Medical billing code - how they work

Medical codes are the process by which medical coders assign digital codes to medical diagnostics and procedures to charge insurance companies for reimbursement for health care services.

For medical billing and coding, there are three main coding manuals that contain all the possible codes that medical coders can include in reimbursement claims. they are:
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  ICD-10: International Classification of Diseases, 10th revision, involving diagnostic codes.
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  • CPT: Current program term refers to the procedures and services performed on the patient.
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  • HCPS: A general-purpose code system for health care, referring to other miscellaneous supplies and medicines that are provided to patients in a healthcare environment.

The coder combines the three sets of codes into insurance claims and sends them to the insurance company for reimbursement. Here are the ones they use for:
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  • The ICD-10 diagnostic code is used to explain to the insurance company why the patient provides health care services.

For example, code J02.9 represents diagnostic pharyngitis or sore throat. When the coder placed the code J02.9 on the medical claim, it told the insurance company that the patient was seen because they complained of a sore throat.
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  • The CPT or program code tells the insurance company which procedures were performed on the patient on the day the patient appeared.

For example, code 99213 is used to represent a typical office visit. When the coder included the code 99213 in the claim, it told the insurance company that the medical provider had a mid-range office visit.
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  • The HCPPCS or supply code is used to indicate all other miscellaneous services or supplies that are given to the patient on the day the patient sees it.

These codes are not always included in the claim form because they include supplies or other services not included in the CPT book, such as ambulance transport or durable medical equipment.

Medical service providers charge only CPT and HCPCS codes because they represent the actual service and supply to the patient.

Individual fees are charged for each code and are reimbursed separately by the insurance company. This means that the provider will not charge and the insurance company will not pay for the diagnostic code.

Due to the nature of medical coding, it is easy to accidentally [or deliberately] code the wrong things. This is considered fraud or abuse and is a very serious offence that can be fined or even imprisoned.

Therefore, it is important for coders to create protection against fraud and abuse of medical codes.

Good education in medical terminology and proper coding also helps the coding process to be faster and allows coders to manage more customers.

Usually, doctors code their claims, but medical coders must check the code to make sure everything is billed and encoded. In some cases, the medical coder must convert the patient chart to a medical code.

The information recorded by the medical provider on the patient chart is the basis of the insurance claim. This means that the doctor's documentation is very important, because if the doctor does not write everything in the patient chart, then it is considered that it will never happen.

In addition, insurance companies sometimes need this data to justify the processing before payment is reasonable and necessary.

Typically, a doctor or hospital will have a predetermined set of common reporting codes, called super fees or encounter forms. This is a billing form that includes diagnostics and program code for all common reports used in the office.

This helps doctors and medical coders report the correct code. This sophisticated medical billing software allows medical bookkeepers to send claims directly to insurance companies.

Insurance companies pay for the code they receive from the provider.

The reported code tells the insurance company what treatments were taken on the day of the service and on the day the doctor saw the patient. The insurance review code and patient benefits and determine the amount of the payment.

The reported code also allows insurers to quickly reject payments based on uncovered treatments. According to the ICD-10, CPT and HCPCS manuals, insurance companies will reject claims if they are coded incorrectly.

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