How Medical Billing Codes Work?
BUSINESS

How Medical Billing Codes Work?

Medical coding is considered to be a process where numerical codes are assigned to medical procedures and diagnoses to bill patients or their insurance providers for medical service reimbursement.

 

Coding manuals

The professional medical billing management services are well aware of the excising medical coding and billing practices, rules and regulations and do keep themselves updated with the periodical changes made by the concerned authorities. 3 main coding manuals exist comprising of all possible codes to be used by the medical coder for claims reimbursement. They are as follows:

  • CPT: It means ‘Current Procedural Terminology’ and refers to services and procedures performed upon the patient.

 

  • ICD 10: It means ‘International Classification of Disease’, 10th Revision, referring to diagnosis codes.

 

  • HCPCS: Stands for ‘Healthcare Common Procedural Coding System’ and refers to remaining miscellaneous medicines and supplies provided to patients within the healthcare setting.

The above set of codes related to insurance claims are combined by coders and sent to insurance firms for reimbursement purpose.

 

Purpose of codes

  • ICD 10: This diagnosis code explains as to why healthcare services are required by the patient. For instance, code J02.9 stands for a sore throat or diagnosis pharyngitis. As this code is placed on the medical claim, the insurance company is informed that the patient received treatment for a sore throat.

 

  • CPT: This code or procedure informs the insurance provider about the preformed procedures on the patient. For instance, there is used code 99213 to represent a typical office visit. As this code is included in the claim, the insurance company is let known that mid-range office visit was performed by the medical provider.

 

  • Supply codes or HCPCS: It represents miscellaneous supplies or services provided to the patient. However, such codes are not included always to the claim form, since it includes services and supplies not included within the CPT book like durable medical equipment or ambulance transportation.

 

Bills are made only for HCPCS and CPT codes by medical providers since it represents the supplies provided and the actual services rendered to the patient. Every code is provided with an individual charge and reimbursed separately by the insurance provider. It effectively means that billing is not done for those diagnosis codes for which the insurance firms will not pay.

Because of medical coding nature, codes may be accidentally used for wrong things, which at times is likely to be considered as abuse or fraud and is deemed a serious offense. It is pensionable with heavy penalties and might also include jail time.

For this reason, safeguards are to be put into proper place against medical coding abuse and frauds. Besides jail time and fines, the reputation of the physician and facility will be at stake.

 

Need for professional billing services

Since proper education is required with regards to medical coding and terminologies, the physicians prefer to outsource the billing and claims task to the professional local medical billing companies. This way, they can manage more patients and provide them with top quality treatments and earn name and fame in the domain.

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