Medical coding is a system used by healthcare providers to consolidate patient information. Very well Health explains that medical codes are used to organize a variety of information, including explanations on diagnoses and treatments, and connections between different diseases or medications. Medical codes also provide information impacting costs of care and reimbursements. By saving time through coding, healthcare providers are able to be more efficient.
Medical information can also be stored and shared in a more uniform way, which decreases the potential for error. Furthermore, this organization makes it easier for medical facilities to measure the effectiveness of their treatment.
Although there are many different types of medical codes, here are a few of the most common:
Current Procedural Terminology (CPT)
The American Medical Association creates a Current Procedural Terminology (CPT) code for every treatment available to patients, creating a uniform standard which can be used across the country.
International Classification of Diseases (ICD)
The ICD code is used as a tool to record diseases and other health conditions.
Healthcare Common Procedure Coding System (HCPCS)
HCPCS codes are commonly used by Medicaid and Medicare healthcare plans. HCPCS codes work in conjunction with CPT codes, often including services not covered by CPT codes, like ambulance rides or medical equipment.
How it works
Multiple factors contribute to the development of medical codes. Professional coders are the masterminds behind the coding process, and work at hospitals, assisted living facilities, and law firms. According to a MedicalBillingandCoding.org article, professional coders use information from medical reports to create codes based off diagnoses, prescriptions, and procedures. These codes are later used as key factors in making medical claims.
For example, Current Procedural Terminology (CPT) codes are included in your medical bill to justify your specific treatment to insurance providers. When paired with International Classification of Diseases (ICD) codes, which define your diagnosis, you can prove the necessity of your treatment to insurance companies. In a real life scenario, if you are diagnosed with the flu and receive a CT scan as treatment, it is unlikely that your insurance will cover the charge. Upon comparing the CPT code, indicating the service your doctor provided, and the ICD code, showing your flu diagnosis, the insurance company would know that the health condition and treatment do not coincide.
Why it matters
Being knowledgeable on medical coding can help you in multiple ways. You can use the medical codes on your bill to learn more about your diagnosis and medical procedures, as well as check that your bill is correct.
Professional coders are humans too, and sometimes mistakes happen. They might make a typing error, or as MedicalBillingandCoding.org warns, can even be coerced into a fraudulent practice benefitting the healthcare provider that employs them. And since coding plays a large role in the division of payment, these issues can be costly. It is important to make sure your medical codes match your true health conditions and services, or you could end up paying for the wrong procedure, or a procedure you never had. You can reference your own medical codes on sites like Find-a-Code, or learn more about medical bill essentials in our article, What You Need to Know about Medical Bills and Insurance.