Medicare reimburses providers based on the type of service they provide. In the Medicare claims data there are three types of procedure codes:
- Current Procedural Terminology (CPT): CPT codes are designed by the American Medical Association. They describe medical, surgical, and diagnostic services and are designed to communicate uniform information about medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes. The CPT codes are republished and updated annually by the AMA.
- International Statistical Classification of Disease and Related Health Problems (ICD): “The ICD is used to provide a standard classification of diseases for the purpose of health records. The World Health Organization (WHO) assigns, publishes, and uses the ICD to classify diseases and to track mortality rates based on death certificates and other vital health records.” Code lookup. The most recent version of the ICD classification is the tenth edition (i.e., ICD-10).
- Healthcare Common Procedure Coding System (HCPCS): “The HCPCS is divided into two principal subsystems, referred to as level I and level II of the HCPCS. Level I of the HCPCS is comprised of CPT (Current Procedural Terminology), a numeric coding system maintained by the American Medical Association (AMA)… Level I of the HCPCS, the CPT codes, does not include codes needed to separately report medical items or services that are regularly billed by suppliers other than physicians…Level II of the HCPCS is a standardized coding system that is used primarily to identify products, supplies, and services not included in the CPT codes, such as ambulance services and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) when used outside a physician’s office. Because Medicare and other insurers cover a variety of services, supplies, and equipment that are not identified by CPT codes, the level II HCPCS codes were established for submitting claims for these items.”
Also there are 7 types of Medicare claims. These are:
- inpatient (IP),
- outpatient (OP),
- skilled nursing facility (SNF),
- hospice (HS),
- home health (HH),
- Part B or carrier (PB), and
- durable medical equipment (DME).
The first five claim types are deemed “institutional” claims and the last two are deemed “non-institutional.”