Skip to Main Content


  • Outpatient Coding/Billing

  • Inpatient Coding/Billing

  • Medicare, Medicaid, and Managed Care

  • Classification Systems Used in Healthcare

    • International Classification of Diseases (ICD)

    • Current Procedural Terminology (CPT)

    • Diagnosis Related Group (DRG)

    • Diagnostic and Statistical Manual of Mental Disorders (DSM)

Transitioning from the classroom to entering the world of patient care involves applying concepts of anatomy, physiology, pharmacology, clinical exam skills, and other important principles learned in the early years of medical school. Developing sound clinical skills is of paramount importance, but in our complex healthcare system, understanding the administrative structure that directs and oversees the system and how this affects patient care is equally important. Understanding these basic concepts will help provide healthcare professional students with an increased understanding of how to provide patients with optimum care. While these concepts that we have called the “language of healthcare” may not be a focus of medical students’ and other healthcare providers’ education, it is critical to have a general understanding of these concepts, as they provide a framework on how healthcare services are provided in the United States.

Original chapter by Costas Lallas, MD, FACS


  • The evaluation and management (E&M or “E and M”) patient visit is the foundation of most physician practices. Based on the characteristics of the office visit or hospital encounter (length, complexity, consultation, etc.), the practitioner chooses the correct Current Procedural Terminology (CPT) code for an E&M visit.

  • CPT codes 99201 through 99205 are used for new patients (NPV) and 99211 through 99215 for returning or established patients (EPV). Consultation codes are 99241–99245. In general, the higher the number in each coding group, the more complex the evaluation. These higher codes are associated with higher billing and in turn higher payment to the provider. Additionally, consultations are billed at a higher rate. Practitioners must justify the level of billing in the patient encounter in order to be compensated completely (see full discussion on CPT below).

  • A consultation is a type of E&M service provided at the request of another physician or appropriate source to either recommend care for a specific condition or problem or to determine whether to accept responsibility for ongoing management of the patient’s entire care or for the care of a specific condition or problem. In order to qualify as a consultation, the practitioner must document the three Rs: request, rendering of the service, and report back. Notably, Medicare and some commercial carriers do not currently recognize consultation codes.

  • As the level of provider billing increases, so does the relative value unit (RVU). The RVU is a measure of value used in the U.S. Medicare reimbursement formula for physician services. It is routinely used to measure physician productivity and is often linked to overall compensation by the provider’s employer. This information is useful when comparing physicians of the same specialty. Within specialties there are percentiles associated with RVUs ...

Pop-up div Successfully Displayed

This div only appears when the trigger link is hovered over. Otherwise it is hidden from view.