Providers, do you know? medical billing and coding is the process of providing patients data and information about medical procedures to insurers to ensure healthcare providers get paid for the rendered services.
Technically, medical billing is a separate practice from medical coding. However, they have a close relationship. They are vital to the reimbursement cycle. They ensure that healthcare facilities get the compensation that they need and that patient bills are processed efficiently.
The Essentials of Medical Billing Explained
Medical billing is a process that involves compiling medical codes and patient information for an insurance claim. The term claim often refers to the bill. First, the medical biller creates the claim and submits it to payers for reimbursement. The insurance company examines the claim and, if all codes are included correctly, will make payment.
Finally, the medical biller returns the claim, along with the insurance compensation, to the healthcare provider for a second review. A medical biller determines how much money the patient has to pay out of his pocket and then issues a customized bill.
A Closer Look at Medical Coding
Medical coding is a process that involves taking the information compiled by a doctor after a patient encounter and translating it into numerical codes to indicate the type of care provided during the appointment. Medical Billing & Coding certification states that a medical coder is required to be able to understand medical terminology and to determine which code best represents services received.
It may appear to be a simple job, but medical coding is actually quite complex. There are literally thousands of medical codes. Each code affects how much insurance pays and how much a patient has to pay. Some insurance companies require specific sequences of medical codes for certain procedures in order to approve coverage. It is important that medical coders perform their work accurately because it can impact a patient’s financial situation. At last, the medical biller will make a claim after completing the medical coding for a patient’s visit.
Types of Medical Codes
Medical Coding includes the following types.
- ICD Codes
- CPT Codes
- HCPCS Codes
- DRG Codes
- Modifiers
ICD Codes – International Classification of Diseases
ICDs were initially developed as a system of classification for the healthcare industry. They provide a means of diagnosing diseases and classifying a large variety of symptoms, abnormalities, complaints, socio-economic factors, and external causes.
The ICD system was developed in collaboration between the World Health Organization, ten international centers, and the WHO to allow the classification of medical terms on death certificates.
The National Center for Health Statistics of the Centers for Medicare Medicaid Services manages the ICD code amendments in the United States along with the WHO.
CPT Codes
The Current Procedure Terminology (CPT) codes give doctors and healthcare professionals a uniform way to code medical procedures and services. This helps them improve efficiency and accuracy and streamline their reporting.
CPT codes can also be used in administrative management, for example, claim processing, guidelines on medical care review, and the development of guidelines.
CPT terminology is the most widely accepted medical nomenclature in use across the country for reporting medical, surgical, radiology, and laboratory services. It also includes genomic sequencing, anesthesiology, and evaluation and management (E/M).
HCPCS Codes
HCPCS levels I and 2 are another coding system used in the US. HCPCS is for billing Medicare and Medicaid patients.
The Healthcare Common Procedure Coding System is an alphabetical collection of codes that represent the procedures, supplies, goods, and services available to Medicare beneficiaries as well as individuals who are enrolled in private insurance programs.
- The CPT codes from the AMA are used to create Level I codes. They are all numeric.
- The HCPCS code set is a collection of alphanumeric codes that primarily includes non-physician supplies, products, and procedures.
- The HCPCS reference coding manual still includes Level III codes. These codes are also known as HCPCS local codes. They were developed by Medicaid agencies in states, Medicare contractors, and private insurers to be used in certain programs and jurisdictions. Some payers prefer coders to report Level III codes along with the Level I and Level II sets. However, these codes are not recognized nationally.
Modifiers
CPT modifiers, also known as Level I modifications, are used to add extra information to a service or procedure offered by a doctor. Code modifiers are used to further describe procedure codes without altering their definition. HCPCS codes can also be used as modifiers.
These codes consist of two-digit characters that are alphanumeric and provide information on the medical procedure. These codes are used to identify the area of the body that the procedure was performed on, multiple procedures performed at the same time, or situations in which a procedure has been started and then stopped.
DRG Codes
DRG codes (Diagnosis Related Groups) is an algorithm to classify hospital patients into approximately 500 groups. These groups are also known as DRGs and should have similar resource usage. Since most insurance companies reimburse based on the DRG, accuracy is key to receiving accurate reimbursements.
Medical Coding: Its Uses
Medical code sets are used for the following purposes:
- Medical codes are a universal language that is understood by both payers and providers. They can be used to communicate and bill. Both payers and medical providers are financially critical, so it is important that the providers use accurate and compliant Coding.
- Codes that are incorrect can cause issues.
- Up-coding: Up-coding occurs when a code for a service or procedure that is higher than the one documented in a patient’s chart is recorded. Up-coding is considered a serious offense and accurate and compliant coding are essential.
- Down-coding: Down-coding is the opposite of up-coding. It occurs when a code is assigned that is lower in complexity or cost compared to what was documented. Most often, down-coding occurs unintentionally. Both the coders and the clinicians must be informed of the potential losses that may result from down-coding.
- Population Health Management: Diagnose codes are used for analyzing disease patterns and providing information on national health trends. This allows federal and state governments the ability to plan the resources they need to fight prevalent health issues, as well as launch initiatives for prevention and treatment of the affected population.