Medical billing codes: the code library

What are the medical billing code sets?

Five code sets cover almost everything on a claim and its payment. Each is owned by a different organization, so a code is only current when you check it against its own publisher.

CMS describes HCPCS as two levels. Level I is CPT, a numeric code set maintained by the AMA. Level II is an alphanumeric code set maintained by CMS, built from one letter followed by four digits.

X12 states that CARCs describe why a claim or service line was paid differently than it was billed. RARCs give additional explanation for an adjustment already described by a CARC, or convey information about remittance processing.

The NUBC website says its UB-04 manual, copyrighted by the American Hospital Association, is the only official source of UB data, and CMS points Medicare billers to the same NUBC manual for revenue codes. NCHS is responsible for the clinical modification of ICD-10, which the World Health Organization owns and publishes.

Terms used here are defined in the glossary, for example CARC, RARC and revenue code.

Which claim field does each code go in?

Each code set has a fixed home on the professional claim (CMS-1500), the facility claim (UB-04) or the remittance. A correct code in the wrong field still denies.

The CMS Claims Processing Manual says item 24D of the CMS-1500 takes the procedure, service or supply as a HCPCS code, and that the form can capture up to four modifiers. For ICD-10-CM it says to enter up to 12 diagnosis codes in item 21 and not to insert a period.

For the UB-04, the manual says outpatient HCPCS codes go in FL 44, and that FL 67 holds the diagnosis chiefly responsible for outpatient services, reported to its highest degree of certainty.

On the remittance, X12 defines four claim adjustment group codes: CO Contractual Obligation, PR Patient Responsibility, OA Other Adjustment and PI Payor Initiated Reduction. The CMS manual says PR is used for an amount that may be billed to the patient, typically deductible and copay adjustments. Many X12 CARC entries point to the 835 Healthcare Policy Identification Segment for the payer's policy reference.

Worked examples are on the code pages, such as modifier 25, CO-4 and revenue code 0450.

How do I use this library?

Find the code in the grouped list below and open its page. Each page gives the plain-words meaning, where it goes on the claim, the denials that follow it and its sources.

Codes change on schedules set by their publishers, so confirm a code against the current file before you bill. Our medical coding service does that check on every claim, and denial management uses the same codes to find the cause of a denial. To talk it through, book a call.