How to Assign CPT Codes and Fee Schedules in Medical Billing - dummies

How to Assign CPT Codes and Fee Schedules in Medical Billing

To get your provider paid in medical billing, you’ve got to start somewhere. Look no further than the CPT (procedure) codes and associated fee schedules you submit on each claim. The more accurately you assign these codes, the more money the payer sends to the provider.

But the earning potential of each claim depends on much more than just assigning codes and crossing your fingers. Instead, your coding must be accurate, without under-coding (leaving billable codes off of the claim) or up-coding (submitting codes that are not supported by the medical record), both of which can be considered fraudulent billing.

The magical little codes that help you turn patient encounters into cash for your provider are the most powerful part of each claim you code. They help prove to a payer that a medical product or service should be paid for.

Each payer assigns a specific dollar amount to each CPT code; this lets the payer know how much to pay for the service rendered. Put all the codes and all their associated fees in a list, and you have a fee schedule.

Medical fee schedules are built from CPT codes that are often either priced individually or categorized into tiers:

  • Fee schedules with individual pricing: Medicare and other payers, such as Tricare, price codes individually, and their fee schedules list each individual code and the payment assigned to that code.

  • Fee schedules with categorized pricing: These contracts are built around a tier system that groups procedural codes into specific tiers and assigns payment obligation to each tier. The procedures within each tier are normally of similar complexity and require a similar level of time, skill, and expertise. Each payer has its own tier system, although the more complex procedures earn higher reimbursement from the majority of commercial payers.