Medical Billing Codes – How They Work

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The cornerstone of the healthcare revenue cycle is medical billing and coding, which ensures payers and patients reimburse providers for services rendered.

Employees in medical billing and coding are essential and crucial to the performance of healthcare facilities and providers. But is is essential to understand that how medical billing codes works? To assist in billing services given to their patients and processing claims, they rely on the skills of medical coding and billing individuals. Coders do not a college degree to work in this sector but certifications are recommended to be effective in this growing field.

What is Medical Coding?

Although it also applies to the all-important issue of insurance coverage, for each diagnosis and medical treatment, medical coding varies in that it requires a specific code. Translating diagnoses and procedures into these common codes makes it easier for the health care provider to accurately process the bill.

Every time you see a healthcare provider, medical coding occurs. The healthcare professional reviews your complaint and medical history decides what’s wrong and how to handle you with an expert evaluation, and records your appointment. This paperwork is not only the continuous record of the patient; it is how the healthcare provider gets paid.

Read Also: Medical Coding in Clinics and Hospitals

Types of Medical Codes

If a patient has been assessed and/or a care provider has performed a test or other treatment, a medical coder must then allocate a particular code to each of these acts.

There are three major coding manuals for medical billing and coding, which include all the potential codes that a medical coder may use for a reimbursement claim.  They are:

1.      Current Procedural Terminology (CPT):

CPT, which is a guide to the patient’s treatments and facilities. Since its introduction back in 1966, CPT codes have undergone several revisions to adapt to the ever-changing medical climate and will continue as the 2010 health care reform bill takes effect, but all of these codes cover a broad range of physician-administered services. For each patient, these codes are collected and then sent for reimbursement to an insurer or other payer like Medicare by the practice.

2.      International Classification of Diseases (ICD)

The 10th Edition of the International Classification of Diseases, which applies to diagnostic codes. These codes have been around since 1893, but on the basis of reviews and feedback from payers, doctors and other medical contributors, the edition used in the United States has revised annually. ICD-9-CM code and its three volumes, required by the 2003 HIPAA Act, are mandatory for all physicians and coders to know. An expanded version, known as ICD-10-CM, will be released in 2013, and ICD-11-DM will be released in 2015 and will include a larger and more advanced code set to be better represented.

Read Also: Important Feature Of Medical Billing Software

3.      Healthcare Common Procedure Coding (HCPC)

HCPC Scheme, which applies to the majority of the patient’s miscellaneous supplies and medications in the healthcare setting. HCPC has two levels of code sets that are used specifically for emergency services, durable medical equipment, prosthetics, supplies, hospital outpatient treatment, chemotherapy medicines, and more. On a quarterly basis, this set of codes is revised and changes are made based on public input.

Coders merge these three sets of codes on insurance claims and then submit them for reimbursement to insurance agencies. This is what they are being used for:

  • In order to demonstrate to the insurance company that the patient comes in for health care, ICD-10 diagnosis codes are used.

The code J02.9, for instance, reflects the diagnosis of pharyngitis, or sore throat. If the code J02.9 is put on the medical claim by the coder, it informs the insurance company that the patient has been seen because of a sore throat complaint.

  • CPT, or treatment, codes, inform the insurance company what operations on that day they were seen were carried out on the patient.

The code 99213 is used, for instance, to describe a standard office visit. When the code 99213 on the claim is used by the coder, it informs the insurance firm that a mid-range office visit was done by the medical provider.

  • HCPCS is used to represent all other miscellaneous services or equipment rendered to a patient on the day they were seen, or supply codes.

Why are they essential?

The insurance companies who provide your health coverage are often called health plans. Healthcare providers, such as doctors, submit claims to health plans to ask for payment. They use medical codes to show the health plans the services they gave to patients.

  • CPT and HCPCS codes are only charged for care providers because they reflect real services and supplies provided to the patient.
  • A good education in medical terminology and proper coding also makes the process of coding go much faster and allows coders to handle more customers.
  • It is possible to unintentionally (or purposely) code for the wrong stuff because of the existence of medical coding. This is known as fraud or violence and is a very serious crime that can be punished by fines and even time in prison.
  • Because of this, it is critical that coders establish protections against fraud and misuse of medical coding.
  • Each code is subject to an individual fee which is charged by the insurance provider separately. This suggests that providers do not pay for diagnostic codes, and insurance firms will not pay for them.
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