Supplementary medical insurance benefit for physician and supplier services - Medicare and Medicaid Statistical Supplement

Health Care Financing Review, Annual, 1992 by Charles Helbing, John T. Petrie

Leading Medicare physician codes: 1990

Since 1985, all Medicare carriers have been required to use the HCFA's Common Procedure Coding System (HCPCS). HCPCS describes physician and non-physician services and supplies. It was developed to satisfy the operational needs, such as claims processing and payment, of the Medicare and Medicaid programs, and to improve communication and efficiency among providers and payers.

HCPCS was designed with three levels of codes and modifiers. The first level-national codes--contains only the American Medical Association's Current Procedural Terminology, 4th Edition (CPT-4) codes and modifiers; these are all 5-digit numeric codes. The second level--national assignment--contains the codes and modifiers for physician and non-physician services that are not included in CPT-4. These include ambulance, audiology, physical therapy, speech pathology, and vision care, and such supplies as drugs, durable medical equipment, orthotics, and prosthetics and other medical and surgical supplies. These codes are alpha-numeric: The first digit is a letter ranging from A to V followed by four numbers. The third level-local assignment--contains the codes and modifiers for services needed by the individual carrier or State agency to process Medicare and Medicaid claims, and are used for services that are not contained in either of the first two levels. The local codes are also alpha-numeric, but the first digit must be a letter ranging from W to Z followed by four numbers. These codes are not used for items and services not having the frequency of use or general applicability to justify a national code.

More than 10,000 different HCPCS codes are available to physicians and suppliers for billing services covered under SMI. However, a relatively small number of HCPCS codes account for the majority of total allowed charges for Medicare physician and supplier covered services. In 1990, the leading 100 HCPCS codes, based on the amount of allowed charges, accounted for almost 56 percent ($20.8 billion) of all Medicare physician and supplier allowed charges ($37.4 billion).

The 100 leading HCPCS codes that appear in Table 7.17 were selected based on the amount of allowed Medicare physician and supplier charges in 1990. Table 7.17 arrays these codes by the 5 major CPT-4 sections (Medicine; Anesthesiology; Surgery; Radiology; and Pathology and Laboratory) and a sixth major section showing the alpha-numeric codes that supplement CPT-4. Within these major sections, the procedures and services are classified by 63 selected HCPCS code groupings. The individual procedures and services along with their identifying codes are presented in numeric order with one exception: The entire Medicine section (90000 series of codes) has been placed at the beginning of the list just as it appears in CPT-4. Physicians use codes in the Medicine section in reporting a significant portion of their services.

Procedures in the Medicine section accounted for about 38 percent ($14.3 billion) of all Medicare-allowed charges for physician and supplier services ($37.4 billion) in 1990. The majority of these were visits to physicians in their offices and physician follow-up visits to hospital inpatients. The most common medicine procedure was an intermediate office visit (HCPCS code 90060), which accounted for $1.4 billion or 10 percent of all allowed charges for medicine procedures. The five leading medicine HCPCS codes (Figure 7.18) accounted for almost $5 billion in Medicare-allowed charges, which represents 35 percent of all allowed charges for medicine procedures, and about 13 percent of total Medicare-allowed charges for physician and supplier procedures.