Diagnostic Coding (ICD Part 2) & CPT Introduction
Continue developing ICD-10-CM skills and begin learning Current Procedural Terminology (CPT) coding for outpatient procedures.
By the end of this lesson you can
- Use the Alphabetic Index and Tabular List together
- Apply Excludes1 and Excludes2 notes correctly
- Describe the three CPT categories and the six Category I sections
- Link a procedure code to a diagnosis that supports medical necessity
Lesson Notes
Read through the key concepts before you try the challenge.
Two code sets, one claim
You are coding an outpatient encounter.
The diagnosis code says why the patient needed care. The procedure code says what was done. A claim carrying only one of them cannot be paid — and a claim where the two do not support each other is denied for medical necessity even though both codes are individually valid.
Your task: Learn to select both, and to link them so the claim tells a coherent story.
Diagnosis coding requires two steps, always. The Alphabetic Index is organized by condition and points you toward a code. The Tabular List holds the actual code plus the instructional notes that govern its use — and the index never shows those notes. Coding from the index alone is the single most common source of preventable coding error.
| Note | Means | Effect |
|---|---|---|
| Excludes1 | Not coded here — the two conditions cannot occur together | Never report both codes for the same encounter |
| Excludes2 | Not included here — the condition is separate but may coexist | Both may be reported when both are documented |
| Category | Format | Purpose |
|---|---|---|
| Category I | Five digits, e.g. 99213 | Procedures and services in widespread use — the great majority of coding |
| Category II | Four digits plus F | Performance measurement and quality reporting; supplemental |
| Category III | Four digits plus T | Emerging technology and services |
Category I is divided into six sections: Evaluation and Management, Anesthesia, Surgery, Radiology, Pathology and Laboratory, and Medicine. Surgery is by far the largest. Note that the sections are not in strict numeric order — Evaluation and Management codes begin at 99202 but appear first in the book, because they are the most frequently used.
ICD-10-CM: Code Structure Review
ICD-10-CM codes can be 3–7 characters long. The first three characters identify the category of disease. Additional characters add specificity — laterality, encounter type, sequela, and more.
- Characters 1–3: Category (e.g., S52 = Fracture of forearm)
- Character 4: Etiology, anatomic site, or severity
- Characters 5–6: Further specificity
- Character 7: Extension (A = initial, D = subsequent, S = sequela)
Introduction to CPT Coding
CPT (Current Procedural Terminology) codes are five characters long and are maintained by the American Medical Association (AMA). Category I codes are five digits; Category II codes end in F and Category III codes end in T, so "five characters" is accurate where "five digits" is not. They describe the medical, surgical, and diagnostic services performed during an encounter.
- Evaluation & Management (E/M): 99202–99215
- Surgery codes: 10000–69999
- Radiology: 70000–79999
- Pathology & Laboratory: 80000–89999
- Medicine: 90000–99199
Challenge
Apply what you've learned in this lesson.
Which organization maintains the CPT code set?
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