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History and Development of CPT


CPT an acronym of Current Procedural Terminology involves a group of services or procedures performed by physicians and non-physicians were first developed by American Medical Association in the year 1966. The first edition consists of two to four numeric characters. Initially the purpose of the CPT development is to serve as a type of shorthand for simplifying physicians skills in terms of Medical records or the procedures performed and to make these ease and understandable for the record clerks. In these initial stages of development the role of CPT has nothing to do with the insurance reimbursement.

There was a significant development in the introduction of the second edition in 1970, where the codes consists of 5 digits which includes the lab procedures. It was in the year the 1983 where Health Claim Financial Administration HCFA, now called as Centres of Medicare and Medicaid Services, CMS, merged CPT with its own Common Procedure Coding System (HCPCS) and mandated that CPT to be used for all Medicare billing. The CPT system, as developed and maintained by the AMA, is governed by the CPT editorial panel, a group of 16 individuals (virtually all physicians) who are empowered to make final decisions with regard to the content of CPT.

Every year there would be a change in the CPT codes either deleted or revised or new codes added which would be effective from Jan' 01. The process of generating a new code or revising an existing one usually begins with a query to the AMA CPT coding office. Requests for changes may come from physicians, medical societies, manufacturers, billing services, hospital coders, or any other interested party.


The Healthcare Common Procedure Coding System (HCPCS) is a set of health care procedure codes based on the American Medical Association's Current Procedural Terminology (CPT). Commonly pronounced Hick-Picks. This system is a uniform method for health care providers and medical suppliers to report professional services, procedures, and supplies. The CMS developed this system in 1983 to:

1.Meet the operational needs of Medicare/Medicaid.

2.Coordinate government programs by uniform application of CMS policies.

3.Allow providers and suppliers to communicate their services in a consistent manner.

4.Ensure the validity of profiles and fee schedules through standardized coding.

5.Enhance medical education and research by providing a vehicle for local, regional, and national utilization comparisons.

HCPCS Levels of Codes

The HCPCS system consists three levels of codes. The National Level II codes are commonly referred to as HCPCS Level II codes or just HCPCS codes.

Level I - CPT Book: Level I is the American Medical Association's CPT Book (Current Procedural Terminology, Fourth Edition), which was developed and is maintained by the AMA. CPT lists five digit codes with descriptive terms for reporting services performed by health care providers and is the country's most widely accepted coding reference. Procedures are first grouped within six major sections: Evaluation and Management (E/M), Anesthesiology, Surgery, Radiology, Pathology and Laboratory, and Medicine.

Level II - HCPCS /National Codes: The CPT Book does not contain all the codes needed to report medical services and supplies, and this prompted the Centers for Medicare and Medicaid Services or CMS to develop the second level of codes. The codes begin with a single letter (A through V) followed by four numeric digits. They are grouped by the type of service or supply they represent. The codes are updated annually. HCPCS/National codes are now required for reporting most medical services and supplies provided to Medicare and Medicaid patients. An increasing number of private insurance carriers are also encouraging the use of HCPCS/National codes.

Level III - Local Codes: The third level contains codes assigned and maintained by individual state Medicare carriers. Like Level II, these codes begin with a letter (W through Z) followed by four numeric digits, but the most notable difference is that these codes are not common to all carriers. Individual carriers assign these codes to describe new procedures that are not yet available in Level I or II.

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