Medical Coding: All you need to know
In times where claiming health insurance involves hectic documentation and tireless follow-ups, Medical coding utilizes technology to ease the process of filing and creating medical claims in no time.
Medical coding is the transformation of healthcare diagnosis, procedures, medical services, and equipment into universal medical alphanumeric codes. The diagnoses and procedure codes are taken from medical record documentation, such as transcription of physician's notes, laboratory and radiologic results, etc.
Medical coding professionals help ensure the codes are applied correctly during the medical billing process, which includes abstracting the information from documentation, assigning the appropriate codes, and creating a claim to be paid by insurance carriers.
What is Medical Coding and the need to code?
Medical coding transcribes information about patient’s visit - from symptoms to diagnosis to medication prescribed – into an electronic code (generally alphanumeric) that can be stored in hospital’s database using digital coding software called “encoder”.
With enormous increase in patient visit in hospitals where type of disease, its diagnosis and prescription changes with individual patient; data and subsequent documentation generated from such records hamper the speed of medical claims resulting in lengthening and delay in process. Medical coding allows for the efficient transfer of huge amounts of information to generate accurate and timely insurance claims.
Coding systems used:
Individuals involved in coding of medical data are referred to as “medical coders”. The job of medical coder is to review clinical statements and assign standard codes. Medical codes must tell the whole story of the patient's encounter with the physician and must be as specific as possible in regards to capturing reimbursement for rendered services. Codes are alphanumeric and remain universal, irrespective of location/area. Medical coders follow three classification systems namely:
1. ICD codes (International Classification of Diseases)
Established by WHO in 1940, these are diagnostic codes that create an uniform vocabulary for describing the causes of injury, illness and death. The number succeeded by ICD represents the version no. of ICD. Currently, ICD-CM-10 is used where CM stands for Clinical modification. In the billing process, these codes are used to determine medical necessity.
2. CPT codes (Current Procedure Technology)
Procedural codes that are used to document medical procedures hospitals/clinics. This code set is published, maintained, copyrighted and updated by the American Medical Association (AMA). CPT codes are five-digit numeric codes that are divided into three categories:
• Category I codes are used often, further divided into six ranges corresponding to major medical fields: Evaluation and Management, Anesthesia, Surgery, Radiology, Pathology and Laboratory, and Medicine.
• Category II codes corresponds to performance measurement such as laboratory or radiology test results. These five-digit, alphanumeric codes are typically added to the end of a Category I CPT code with a hyphen.
• Category III codes denotes emerging medical technology.
3. HCPCS code (Healthcare Common Procedure Coding System): Commonly pronounced as “hick picks”, are a set of codes based on CPT codes. Developed by the CMS and maintained by the AMA, these codes primarily correspond to services, procedures, and equipment not covered by CPT codes such as durable medical equipment, prosthetics, ambulance rides, and certain drugs and medicines. HCPCS is also the official code set for outpatient hospital care, chemotherapy drugs, Medicaid, and Medicare.
The HCPCS code set is divided into two levels where the Level I is identical to CPT codes whereas Level II is a set of alphanumeric codes that is divided into 17 sections, each based on an area of specificity, like Medical and Laboratory or Rehabilitative Services.
Is medical coding and billing the same?
The main task of a medical coder is to review clinical statements and assign standard codes using approved classification systems. The job of medical billers is followed in the next step where they process and take follow up on claims sent to health insurance companies for reimbursement of services rendered by a healthcare provider. The medical coder and biller process a variety of medical services and claims on a daily basis.
An individual can be a coder and biller at the same time or may work with each other to ensure invoices are paid properly. In order to ensure smooth coding and billing process, the coder checks the patient’s medical records for verification of work conducted. Their ultimate mission is to work together to avoid insurance payment denials.