Medical Coding Practice Test 2025 – 400 Free Practice Questions to Pass the Exam

The correct choice is CPT, which stands for Current Procedural Terminology. This coding system is specifically designed to describe medical, surgical, and diagnostic services and procedures performed by healthcare providers in outpatient settings. CPT codes are essential for billing and insurance reimbursement as they provide a uniform language that accurately communicates the services rendered.

CPT codes are divided into three categories: Category I codes for procedures and services; Category II codes for performance measures; and Category III codes for emerging technologies, services, and procedures. The majority of outpatient encounters, including office visits, minor surgeries, and diagnostic tests, are captured using these codes, making CPT essential for outpatient medical procedures.

Other coding systems serve different purposes. ICD, which stands for International Classification of Diseases, is primarily used for diagnosis coding, documenting the reasons for patient encounters rather than the procedures performed. HCPCS, or Healthcare Common Procedure Coding System, includes codes for non-physician services, such as ambulance services and durable medical equipment, but it is often used in conjunction with CPT codes rather than as the primary coding system in outpatient settings. DRG, or Diagnosis-Related Group, is specifically related to inpatient hospital care and reimbursement, not applicable in the outpatient context.