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Acupuncture Today
April, 2003, Vol. 04, Issue 04
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As Easy as A-B-C

Federal Government Authorizes Test of New Billing Codes for Alternative Medicine

By Editorial Staff

The United States Department of Health and Human Services (HHS) has approved a demonstration project to test a new series of codes for billing complementary and alternative medicine (CAM) and nursing services.

The project allows for the testing of advanced billing concept (ABC) codes in transactions related to the Health Insurance Portability and Accountability Act (HIPAA). If approved, the new codes would fill a variety of gaps in the current health care coding system, and could ultimately lead to improvements in the management and delivery of health care in the U.S.

"This is a huge step toward measuring and comparing the quality and cost-effectiveness of different approaches to health care," said Melinna Gianini, a coding expert and board member of Foundation for Integrative Health care (FIHC), an organization that advocates the health-promoting, cost-effective practices of alternative medicine and integrative health care providers. "With this approval comes real promise that health policymakers will soon be able to draw from a new body of more complete and accurate data. It makes possible a more rational approach to research, management and commerce in health care."1

The ABC codes were first developed in 1996 as a joint venture between FIHC and Alternative Link, a health care information and consulting organization. The codes provide representations of alternative medicine, nursing and other integrative health care practices, and consist of a five alphabetic character field, followed by an optional two-character alphanumeric modifier. The initial five characters describe particular health care services and supplies, while the optional modifier describes the type of licensed health care practitioner(s) who deliver that particular service or supply.

Approximately 4,200 ABC codes have been assigned to date. Over the years, they have gained the support of a diverse group of health care organizations, ranging from the Acupuncture and Oriental Medicine Alliance and the American Association of Oriental Medicine, to the Midwives Alliance of North America and other professional associations.

In the demonstration project, the ABC codes will be used as a supplement to the existing health care coding system. Currently, five code sets have been adopted as HIPAA standards: the Current Procedural Terminology (CPT) codes; National Drug Codes (NDCs); the Code on Dental Procedures and Nomenclature (CDPN); the International Classification of Diseases, ninth edition (ICD-9); and the Health care Common Procedure Coding System (HCSPS).

According to Alternative Link, the current HIPAA regulations leave thousands of integrative health care products and services improperly coded, and prevent head-to-head comparisons of the economic and health outcomes of conventional, complementary and alternative care. This limits the ability of insurers and policy-makers to identify the most beneficial, cost-effective approaches to care, and leaves them with incomplete and inaccurate data. It also hinders their ability to improve aspects of the health industry such as health insurance benefit plans; managed care and provider contracts; practice management; processing of insurance claims; and outcomes research.

The ABC codes are designed to fill these gaps on several levels, including the CPT codes and other areas of the HCPCS, by describing certain integrative health care practices and practitioners more accurately. Without ABC codes, insurers and self-insured employers have needed to cap annual visits or expenditures for some CAM services, such as acupuncture, rather than cover the most efficient and clinically appropriate approaches to care. In addition, some services offered by CAM practitioners are not listed in the CPT codes, or do not conform with descriptions of those services.

Inclusion of the ABC codes could be of tremendous benefit to the acupuncture and Oriental medicine profession. While acupuncture is already represented in the CPT code set, only two procedures (acupuncture with or without electrical stimulation) are included.2 Implementation of the codes would add a variety of therapies that acupuncturists, herbalists and doctors of Oriental medicine perform to the existing coding system; in fact, an entire section of the ABC codes is devoted to "herbs and natural substances," which comprise a large part of the practice of traditional Chinese medicine.

In a statement on its Web site, Alternative Link said that the ABC codes "offer design, development and oversight improvements that deliver superior functionality and support areas of health care subject to widely varying state laws - improvements not available in the HIPAA code sets but essential to assuring the legality and appropriate representation of integrative health care practices."3

The codes will be evaluated in relation to 10 objectives Congress originally mandated for the HIPAA code sets. The demonstration project will measure whether the ABC codes:

  • improve the efficiency and effectiveness of the health care system by leading to cost reductions for, or improvements in benefits from, electronic health care transactions;
  • meet the needs of the health data standards user community, particularly health care providers, health plans and clearinghouses;
  • are uniform and consistent with the other standards adopted under HIPAA and, as appropriate, with other private and public sector health data standards;
  • have low additional development and implementation costs relative to the benefits of using them as a standard;
  • are supported by an ANSI-accredited standard-setting organization (SSO) or other private or public organization that will maintain the standard over time;
  • have timely development, testing, implementation, and updating procedures to achieve administrative simplification benefits faster;
  • are technologically independent of the computer platforms and transmission protocols used in electronic health transactions, except where these are explicitly part of the standard;
  • are precise, unambiguous, and as simple as possible;
  • result in minimum data collection and paperwork burdens on users; and
  • incorporate flexibility to adapt more easily to changes in the health care infrastructure (such as new services, organizations, and provider types) and information technology.

Testing will be conducted in three-month increments over the next two years. The project will generate the cost-benefit data needed to support decision-making about whether to use ABC codes across the health care field, and within specific health care sectors and organizations. Testing will be discontinued based on one of the following events, whichever comes first: proof of a widespread and favorable (or unfavorable) cost-benefit ratio for ABC codes; the HHS naming (or rejecting) ABC codes as a HIPAA standard; or a specified deadline of October 14, 2005.

Synthia Molina, chief executive officer of Alternative Link, cautioned that the demonstration project will test the viability of ABC codes in HIPAA transactions only, and that there is no definitive timetable for when - or even if - the codes would gain the support of the insurance industry. Nevertheless, she asserted that testing the codes would lead to "major improvements in the national health information infrastructure."1

AAOM, Alliance Support New Codes

In a joint statement released on January 27,4 the Acupuncture and Oriental Medicine Alliance and the American Association of Oriental Medicine demonstrated their support for the ABC codes and recommended that they be included in the HIPAA standard code set.

"ABC codes, in addition to CPT, may help the industry improve care, more efficiently process claims, and generate better economic and health outcomes," remarked AAOM Vice President David Molony, LAc, Dipl.Ac. "This may foster appropriate insurance coverage for acupuncture and Oriental medical services, thus allowing better access for the public."

Tierney Tully, the Alliance's executive director, agreed with the statement, adding, "The naming of the ABC codes as a HIPAA code set would support patients, providers, payors and the research community in saving both lives and money."

For more information on the ABC codes, call Alternative Link at (505) 875-0001, or visit


  1. Dunkleberger C. Testing of ABC codes approved for complementary and alternative medicine and nursing. Internet Wire, February 3, 2003.
  2. Expanded CPT codes for acupuncture may be coming. Acupuncture Today February 2003.
  3. The limitations of the older HIPAA code sets.
  4. National acupuncture professional organizations join push for code set expansion. Submitted to Acupuncture Today January 27, 2003.


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