2. Which of the following code sets would be used to capture a coronary artery bypass procedure for
inpatient hospital services?
a. CPT-4
b. HCPCS
d. ICD-10-PCS
d. ICD-10-CM, Volume 3
3. HCPCS was developed by:
a. American Medical Association
b. World Health Organization
c. Centers for Medicare and Medicaid Services
d. American Hospital Association
4. What codes will the hospital use on its billing form to represent the diagnosis of fractured
humerus?
a. CPT
b. HCPCS
c. ICD-10-CM
d. DSM-IV
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
,5. Which of the following procedures or services could not be assigned a code with CPT?
a. Cholecystectomy
b. Anesthesia
c. Wound warming device
d. Glucose tolerance test
6. Which of the following groups or organizations is responsible for maintaining the HCPCS Level
II codes?
a. American Medical Association
b. American Hospital Association
c. Centers for Medicare and Medicaid Services
d. Blue Cross/Blue Shield
7. The CPT book is updated:
a. As needed
b. For use in January
c. Monthly
d. For use in October
8. The CPT manual is published and maintained by the:
a. American Medical Association
b. US Department of Health and Human Services
c. Centers for Medicare and Medicaid Services
d. American Hospital Association
9. Which of the following diagnoses would not meet medical necessity for a patient needing an
ultrasound?
a. Abdominal pain
b. Appendicitis
c. Ruptured ovarian cyst
d. Gingivitis
10. Which of the following diagnoses would not meet medical necessity for a patient needing
a chest x-ray?
a. Pneumonia
b. Atherosclerosis
c. Emphysema
d. Pneumothorax
Answer Key to Textbook
Chapter 1 Review
1. The American Medical Association (AMA) updates the CPT codes.
2. Centers for Medicare and Medicaid Services (CMS)
3. Diagnosis code set (ICD-10-CM)
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
,4. a. ICD-10-CM
b. CPT
c. CPT
5. All of the diagnoses except G83.84, Todd’s paralysis, would support medical necessity.
6. c. 87172, Pinworm exam
7. Procedure code 11440 is linked with diagnosis code A (D22.30). Procedure code 82951 is linked
with diagnosis code B (R73.9).
Note: Some carriers allow you to link more than one reference number in block 24E, whereas some
payers require just one. When reporting more than one code on a CMS-1500 claim, enter the
code with the highest fee in line 1 of block 24 and the remaining codes in descending order of
charges.
8. The patient had a cataract of the left eye, and the surgeon performed an extraction of the cataract.
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
,Basic Current Procedural
Terminology and HCPCS
Coding
2021 Edition
Instructor’s Manual
Gail I. Smith, MA, RHIA, CCS–P
Copyright ©2021 by the American Health Information Management Association. All rights
reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, photocopying, recording or otherwise
without prior permission from the publisher.
