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What Is Medical Billing and Coding?


Medical billing and coding employees are essential and crucial for success of healthcare facilities and providers. They rely on the expertise of medical coding and billing individuals to assist in billing of services provided to their patients and processing of claims. Coders do not a college degree to work in this field but certifications are recommended to be successful in this growing field.


Medical coding is the process of converting diagnosis, procedures and supply information provided by healthcare individuals into ICD-10, CPT and HCPCS codes for billing purposes. Coders need a strong background in medical terminology and anatomy to correctly code procedures and diagnosis identified in the provider documentation. Coders must also understand billing to apply correct guidelines for some procedures and services.

ICD-10-CM is the abbreviation of International Classification of Diseases, 10th Revision, Clinical Modification These diagnosis codes are used by physicians and other healthcare providers to identify the patients, signs, symptoms, injury, and chronic conditions of a patient. As coders we need to know where to find these codes in the ICD-10-CM book and sometimes additional codes are needed to identify a manifestation of certain conditions or diseases. There are over 71,000 diagnosis codes in 2019 and no memorization is required. Some codes we use on a daily basis such as hypertension and we know them without looking it up. ICD-10-CM is maintained by Centers for Disease Control and Prevention (CDC) and updated October 1st of every year. ICD-10-CM codes must be reported on the insurance claim forms.

Examples of ICD-10-CM diagnosis codes:

  • J01.91 – Recurrent acute sinusitis
  • R11.2 – Nausea with vomiting
  • S42.001A – Fracture of right clavicle

ICD-10-PCS is the abbreviation for International Classification of Diseases, 10th Revision, Procedure Coding System. These codes are used in facility settings such as hospitals to identify procedural coding and other inventions taken by healthcare individuals. The codes look different than ICD-10-CM and are based on surgery, administration, measuring and monitoring, etc. and the following digits specify the body system, root operation, body part, approach and the device used. There are over 78,000 code in 2019 and again no memorization is required. ICD-10-PCS is maintained by Centers for Disease Control and Prevention (CDC) and updated October 1st of every year. Career Coders does not teach ICD-10-PCS. ICD-10-PCS codes must be reported on the insurance claim forms.

CPT is the abbreviation for Current Procedural Terminology and are medical services provided by physicians and other healthcare providers. These codes are used to report office visits, surgical, medical, diagnostic procedures and considered Category I codes. There are over 10,000 CPT codes and are updated the beginning of each year and no memorization is required. CPT codes must be reported on the insurance claim forms.

Examples of CPT codes:

  • 99213 billed for an established office visit
  • 27250 billed for treatment of hip dislocation
  • 49540 billed for repair of a lumbar hernia
  • 71045 billed for chest x-ray
  • 90653 billed for flu injection

HCPCS is the acronym for Healthcare Common Procedure Coding System Level II. These codes will identify supplies, injections, Durable Medical Equipment or also known as DME Supplies, Medicare procedure codes. Orthotic supplies, Vision supplies and other services. HCPCS codes must be reported on the insurance claim forms.

Example of HCPCS for a drug injection:

  • Patient receives an injection of B12 – J3420

MODIFIERS are used on procedure codes to identify the procedure or service was altered. They are not used for all procedures and only when necessary. An example could be removal of ear wax (cerumen) was performed on both ears. The code is for unilateral so a modifier 50 would be added to the procedure code to let the insurance know it was performed on both ears.

Example of modifier used on a procedure:

  • Removal of impacted cerumen by lavage – 69209-50

BILLING is the process of electronically filing claims electronically to the insurance companies using encrypted technology to secure patient information. Most insurance companies require claims to be submitted using electronic transmission. Billers are also responsible to work closely with insurance companies and patients to assist with insurance denials and re-processing of claims. These individuals need to understand coding as well as billing to perform their duties. Due too many rules and regulations of government, insurance companies that are often changing billers must have continued education to stay on top of this ever changing field.

CMS1500 or UB04 are the standard billing forms used to submit physician, non-facility and facility charges. Claim forms include the patient name, insured name, patient date of birth, insurance information, name of provider, and ICD-10-CM, ICD-10-PCS, CPT, HCPCS and modifiers to the claim form.

MEDICARE also referred to as CMS (Center for Medicare and Medicaid Services) is the largest single medical benefits program in the United States and is for the elderly and those with disabilities. Both Medicaid and Medicare were created when President Lyndon B. Johnson signed amendments to the Social Security Act on July 30, 1965 but began on July 1, 1966.

Medicare Part A hospital and skilled nursing services, Medicare Part B covers out-patient services, Medicare Part C are HMO or Medicare Advantage programs offered through private insurance companies and approved by Medicare and Medicare Part D is prescription program also offered through private insurance companies approved by Medicare.

MEDICAID is a federal/state program is a joint federal and state program that together with the Children’s Health Insurance Program (CHIP), assist individuals that are low income, individuals with disabilities and includes children, pregnant women, and seniors.

INSURANCE COMPANIES can be private, group, commercial or government. Most insurance companies will offer plans such as HMO, PPO, POS, Indemnity, Medical Savings Accounts, or could be self-funded.

The above list is just a few of the many subjects
that are required for medical billing and coding
and Career Coders will teach in their classes.

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