The process of converting medical diagnoses, treatments, services, and equipment into universal medical alphanumeric codes is known as medical coding. The medical record paperwork, which includes transcriptions of doctor’s notes, lab and radiologic data, etc., is where the diagnoses and procedure codes are found. During the medical billing process, which entails extracting data from documents, allocating the proper codes, and preparing a claim that must be reimbursed by insurance companies, medical coding specialists assist in making sure the codes are applied accurately.

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Every time you see a healthcare professional, medical coding takes place. The medical professional examines your complaint and medical history, determines the cause of your condition and the best course of action, and records your visit. Not only is this paperwork the patient’s permanent record, but it also serves as the basis for the healthcare provider’s payment.

Medical coders convert medical records into standardized codes that provide the following information to payers:

The patient’s diagnosis

Medical need for the patient’s received treatments, services, or supplies

Services, materials, and treatments given to the patient

Any unique situation or health issue that has an impact on such services and therapies

Similar to a musician who deciphers written music and manipulates their instrument to generate the desired sound, medical coding success necessitates an understanding of anatomy, physiology, service specifics, and payer policies.

The public bills of mortality published in London throughout the eighteenth century are the source of medical coding. Doctors were able to identify the source of a cholera epidemic by comparing them. Now that medical coding data is being utilized to enhance healthcare in general, it is much more important. In addition to being reported to payers for compensation, the information obtained from the codes is utilized in the building of actuarial tables, risk management, resource identification, usage determination, and support of public health initiatives.

A specific discipline is necessary for medical coding. Medical coders collaborate closely with payers, managers, and clinicians as an integral element of the healthcare team. Medical coders are experts in their field and are also detectives, scholars, educators, and problem solvers.

Every day, the medical coder and biller processes numerous treatments and claims. Medical codes should be as detailed as possible in order to accurately record and compensate patients for the services they get. They should also describe the complete story of the patient’s visit with the doctor.

Reviewing clinical statements and assigning standard codes utilizing the CPT®, ICD-10-CM, and HCPCS Level II categorization systems is the primary responsibility of a medical coder. Medical billers, on the other hand, handle and monitor health insurance company claims that are submitted in order to get paid for services that a healthcare practitioner has provided.

To ensure invoices are paid correctly, the medical coder and medical biller may be the same individual or they may collaborate. In order to facilitate the coding and billing process, the coder verifies the work performed by looking through the patient’s medical record, which includes the transcription of the doctor’s notes, ordered laboratory tests, requested imaging studies, and other sources. To prevent insurance payment denials, both collaborate.

What is the necessity for medical coding?

The record of the decisions, actions, and lessons gained forms the foundation of the healthcare income stream.

It is necessary to record a patient’s diagnosis, test findings, and course of therapy in order to ensure future visits will result in high-quality care as well as compensation. Personal health records are important since they follow a patient through complaints and treatments in the future and need to be clearly comprehensible. Given the hundreds of millions of visits, surgeries, and hospital stays that occur in the US each year, this is particularly crucial.

Thousands of ailments, diseases, wounds, and causes of mortality present a problem, though. Thousands of services are rendered by providers, and there are an equivalent number of injectable medications and supplies that need to be monitored. These are categorized using medical coding to make reporting and monitoring simpler. Additionally, each illness, process, and instrument in the healthcare industry has its own set of names, acronyms, descriptors, and eponyms. All of these components are presented and languaged uniformly in medical coding, making it easier to manage, understand, and update.

Hospitals, payers, and providers may communicate more simply and consistently because to this standard language, which is required by the Health Information Portability and Accountability Act (HIPAA). Almost all personal health data is stored digitally and is dependent on the codes that are issued.

The codes that are utilized

Worldwide, medical coding is carried out, with the International Classification of Diseases (ICD) being used in the majority of nations. The World Health Organization maintains ICD, and each member nation modifies it to suit their requirements. There are six official HIPAA-mandated code sets in the US, each providing a distinct purpose.

ICD-10-CM, or the Clinically Modified International Classification of Diseases, 10th Edition

ICD-10-CM contains codes for everything that has the potential to cause illness, injury, or death. The 69,000-code set includes codes for diseases and ailments, toxins, neoplasms, injuries, injury causes, and activities that were being done at the time of the injury. A code, or “smart code,” is a string of up to seven alphanumeric characters that expresses the patient’s complaint in detail.

ICD-10-CM is used for tracking and determining if treatments are medically necessary. Additionally, it serves as the framework for the MS-DRG system below.

The Current Procedure Terminology, or CPT®

The American Medical Association owns and maintains this code collection, which consists of over 8,000 five-character alphanumeric codes that describe the services that doctors, paraprofessionals, therapists, and other professionals deliver to patients. The CPT® system is used to report the majority of outpatient services. It is also used by doctors to report services rendered in inpatient hospitals. Here’s a peek at the process used to create CPT® codes.

ICD-10-PCS (Procedural Coding System, 10th Edition of the International Classification of Diseases)

Hospitals employ the 130,000-character ICD-10-PCS code set to define surgical operations carried out in operating rooms, emergency rooms, and other settings. By using the proper technique for ICD-10-PCS coding, you may overcome your fear of procedural coding.

Health Care Procedural Coding System, Level II (HCPCS Level II)

The more than 7,000 alphanumeric codes that make up HCPCS Level II were initially created so that Medicare, Medicaid, Blue Cross/Blue Shield, and other providers could report procedures and bill for supplies. However, they are now utilized for a wide range of other purposes, including academic research, quality measure tracking, and outpatient surgery billing.

CDT® (Nomenclature and Procedures in Dentistry)

The American Dental Association (ADA) is the owner and maintainer of CDT® codes. The dental portion of HCPCS Level II was once represented by the five-character codes, which begin with the letter D. The majority of oral and dental operations are invoiced using CDT® codes.

National Drug Codes, or NDCs

Every medicine package is tracked and reported using a code set developed by the Federal medicine Administration (FDA). Smart codes of 10–13 alphanumeric characters enable government agencies, suppliers, and providers to track prescription, marketed, and utilized medications.


Hundreds of alphanumeric two-character modifier codes are used in CPT® and HCPCS Level II codes to provide clarification. They might include information on the patient’s condition, the area of the body being treated, a payment request, an incident that altered the service the code refers to, or a component of quality.


MS-DRG and APCs are two federal code sets that are used to make payments derived from those systems easier. While indicating the resources used by the facility to carry out the service, they rely on pre-existing code sets.

Medical Severity Diagnosis Related Groups, or MS-DRG

A hospital reports MS-DRGs in order to get paid for a patient’s stay. The reported ICD-10-CM and ICD-10-PCS codes serve as the foundation for the MS-DRG. A specific collection of patient characteristics, such as the primary diagnosis, special secondary diagnoses, procedures, sex, and discharge status, describe them. This data collection is maintained by 3M HIS in collaboration with the Centers for Medicare & Medicaid Services (CMS).

Ambulatory Payment Categories, or APCs

The Hospital Outpatient Prospective Payment System (OPPS) is supported by the Centers for Medicare & Medicaid Services (CMS) through the maintenance of APCs. This system covers payment for certain hospital outpatient services, including minor surgery and other treatments.