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For many Medicare recipients, the explanation of benefits statement received after medical treatment can be confusing and difficult to understand, with strange numeric and alphanumeric codes that may seem meaningless to the average consumer. These Medicare billing codes are an essential part of the determination process for patient benefits, however, and provide a necessary level of consistency to the payments made for similar services. By breaking down each medical procedure into its component parts, Medicare administrators can ensure that similar activities are paid at a similar rate, regardless of the context of the activity in question.
Medicare coding practices are based in part on the American Medical Association’s Current Procedural Terminology (CPT) coding guidelines. Medicare CPT codes are numeric designators that refer to a specific procedure. For instance, a chest X-ray may be required for a variety of different reasons; however, the procedure is largely the same regardless of whether the patient is being examined for possible fractures or to determine lung and diaphragm function. Thus, the Medicare CPT code would be the same in either case. Medicare CPT codes are vital for the prompt processing of Medicare claims and benefits. By codifying medical procedures in a consistent manner, computer analysis and processing of claims can be facilitated and enhanced.
Medicare CPT codes are part of the Healthcare Common Procedure Coding System used by the Centers for Medicare and Medicaid in classifying medical treatments to determine appropriate benefit levels. While CPT codes are an essential part of the benefits determination process, Medicare also incorporates Level Two coding for items like prosthetic devices and medical equipment and other covered services that do not directly involve a physician. Ambulance services are included in Level Two coding, as are medications provided in a hospital or medical office setting. By combining both types of medical coding systems, Medicare can provide a comprehensive explanation of benefits to its members and ensure that medical procedures are covered in a consistent and accurate fashion. While these codes may be confusing for patients, they help provide a consistent and fair distribution of benefits for all Medicare recipients throughout the country.