What is Medical Coding and Billing? (Part 1)

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. Before we get into that, however, it all starts with the three books.

The Three Books of Medical Coding

For the purposes of this blog, we’ll talk about outpatient coding. (There may be a future post about inpatient, but we’ll stick with outpatient here.) 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.

Stay tuned for the second part of our blog, where we cover other elements that make up a medical coder’s job.

Editor’s note: This post was originally published in March of 2019. It has been updated for accuracy and clarity.