Medical coding, closely tied in with the process of medical billing, is an important facet to the health care industry. This article highlights some of the most common medical codes and the choices available when choosing a service provider.

Medical coding takes the descriptions of diseases, injuries, and health care procedures from physicians or health care providers and transforms them into numeric or alphanumeric codes to accurately describe the diagnosis and the procedures performed.

This system was developed because, as we all know, medicine is not always exact, and there are many paths to take in preventing, diagnosing, and treating different ailments, all of which must be recorded and accounted for.

Proper medical coding is important on many levels, from ensuring accurate payment for physicians to creating a valid record of patient care history. In addition to aiding the medical billing process for procedures administered and helping expedite the payment of services for physicians, medical codes also serve the purpose of comparing projects and planning for under-served health care areas, aiding in administrative functions, as well as identifying symptoms that must be addressed and referenced by other physicians.

Types of Medical Codes

Once a patient has been examined and/or has had a test or other procedure administered by a care provider, a medical coder must then assign each of these actions a specific code.

The majority of these codes fall into the following categories:

  • Current Procedural Terminology (CPT)
    CPT codes have undergone many changes since their inception back in 1966 to adapt to the ever-changing medical environment and will continue to as the 2010 health care reform bill takes affect, but all of these codes cover the wide variety of services administered by a physician. These codes are compiled for each patient and then submitted by the practice to an insurer, or other payer like Medicare, for reimbursement.
  • International Classification of Diseases (ICD)
    These codes have been around since 1893, but the version used in the United States is updated annually based on input and suggestions from payers, physicians, and others medical contributors. Most notably, the ICD-9-CM code and its three volumes mandated by the HIPAA law in 2003, is essential for all physicians and coders to know. An expanded version, known as ICD-10-CM, will release in 2013, and ICD-11-DM in 2015, and will include a larger and extended code set for better description.
  • Healthcare Common Procedure Coding (HCPC)
    HCPC has two levels of code sets which are mainly used for ambulance services, durable medical equipment, prosthetics, supplies, outpatient hospital care, chemotherapy drugs, and more. This set of codes is updated on a quarterly basis and improvements are made based on public feedback.
  • International Classification of Functioning, Disability and Health (ICF)
    These codes basically describe the affect a disability has on a patient and how well he or she can function in an environment.
  • Diagnosis Related Groups (DRG)
    This coding class was created for those under Medicare whose ailments, age, diagnosis, or other factors can be broken down in to segments. The assumption here is that those that fall into the same categories will likely need the same amount or type of care. Thus, a reimbursement from Medicare can be made based on these classifications, regardless of the actual costs of the hospital stay or procedure.

Choosing a Medical Coding Service Provider

There are several options available for medical coding, but some options may be better than others based on the size of the practice, number of patients, area of specialization, and more for a particular organization. Medical coding is needed in nearly every health care setting like large hospitals, private hospitals, government hospitals, physician groups, nursing homes, rehabilitation centers, law firms, insurance companies, and more.

No matter which category of health care providers that an organization falls into, medical coding is one of the most important assets. Here are some options to consider:

  • Small practices or clinics with regular office hours
    Most smaller practices do not have a dedicated coder; instead, they sometimes choose to use a practice management software program to help complete and expedite their operations, including coding and submissions. Information and details pertaining to patient care are entered into the system by a practice’s administrative or data-entry staff. This helps to reduce overhead costs for salaries and wages and provides a seamless interface for all practice operations, from scheduling, reporting, coding and billing.Another option for smaller practices is to use a consultant or “outsource” their coding needs to an individual. Practices looking into hiring and independent medical coding provider should first be sure that this person has a certification or degree
  • Hospitals or larger practices open 24/7
    Most large practices that operate continuously throughout the day have a number options available when it comes to medical billing and coding. Some organizations choose to employ a dedicated group or department of coders who are responsible for handling all of the submissions and claims for an organization. This may be a good option for large hospitals, where all of the work can be done in-house and in close contact with all physicians and care providers.On the other hand, some larger organizations that do not have a department dedicated solely to billing and coding choose to outsource this process because of the large volume of patient records being handled or because of an affiliated network or system that they belong to.

Medical coding can be a complex operation, so quality and accuracy in providers should be top priorities for any health care organization.
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