Understanding CPT Codes in 10 Minutes or Less

Earlier this week, I discussed the basic concepts of E/M coding. E/M, or evaluation and management, coding is the system by which billing and reimbursement for medical services occurs. Unfortunately, as healthcare providers, we aren’t so great at assigning billing codes for the services we provide. As a result, our paychecks often suffer.

According to the American Academy of Professional Coders, in an audit of 60,000 medical charts, more than a third of the records were either undercoded or underdocumented. This represented, on average, $64,000 in missed revenue per provider. If you’re a nurse practitioner, chances are that your coding practices could use some refining, too.

The first step to assigning CPT codes accurately is to identify the components that must be considered in code assignment. There are four components to consider:

  1. Is the patient new or established?
  2. What level of history is recorded?
  3. What level of physical exam is documented?
  4. What level of medical decision making is reflected in the documentation?

Each of these factors is then divided into sub-categories that help determine the level of complexity.

New Patient vs. Established Patient

Distinguishing a new from an established patient in your practice is not as straightforward as it may seem. According to CMS guidelines, “A new patient is one who has not received any professional services from the physician, or another physician of the same specialty who belongs to the same group practice, within the past three years.” Patients who have received professional services from the provider or another provider in the same group within the past three years are considered established.

Assigning a new vs. established patient designation is important as the assessment, diagnosis, and treatment of a new patient can be time intensive. New patients are assigned CPT codes indicative of this higher level of complexity. New patient CPT codes reimburse at higher rates than those for established patients.


The elements of a patient history include history of present illness (HPI), review of systems (ROS), and past, family, and social history (PFSH). Documentation of each of these elements may include:

  • HPI – Description of present illness including location, quality, severity, duration, timing, context, modifying factors, and associated signs and symptoms.
  • ROS – Overview of the body systems identifying signs and symptoms of current or past problems. There are 14 recognized systems.
  • PFSH – Summary of the patient’s past illnesses, injuries, and treatments including but not limited to surgeries, medications, allergies, hospitalizations, and immunization status. Summary of family history which may include health status or cause of death of siblings, parents, and children, and/or hereditary diseases. Summary of social history including occupation, living arrangements, use of drugs, alcohol, or tobacco and level of education.

The level of complexity of a patient’s history is categorized as either problem focused, expanded problem focused, detailed, or comprehensive. The following chart depicts the number of components of each element of the patient’s history required to qualify for each designation.

Physical Exam

Complexity of the physical exam is determined by the number of organ systems and body areas assessed. Body areas and organ systems include:

  • Constitutional (three vital signs and general appearance)
  • Eyes
  • Ears, Nose, Mouth, Throat
  • Neck
  • Respiratory
  • Cardiovascular
  • Chest
  • Gastrointestinal
  • Genitourinary
  • Lymphatic
  • Musculoskeletal
  • Skin
  • Neurologic
  • Psychiatric

Similar to the ‘History’ component of the CPT code, the level of complexity of a patient’s physical exam is categorized as either problem focused, expanded problem focused, detailed, or comprehensive. The following chart depicts the number of body areas or organ systems that must be examined to qualify for these designations.

Medical Decision Making

Medical decision making is seemingly the most subjective of the components considered in selecting the appropriate CPT code. Medical decision making refers to the complexity of making a diagnosis. Factors taken into consideration to determine complexity of medical decision making include:

  • Options – The number of possible diagnoses or management options that must be considered
  • Data – The amount and/or complexity of diagnostic tests, medical records, and other information that must be obtained or analyzed to make the diagnosis
  • Risk – The risk of complications and/or comorbidities associated with the patient’s presenting problem and possible management options. Comorbidities are not considered in determining the complexity of decision making unless their presence increases the complexity of medical decision making.

Medicare does not provide a quantifiable tool for measuring options, data, and risk. So, making the determination can be a bit fuzzy. Complexity of medical decision making is categorized as straightforward, low complexity, moderate complexity, or high complexity. To classify the complexity of medical decision making involved in the visit, use the following table. To qualify for a decision-making category, at least two of the three components (options, data, or risk), must be met.

Bringing It All Together

Looking at CPT coding guidelines can make it seem like selecting the appropriate code is as lengthy as the patient encounter itself. Once you become familiar with these guidelines, the process becomes much more automated. My next post will bring the components of the office visit CPT code together showing which numerical code to select based on the complexity of each of these elements. Stay tuned…