Exploring the Complex Field of Medical Billing and Coding

Updated on November 21, 2022

KCooC5wBmp3ixIf you were to call a hospital asking for the exact cost of a specific medical procedure, the customer service person you speak with would not be able to provide you with any useful answers. Medical billing is exceedingly complex; it depends on a variety of factors, from an individual patient’s insurance to the doctors and nurses they receive care from to the exact treatments they receive. No two patients will leave the hospital with exactly the same costs incurred — and it is the job of a medical biller and coder to determine what they owe.

The world of medical billing and coding is fascinatingly complex. Here’s a look into what it takes to function as a professional in medical billing and coding.

How Medical Codes Work

Medicine is an intensely personal service, to the extent that no two patients will ever receive the exact same care from doctors and nurses. However, to prevent inequalities in billing and ensure accurate records, healthcare providers need to find a way to standardize the services patients receive. Enter: medical codes.

From the moment a patient steps into a healthcare facility, providers begin taking diligent notes about their visit. Doctors and nurses must produce ample clinical documentation, not only to ensure that they fully understand and appreciate a patient’s unique case but also because such reports are essential for healthcare administration. After a patient leaves the healthcare facility, these notes will be sent to the professional medical coder, who will translate personalized services into universal codes which are connected to specific costs.

There are many different kinds of codes to account for the diverse range of experiences patients may have during their healthcare visit. For example, coders need to be knowledgeable about the following types of medical codes:

ICD-10 Diagnosis Codes, which describe a patient’s condition as a means of classifying diagnoses. The World Health Organization maintains the ICD coding system, which includes two code sets: ICD-10-CM, which is used in all healthcare settings, and ICD-10-PCS, which is reserved for inpatient services at hospitals. Within ICD-10-CM alone, there are more than 70,000 unique identifiers for coders to utilize.

CPT and HCPCS Procedure Codes, which describe the services performed by a provider during a patient encounter. The American Medical Association maintains the Current Procedural Terminology (CPT) coding system, which is most often used in private practice. In contrast, the Centers for Medicare and Medicaid Services (CMS) and some other payers require healthcare providers to submit claims using the Healthcare Common Procedure Coding System (HCPCS), so coders need to understand both code sets.

Charge Capture Codes, which include a variety of extra care services, clinical items or physician orders that can be billed to patients or insurance providers. CMS requires hospitals to publish these codes on their websites and display the corresponding prices.

Professional and Facility Codes, which record all costs providers and healthcare facilities incur when providing services to patients. Professional codes typically involve physician and clinical services, as detailed in patient records. Facility codes, in contrast, account for the overhead of providing healthcare services, such as costs of medical equipment and supplies, medication and other elements of technical care.

How Codes Translate to Bills

Medical billers are responsible for submitting claims to payers and billing patients. Most healthcare facilities want the billing process to begin as soon as possible to help them receive payments sooner. The quicker healthcare organizations can receive payment, the less uncertain is their financial footing.

 Thus, the process of medical billing begins as soon as a patient checks into a healthcare facility. Administrative staff will assess patient information and verify the details their health plan, submitting any prior authorizations for services as necessary. During this stage, patients will be notified of any financial responsibility they may have, and facilities may begin collecting copayments.

Then, once the coder has finished translating clinical documentation into standard codes, billers can use this information to create a “super bill,” or an itemized form that includes all relevant information for creating claims. Once a claim is completed, it is sent to a payer — another word for an insurance provider — who will then assess, deny or accept claims.

Coding and billing are complex processes that help to provide some regularity in the highly irregular world of healthcare. Every healthcare facility relies on professional medical coders and billers to ensure that payers are charged for the services rendered and that the organization can continue delivering high-quality healthcare to patients.

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.