Health Care Reimbursement

Resources that explain the various aspects of health care reimbursement and help researchers find sources of information on payment rates

Important Regulatory Agencies

Center for Medicare and Medicaid Services (CMS).  Administers the Medicare program, coordinates with state Medicaid programs, develops regulations for all aspects of Medicare and Medicaid, conducts and reports on research into the cost effectiveness of treatment strategies, determines coverage, sets prices, etc.

Food and Drug Administration (FDA).  Issues approvals, recommendations, research, and other information about which devices, drugs, and foods are safe and effective.  Its rulings and advisory statements typically inform insurance coverage decisions.  NOTE ESPECIALLY THE APPROVALS AND CLEARANCES TAB.

United States Patent and Trademark Office (USPTO).  Publicly accessible database of all patent applications and decisions.  The Johns Hopkins community also has access to two proprietary patent searching databases:

Classification & Coding Systems

HCPCS codes are similar to CPT codes, and often identical; however, the Medicare-generated HCPCS coding system only includes codes that are reimbursed by Medicare.  In other words, they are not a complete substitute for CPT codes, which are a proprietary product of the American Medical Association.

CPT Codes. While the entire coding system is not available for free to the public, the American Medical Association maintains a keyword-searchable database for finding appropriate CPT codes and for entering CPT codes to find out which procedures they represent.  It's called CodeManager, and it even provides location-specific dollar amounts of fees paid by Medicare.

Reimbursement Alphabet Soup

Following are some common acronyms used in discussions of health care services reimbursement.

HCPCS—Healthcare Common Procedure Coding System: The officially recognized procedure codes, with the finest level of detail and specificity that is recognized

CPT—Common Procedure Terminology: Similar purpose as HSPCS, but used for billing to other payers besides Medicare (especially commercial insurers).  CPT is a copyrighted procedure coding system produced and maintained by the American Medical Association and designed to meet the needs of physicians.  It continues to be a necessary billing tool for commercial insurers, plus it is the basis for Medicare's coding system.  Commercial insurers may accept/consider CPT codes that are not included in Medicare’s HCPCS codes.  For example, the Medicare HCPCS code system does not include the code for an office visit, the purpose of which is to follow up on a surgical procedure or hospital stay (99024); commercial insurers, on the other hand, may consider making separate payment for such a visit.  Furthermore, the relative importance of the distinctions between CPT and HCPCS (and therefore commercial insurance and Medicare) depends on whether the typical patient for a certain kind of procedure is likely to be a Medicare patient (as with prostate surgery) or not (as with a vasectomy or normal delivery).

OPPS—Outpatient Prospective Payment System (for hospital outpatient departments)

APC—Ambulatory Procedure Classification: The procedure classification system used with OPPS.  Each APC incorporates any number of HCPCS codes that are considered to have similar resource consumption and similar clinical attributes.

DRG--Diagnosis-Related Groups or “Diagnostic-Related Groups”: Inpatient payment is based on these diagnostic groupings.

PFS—Medicare’s physician fee schedule.