Medical Coding

Medical Coding versus Medical Billing

Medical billing and medical coding are separate but closely related. Both are critical to getting a health care providers paid for their services.

A medical coder is typically dedicated to analyzing patient charts and assigning the appropriate alphanumeric and numeric codes. These medical codes are the standard diagnosis and treatment codes used throughout the healthcare industry.

Both coders and billers use medical records as the basis for filing claims. The difference is the coder uses the patient medical records to assign the appropriate codes for the treatment. The biller access medical records as need for the payment of these services.

In an ideal world, once the medical coder has determined and assigned the appropriate codes, it is the medical billers responsibility to use this information to prepare and submit a claim. Once the claim has been successfully paid, the medical biller posts these payments, determines what the patient is responsible for, reconciles the accounts, and bills the patient for as necessary.

Most smaller practices cannot justify having both a coder and a biller. Since they typically use many of the same codes over and over, it’s important for the biller have some familiarity and knowledge of coding. Periodically the billing specialist has to look up the ICD and CPT medical billing codes, understand what the modifier means, and recognize when the codes are incorrect.

Situations where you have both a Medical Coder and Medical Biller is typically for larger healthcare providers – multi-physician practices, clinics, hospitals and places that see a lot of patients and have centralized coding and billing.

Types of Medical Codes

There are two primary types of medical codes:​

  1. Diagnosis Codes which describe the condition of the patient. There may be multiple diagnosis codes assigned on one visit with the physician.
  2. Treatment Codes which describe the treatment or services performed on the patient to treat the condition(s) described by the Diagnosis Code(s).

Coding is wide and deep. Most specialties use the same codes and modifiers over and over again.
Codes are a kind of short-hand method assigned to describe the conditions of a patient and the treatments applied.

Diagnosis Codes

ICD stands for International Classification for Diseases. ICD-10 codes are used for all diagnosis.

  • ICD-10-CM for Outpatient Services
  • CD-10-PCS for Hospital Billing

ICD-9 was previous revision. You may still see ICD-9 codes on older claims.
ICD-10 codes are 7 characters.
CMS required all claim submission after October 15, 2015 to use ICD-10 diagnosis codes.

Treatment Codes

Procedure codes are used to document services performed by a health care provider.
The federal government established the Healthcare Common Procedure Coding System (HCPCS) years ago for Medicare and it’s been adopted by the entire industry.
There are two categories of procedure codes defined by HCPCS

  • Level I
  • Level II

Level I are the Current Procedural Terminology (CPT-4) codes. These are 5 Digit codes.

These Level I & II treatment or procedure codes are the ones medical billing is mostly concerned with on CMS-1500 claims for physician services.

CPT treatment codes are maintained and copyrighted by the American Medical Association (AMA). CPT-4 is the current edition used for physician or other healthcare provider services.

Level II codes are maintained by CMS (Centers for Medicare & Medicaid Services) for non-physician services and supplies that are not covered by CPT-4 Level 1 codes. These codes are composed of a single letter in the range A to V, followed by 4 digits.

Treatment Code Modifiers

CPT codes may have a 2-digit alpha-numeric modifier added to the code. For example 99203 is for and initial office visit.  If s “-57” were added to this code it becomes 99203-57 for initial office visit with a decision for surgery.

Modifiers are used when a procedure is performed differently than described in the normal 5-digit code. Modifiers typically indicate:

  • Procedure performed by more than one physician
  • Has a Professional (PC) or Technical (TC) component
  • Procedure was provided more than once
  • Bilateral procedure was performed
  • Only part of procedure was performed
  • Procedure was increased or reduced

Where Codes are Used for Medical Claims

Medical billing codes are entered in the practice management or medical billing software as shown below:

For paper claims the codes are entered on the CMS-1500 paper form like the one below.

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Topic Covered in More Detail in Online Fundamentals of Medical Billing Course