The basics of medical coding

authored by added December 01, 2010 06:01 by Matt Sluzinski

Ever feel like your doctor speaks in code? To be sure, there’s often a communication gap between patients and physicians. But that’s a topic for another day.

The medical coding we’re talking about here is the type that exists in health care information technology — the realm in which pmFAQtory works. This kind of coding deals with numbers; specifically, it’s about assigning numbers to represent medical diagnoses and procedures. Medical coding means standardization and simplification. This concept is simple enough, but as we’ll see, the reasons for medical coding extend far beyond convenience.

Medical coding began in the mid-19th century as a way to more consistently classify causes of death. Today, coding is used to classify not only mortality (deaths), but also morbidity (diseases), and inpatient and outpatient medical procedures.

Two major “code sets” you may have heard about are International Statistical Classification of Diseases and Related Health Problems (ICD) and Current Procedural Terminology (CPT). We’ll dig deeper into each of these in the coming weeks.

So what implications does medical coding have for those working in the health care industry?

Medical centers (hospital, clinics, etc.) rely on accurate coding to get paid — literally. Only by properly coding (in terms of both accuracy and specificity) diagnoses and procedures can medical centers be reimbursed by third-party payers such as insurance companies or the government (Medicare at the federal level; Medicaid at the state level).

Third-party payers use medical codes to determine whether — and how much — to pay for a given procedure. They won’t pay for procedures performed without a supporting diagnosis. If a procedure is miscoded or not coded to the appropriate level of specificity, the payer may delay or deny reimbursement. These types of errors trickle down to patients, who are on the hook for charges not paid by their insurance company.

Biomedical researchers — such as epidemiologists — rely on medical coding when studying health outcomes over time. Instead of searching huge batches of medical records for a specific term or phrase — the use of which can vary throughout the U.S. or the world — researchers can search for the applicable code(s), which means better and faster research.

And that’s the tip of the iceberg, as they say. Next time, we’ll start exploring ICD and CPT, and their association with health care IT.

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