| July 17, 2025
| 6:35 AM
Value-focused patient care is transforming medical practice. As rising healthcare costs in the United States challenge the widely used fee-for-service architecture, innovative, patient-centered care models are solving for ways to deliver high-quality care at lower costs, while improving patient outcomes, safety and satisfaction.
As value-based care gains momentum, the American Medical Association (AMA), in collaboration with Manatt Health, wanted to understand the role of the Current Procedural Terminology (CPT) code set in supporting the adoption and success of VBC models.
As a uniform language of more than 11,000 codes that describe the medical procedures and services delivered to patients, the CPT code set helps streamline reporting and communication between stakeholders across healthcare, including physicians, patients, payer organizations, health information technology professionals and researchers. The AMA maintains the CPT code set and convenes a rigorous, transparent and open editorial process led by the independent CPT Editorial Panel and driven by experts from all corners of medicine so that the codes reflect transformative advances in medical practice.
The AMA interviewed various healthcare stakeholders, including leaders from VBC provider organizations, health plans, integrated delivery systems, VBC enablement organizations and health technology organizations and created a brief summarizing its findings. The goal: to understand how the CPT code set currently supports innovative VBC models — and how it might evolve to support more widespread adoption of these kinds of high-value care models in the future.
Shifting to VBC models
The CPT code set is widely used across the U.S. by provider and payer organizations to describe physician-patient interactions. In recent years, the CPT code set has expanded to describe care management activities, collaboration across specialties, transitions across care settings and digitally enabled care offerings to support VBC contracts.
For example, Sentara Health, a large not-for-profit integrated healthcare delivery system with 12 hospitals in Virginia and North Carolina, highlighted that it relies on CPT codes for transitional care management and chronic care management and will soon use codes for remote patient monitoring to manage different levels of risk-bearing VBC arrangements. Dan Dickenson, Vice President, Complex Care Solutions at the Sentara Ambulatory Services Division, said that the organization credited CPT codes for helping them move toward a more “optimal clinical model.”
“We needed the additional codes to get there,” he said. “In that respect, CPT has been instrumental to this process of achieving our vision and adoption of value-based care.”
Driving population health and quality management
VBC models are designed to deliver “the right care in the right setting at the right time,” the AMA brief notes, with the objective of preventing unnecessary downstream care costs. CPT codes communicate specific information about when care is delivered and to whom, providing actionable data that International Classification of Disease (ICD) and Diagnosis Related Group (DRG) codes do not capture alone. These details help healthcare organizations identify patients at greatest risk for escalation and enable them to group patients into cohorts and design targeted care strategies.
CPT codes can also support payer quality improvement efforts. CPT-coded raw claims data offers payers a broad view of provider performance and healthcare quality across the membership. Payer organizations can then use these data points to identify opportunities to improve VBC delivery — and offer providers specific guidance on how to do so. Horizon Healthcare Services, the largest insurer in New Jersey, relies on raw claims data and CPT coding to measure the success of its VBC arrangements with provider organizations. “This tracking is an essential part of effective value-based delivery and accurately monitoring performance,” said Jamie Reedy, Chief Population Health Officer & SVP, Health Solutions at Horizon Healthcare Services.
Mitigating costs and embracing alternative payment models
CPT codes help healthcare organizations better manage costs through the analysis of retrospective claims data. For example, organizations can use the codes to establish important utilization and spend benchmarks that they can use to compare their expenses to a defined budget. They can also use codes to identify expensive events and patient cohorts and to develop more informed clinical protocols and workflows.
Many organizations use CPT codes for provider network management. The codes can provide organizations with critical visibility into what services were delivered outside of network so they can work to make out-of-network visits as cost efficient as possible.
Coastal Carolina Healthcare, a multi-group provider practice in North Carolina, achieved a near 14% savings rate during 2022 with its VBC arrangements. Chief Executive Officer Stephen Nuckolls stated that CPT codes were “the building blocks upon which we keep track of the work that is done across the practice.”
CPT codes can inform healthcare organizations as they consider alternative payment contracts. Using the code set, organizations can track where patients receive the plurality of their services, develop and define innovative digitally enabled care bundles for physician payment and reimburse digital health companies through existing payment channels.
Continuing to evolve
The AMA’s interviews with VBC stakeholders confirmed that CPT codes are already enabling population health and quality management, cost management and alternative payment model contracting. Those discussions also identified opportunities for the CPT code set to evolve to support providers, health systems, policymakers and payer organizations as they continue their VBC journeys.
Some interviewees highlighted the potential for CPT codes to reflect the variety of healthcare practitioners that deliver healthcare services, including medical and behavioral specialists and coaches and individuals in peer support roles that directly interact with patients. Interview participants also noted opportunities for service bundles, where a single payment is provided for a group of services related to a specific medical condition.
Continuing to drive the transformation of the CPT code set forward, the AMA and the CPT Editorial Panel have established a dedicated workgroup to explore new ways to report bundles or "episodes" of care aligned with VBC payment models, with a commitment to applying these learnings to meet the needs of stakeholders working to deliver better outcomes at lower costs. The addition of bundled service codes, representing both in-person and digital interactions, could support more innovative care delivery models in the future.
Download the full brief from the AMA’s website.
CPT is a registered trademark of the American Medical Association.
