Understanding the role of Medical Coding
October 09,2018
By Julius Raj Stephen
Medical coding - a niche segment in Revenue Cycle Management (RCM) - is a prerequisite for medical billing, filing and claiming reimbursement. It is the process in which a patient’s history covering his/her condition, diagnosis, prescription and procedures are converted into a set of alphanumeric codes. These are then used in medical billing to process claims.
Coders refer to primarily 3 types of codes namely: Current Procedural Terminology (CPT), International Classification of Diseases (ICD) or the Healthcare Common Procedure Coding System (HCPCS). ICD is a set of codes published by the World Health Organization (WHO), used to identify known diseases and other health problems and are the primary set of codes used by coders. CPT is a U.S. standard for coding medical procedures, developed by the American Medical Association (AMA), to bring clarity to the treatment procedures and medical billing. HCPCS was developed by the Centers for Medicare and Medicaid (CMS) and consists of 3 levels.
While ICD coding standards focus on the diagnosis, CPT identifies the services provided, and are used by insurance companies to determine how much physicians will be paid for their services. Medical coding is the base for medical billing and the rest of the RCM process in the healthcare industry.
Importance of RCM & medical coding
A healthy revenue cycle has become essential for all healthcare providers in the light of increasing operational costs, demand for value based care and providing the best patient experience. Any typical RCM process consists of eligibility, coding, charge capture, claims submission, reimbursement, accounts receivable and patient collections.
Medical coding being the second step in the RCM process, is a very crucial step. Coding, when done accurately, should be able to present the complete medical story of a patient. This valid record forms the basis for medical billing and insurance claims. While coding, the coder captures the codes representing the exact treatment/procedure provided to the patient. Based on these codes, medical billers submit claims to the payers (insurance providers or government programs such as Medicaid/Medicare) to receive reimbursement for the services rendered to the patients. Accurate coding minimizes the chances of claim rejections/denials, enhancing the reimbursement process and thereby the overall financial health of the revenue cycle process.
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