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Does Medicare use CPT codes for payment?

Written By: Jason Shafrin - Jul• 13•10

For Part B services, Medicare pays physicians based on the services they provide.  The American Medical Association (AMA) developed Current Procedural Terminology (CPT) codes to create a taxonomy of procedures that physicians perform.  Does the Centers for Medicare and Medicaid Services (CMS) use these codes for payment?

The answer is yes and no.  Officially, CMS uses Healthcare Common Procedure Coding System (HCPCS) codes.  These codes are used to classify about 6,700 distinct services. Although CMS does not officially use CPT codes, the HCPCS are closely related to CPT codes.  In fact, there are two sets of HCPCS codes. “The first set, HCPCS Level I, are based on and identical to CPT codes…Level II HCPCS codes are used by medical suppliers other than physicians, such as ambulance services or durable medical equipment.”

The Medicare Administrative Contractor (MAC) actually process the payment for these claims.  There are 4 MACs for durable medical equipment claims and 15 MACs for processing Part A and B claims.

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  2. Kathryn says:

    Hi, quick question for you — Are you aware of AMA blocking the adoption of new technologies by refusing to create new CPT codes? I heard in passing about a molecular diagnostic that would reduced the need for some surgical biopsies, but that cardiologists were attempting to block CPT coding, because it would negate the need for procedures and thus reduce payments to them. If true, this would seem to illustrate a real conflict of interest in terms of making cost-saving technologies the new standards of care.

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