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Medical Coding
Medical Coding
MEDICAL CODING
DEFINITION
Transformation of narrative descriptions of diseases, injuries and healthcare procedures into
numeric or alpha numeric designations (codes)
PURPOSE
Codes developed to identify all reasons for seeking healthcare
Codes are detailed in order to accurately describe the diagnoses and the procedures
performed to test or correct these diagnoses
Identifying symptoms that must be evaluated and to alert other healthcare professionals to
life-threatening allergies
Helping with administrative functions such as staffing, scheduling, and adding or decreasing
healthcare services
Health Care Common Procedure Coding System (HCPCS)—This code set, established by the Centers for
Medicare and Medicaid Services (CMS), primarily represents items and supplies and non-physician
services not covered by the American Medical Association CPT-4 codes.
International Classification of Diseases, 10th revision, Clinical Modification (ICD-10-CM) is the new
diagnosis coding system developed as a replacement for ICD-9-CM, Volume 1 & 2.
International Classification of Diseases, 10th revision, Procedure Coding System (ICD-10-PCS) is the
new procedure coding system developed as a replacement for ICD-9-CM, volume 3.
National Drug Code (NDC)—The NDC is a code that identifies the manufacturer, product, and package
size of all medications recognized by the FDA.
ADVANTAGES OF MEDICAL CODING
Standardization
Medical coding allows for standardization of terms by assigning codes instead of using
subjective terms. For example, heart attack and myocardial infarction are two words for
the same thing and are reported with one medical code.
Uniformity
Medical codes create uniformity for procedures, services, supplies and other resources
utilized for reimbursement and reporting. Surgical gauze used at one facility has the same
medical code as surgical gauze used at another facility. This allows insurance payers to
reimburse accurately.
Reimbursement
Insurance billing claims use medical coding for reimbursement. Medical codes are grouped
together and assigned an amount based on factors like insurance payer, type of provider
and location.
Evaluation of Care
Medical codes are used to determine scheduling for care. Codes for procedures performed
frequently are reviewed to plan specialized staff and resources.
ADVANTAGES OF MEDICAL CODING
Statistics
Statistical reporting, both within and outside of health care organizations, is done using
medical codes. For example, reports for number of injuries caused by motorcycle accidents
come from medical coding statistics reported to health care agencies.
Clinical Research
Medical coding provides important information used in clinical research. Information, like
cancer codes, is reported to each state to help researchers understand patterns and where to
concentrate efforts.
Reporting
Medical coding helps to meet state and federal reporting requirements. Medical codes are
used to gather and submit mortality information by healthcare professionals and institutions.
Additionally, medical codes are used to perform regular internal reporting on topics such as
hospital-acquired infections, reimbursement and resource usage.
Marketing
Medical codes may also be used for marketing of health care services. The health
care organization uses codes reported for diseases occurring most often to create a
marketing campaign to educate patients and the community on those diseases.
ADVANTAGES OF ACCURATE MEDICAL
CODING
Avoid Upcoding
Upcoding is the replacement of the most appropriate code for a service or procedure
by a code for a more complex service
Example – A physician codes all established patient outpatient visits with the
intermediate level CPT code 99213, regardless of the true complexity and work
involved with each visit. The physician never uses the lower level codes 99211 or
99212, or the higher level codes 99214 or 99215. This is unfair to patients who have a
low complexity visit deserving of a 99212 code because their copayment with the
99213 code may be inappropriately high. The unusual coding pattern for this physician
(many 99213 services, no 99211, 99212, 99214 or 99215 services) can trigger a HCFA
audit.
Avoid Unbundling
Unbundling is billing of multiple procedure codes for a group of procedures that are
covered by a single comprehensive code
Either by Fragmenting one service into component parts and coding each
component part as if it were a separate service
Or Reporting separate codes for related services when one comprehensive code
includes all related services.
ADVANTAGES OF ACCURATE MEDICAL
CODING
Generate Clean Claims