What Are Insurance Billing Codes?

Insurance billing codes are a set of alpha-numeric codes that medical professionals and insurance companies use to exchange and process information about patients, their medical conditions, medical procedures for conditions and payment for care or procedures. There are three basic types of codes: the Current Procedural Terminology, the Healthcare Common Procedure Coding System and the International Classification of Diseases. The codes make it easier for insurance companies and medical professionals to communicate fast and efficiently, according to the Your Health Care Simplified website.

The CPT is the five-digit code that usually appears on the Explanation of Benefits in a Medicare Summary Notice. It is also used in other documents including doctor and hospital statements. Health care providers use CPTs to bill insurance companies for services and procedures done on a patient.

The HCPS, on the other hand, is exclusively for the use of Medicare, according to the Your Health Care Simplified website. The Level I of the HCPS is just like the CPT, but the Level II is different in the sense that the codes include equipment and other services not included in Level I.

Finally, insurance companies use ICD to identify the type of medical condition that a patient is afflicted with. Insurance companies cross reference the ICD with the type of care or procedure used for it to ensure that it matches the CPT to prevent fraud.