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What is Medical Coding?

Medical coding is the processing of compiling and maintaining records of medical services rendered at a health care facility. Medical coders assign codes to specific illnesses, conditions, diagnoses and procedures using a universal system used by all health care providers and medical billers who submit reimbursement claims for them to insurance companies.

Medical coding techs work in many settings, including:

  • Hospitals
  • Doctors’ offices
  • Specialty clinics
  • Surgery centers
  • Long-term care facilities
  • Dental offices
  • Consulting firms
  • Government agencies
  • Insurance companies

While medical codes are used by doctors and hospitals for reimbursement claims, they are also used to prepare statistical reports that help administrators carry out planning, marketing and management activities. Additionally, local and federal governments use this data to identify general health concerns and trends.

Medical coding is also important in that it allows patients’ medical information to remain private, as required by the Health Insurance Portability and Accountability Act (HIPAA), while still allowing data to be contributed to larger-scale analysis of public health patterns.

How Does Medical Coding Work?

When you go to your doctor’s office, you discuss your ailment, and the doctor makes a diagnosis and outlines a treatment plan.

After you leave, the doctor will either dictate or write up your chart, including your symptoms, diagnosis and treatment. The chart is then handed off to the billing and coding technician, who translates each symptom, diagnosis and treatment detail into a standardized code, which is then included in the claim to the insurance company. This is to ensure that:

  • The information is not accidentally changed as it passes through different offices
  • Confusion over wording is avoided
  • The patient’s personal information remains private
  • The information can be grouped with other similar information for statistical purposes

The technician also makes sure the chart is complete, and may communicate with physicians and other health care professionals to clarify notations. Billing and coding is one way to play an important, “behind the scenes” role in health care, without dealing with patient contact.