So…EXACTLY what’s medical coding?

It’s part-playing detective, part-searching through doctor notes, and part hand-holding. However, the biggest part is explaining to the insurance exactly what happened at the doctor’s visit or what happened in surgery. This is done by giving tons of information in the form of codes to the insurance provider, so the doctor or surgeon gets reimbursed. Before 2015, these codes were all numerical. Starting October 2015, they were adjusted to specific alphanumeric terms. These new codes allow for more details and make it easier for the insurance computers to process claims quick and efficient.

Medical coding is a system of number and letters that are unique for each diagnosis, symptom, and cause of death. Medical coding can involve one or more of the following types of codes: ICD codes, CPT codes, HCPCS codes, HCC codes, DRG codes, and modifiers. All of these coding sets are important for communication and billing purposes. Accurate medical coding is necessary for billing and tracking statistics of disease and medical treatment.

Diagnosis codes are used to analyze disease patterns in societies for national and regional health and death statistics. Member countries of the World Health Organization can then benefit from needed resources to combat widespread health issues, to educate the populace on prevention and treatment, and to ensure the future health and well-being for their citizens.

Not only is coding important in disease tracking, but it is also financially critical for medical providers. Medical coding is one of the most significant factors in obtaining insurance reimbursement as well as maintaining patient records. Coding claims accurately lets the insurance payer know the illness or injury of the patient and the method of treatment. Commercial payers such as insurance companies, Medicare and Medicaid will not pay a claim if it’s not submitted with the acceptable codes. Let’s break down each medical coding system by type necessary for a payable claim:

ICD-10-CM Codes

The International Statistical Classification of Diseases (ICD-10) is the medical coding system specific to diagnoses, symptoms, and causes of death in humans. The World Health Organization (WHO) creates, copyrights, and oversees these classifications, and they are standard and thereby recognizable by every medical facility and practitioner worldwide. In the United States, the National Center for Health Statistics (which is a part of the Centers for Medicare and Medicaid Services) manages any amendments to the ICD-10 codes alongside the WHO. These diagnosis codes start the claim process.

CPT & HCPCS Level II Codes

Healthcare Common Procedure Coding System (HCPCS) codes have three levels:

  • Level I Current Procedural Terminology (CPT) codes are made up of 5 digit numbers and managed by the American Medical Association (AMA). CPT codes are used to identify medical procedures and services ordered by physicians or other licensed professionals.
  • Level II HCPCS are alphanumeric codes consisting of one alphabetical letter followed by four numbers and are managed by the Centers for Medicare and Medicaid Services (CMS). These codes identify non-physician services such as ambulance, durable medical equipment, and some pharmacy products.
  • Level III codes are miscellaneous (otherwise known as “local codes”) alphanumeric codes used when there is no discernible Level I or II code. They have W, X, Y, or Z followed by a four-digit numeric code.

Level I are numeric CPT procedure codes. Level II HCPCS are alphanumeric codes which are used to identify products, supplies, and services not included in the CPT codes.


Some CPT codes required the use of modifiers. They consist of two digit number, letters or combination of both. Modifiers provide additional information about the service or procedure performed. They can be used to identify the area of the body of a performed procedure, multiple procedures in the same session, or indicate a procedure was started but discontinued.

HCC Codes

What are HCCs? CMS uses HCCs to reimburse Medicare Advantage plans based on the health of their members. It pays accurately for the predicted cost expenditures of patients by adjusting those payments based on demographic information and patient health status. The risk assessment data used is based on the diagnosis information pulled from claims and medical records which are collected by physician offices, hospital inpatient visits and in outpatient settings.

DRG Codes

Diagnosis-related grouping codes are only used on inpatient claims. Many insurers pay according to the DRG. Therefore, the accuracy of all components is essential to proper claim reimbursement.

Education in Medical Coding

Many colleges and trade schools offer in-person classes on medical billing and coding. There are also online medical coding courses available through the AAPC or independent instructors. These courses or degree plans educate students on medical terminology, proper coding and billing techniques. Keep in mind, whichever education option you choose, ultimately you will have to pass the certification exam to be hired.

Education and continuing education in a clinic or doctor’s office are imperative to a coder’s success; staying abreast of the changes in coding and billing practices, as well as governing regulations, is essential in this fast-paced digital system in which we all work and live. The more you invest with continuing education, the more you find fascinating things like medical advances that will blow you away, new technology and better ways for performing surgery.

Coding and Billing

Coding and billing are often mentioned together because these are two facets of the medical office are linked to one another. The staff member(s) who complete your medical coding and billing should work closely together to ensure accurate and prompt payment of all medical claims and correct and complete medical records. The billing department cannot exist without medical codes to inform the insurance what happened during the doctor visit or the procedure.

Resources such as up-to-date code books and current software for coding or billing are imperative to the billing and coding staff in order to ensure accurate filing. Insurance companies like Blue Cross Blue Shield, Aetna, Humana, United Healthcare, Medicare, Medicaid pay the doctors and surgeons when accurate diagnosis and medical records are in place. In addition to the initial filing of patient claims, the coder and biller may be responsible for following up on appealing denied claims by auditing the patient’s chart, re-filing the claim, submitting coding guidelines, or taking other steps to ensure the accuracy of the records.

Given that medical billing staffs are responsible for the accuracy of your medical records by state and federal regulations, the importance of competent billers and coders is a must-have. A successful medical facility must have well trained, organized, proficient, medical billers and medical coders. The Medical Coders and Billers are the lifeblood of a well-run office.

As a Medical Coder, I can honestly say without reservation or beyond a shadow of a doubt that taking training for medical coding was one of the best decisions I have ever made in my life. Being a medical coder has been the adventure of a lifetime. No day is ever the same. I promise you will never be bored. I love what I do for a living and career.

Are you ready for the adventure of a lifetime? Look into taking a Medical Coding course and embark on a quest you never dreamed possible. Join us!


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