What is Medical Coding

Updated: Apr 7



Sometimes, you have to go back to the basics. “What is medical coding?” may seem like an obvious question, but it’s one we haven’t covered yet on our blog. I think you’re going to really the answer to this question. Before we get into that, however, it all starts with the three books.

The Three Books

For the purposes of this blog, we’ll talk about outpatient coding. For outpatient coders, we lug around three books:

  • CPT – full of procedures and an alphabetical list of what every what services and procedures that a provider, doctor or a licensed healthcare provider can render to a patient. CPT stands for “Current Procedural Terminology.”

  • ICD-10-CM – an alphabetical listing of the different types of illnesses, injuries and diagnoses — basically what’s wrong — with your patient.

  • HCPCS – pronounced “hickspicks” out in the industry, this is an alphabetical listing of supplies and other things that are used to carry out a particular procedure or service.


Those are the three titles to the three books that that we need in order for us to do our job.


What Medical Coding Looks Like

Now that you have that background, let’s get into what medical coding actually is. Picture a surgeon rendering a fracture repair. A person came in to the hospital because of a fracture and now the doctor is repairing that fracture. As a medical coder, your goal is to determine what is wrong with your patient — in this case, a fracture — and then go to the ICD-10-CM manual and look it up in an alphabetical index.

You’ll find the code that goes with fracture, then you’ll determine what treatment the patient is receiving. For this scenario, they’re getting the fracture repaired, so you go to your CPT book and find the word “repair” and it produces a code for you. Finally, let’s say they used a cast in this scenario. In HCPCS, this is when you’d find the cast in your alphabetical listing. There’s more that goes into it, but you’ll discover all of that if you sign up for a medical coding course.


The Purpose of Medical Coding

So, basically, a medical coder in this situation would code the injury, code the procedure and code the supplies used in the procedure. Insurance companies (otherwise known as payers) don’t want you to send them a bunch of doctors’ documentations and paragraphs and reports that they have to sift through to figure out those three things. They don’t they don’t want to have to go through all that to figure out why they did, what they did and what supplies were used. Instead, they want you to place on a claim form the appropriate codes.

At the end of the day, what you’re doing is you’re telling a story to the insurance company. A factual story of what was the matter with your patient, what they (the doctor/surgeon/provider) did to help the patient and what supplies were used to service the patient. Your primary job as a medical coder is to make sure you get your doctor paid for the services he or she provided.


The Priorities of Medical Coding

The average coder believes that their biggest job is to increase revenue. While that’s a wonderful trait to have, you need to keep in mind that before that your job is to protect your providers and protect the licenses of your providers. What I mean by that is that coders need to represent codes as factual stories of what happened with your patient. They codes are all based on facts. In other words, if it’s not documented, it should not be coded.

Your doctors have to document to the finest degree so that you can actually code to the highest level of specificity. You want to be confident that if your practice or clinic or hospital gets audited — and it’s about when they get audited, not if — that they know you as the medical coder are not fearful at all for any mistakes because you have coded factually.

So, again, your number one goal is to protect the licenses of your providers and your job number two is absolutely to achieve maximum reimbursement from the payers (insurance companies). You’ll be doing your job if you’re coding to your highest level of specificity and coding using your mastery of the medical coding guidelines.


The Power of Medical Coding

Your knowledge is where the money is at. But while you’re sitting there doing your job on a day-to-day basis, you don’t initially realize just how much revenue you’re driving into the company because all you do is code. The truth is, you’re not some innocent little coder, you know, just doing your little job and making sure you’re making your managers proud. You know your accuracy. You know the impact on revenue that you’re having at your practice, clinic or hospital.

Wherever it is that you work as a medical coder, your doctor is going to pay a visit to your office manager at some point and they’ll say to them, “Hey, I’ve been doing the same amount of surgeries, the same amount of patients, the same hospital contracts, the same insurance payers… how is it that we pulled in an additional $160,000 in revenue this past quarter? What on earth changed?” Then your manager responds to him or her and says “the coder” and that’s it! It’s not until then that you know your true value.

As a medical coder, you are the pulse of the company. Without you coming in and doing your job on a daily basis, no one (not even the doctor) has a job, so take pride in that and know the big deal that you are in the company.

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