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  • Understanding Medical Billing and Medical Coding

    If you're interested in medical insurance and coding as a career option, it may be helpful to understand the relationship between the two major components of this field: medical billing and medical coding.

    • Medical billing involves processing and submitting patients' medical claims to insurance companies, and government agencies (such as Medicare and Medicaid) for services rendered to the patient. (1) Medical billers typically enter data about the patient and his or her clinical procedures into practice management software. Ultimately, this data is used to process insurance claims. An adequate medical billing process ensures that paperwork is completed and processed in a timely way so that payment can be received. The medical biller is also responsible for ensuring the integrity and quality of the data and for running management reports. The billing process should be monitored continually to ensure that all money is being received in a timely way. (2)
    • Closely related to medical billing, medical coding focuses more specifically on patient medical records. Accurate coding helps to prevent misleading notes or diagnoses. Medical coding uses alphanumeric codes established by the healthcare industry to translate a patient's medical records into a universal set of numbers and letters that facilitate the medical billing process. Codes have been established for every type of medical procedure or encounter, from surgical procedures, to illnesses and injuries, to tests, to routine exams and office visits. (1)

    Medical coders typically use one or all of the following major health care coding systems: (3)

    • Current Procedural Terminology (CPT┬«): These numeric codes are used for outpatient procedures and procedures performed in physicians' offices. (3)
    • Healthcare Common Procedure Coding System (HCPCS): These codes are used for Medicare or Medicaid procedures. The HCPCS has two levels: CPT (Level I) and HCPCS (Level II). HCPCS codes are alphanumeric and include services, products, and supplies not covered in the CPT, such as prosthetics and ambulance services. (3)
    • International Classification of Diseases (ICD-10): This internationally recognized system provides diagnosis, procedural, and inpatient hospital service codes. ICD codes are also used on death certificates. (3) (Note that in the U.S., the ICD-10-CM diagnosis code sets are scheduled to be replaced with the ICD-11 code sets in the fall of 2015. (4))

    Medical billing and coding professionals typically work in a variety of settings, including physicians' offices and hospitals. (3) Both medical billing and coding employ the same basic skills. If you're interested in billing and coding, you will need an eye for detail, knowledge of medical terms and of anatomy and physiology, knowledge of Health Insurance Portability and Accountability Act (HIPAA) rules and standards, proper medical form completion procedures, and computer skills. It is beneficial for medical billers and coders to have good communication skills, since these professionals may often work directly with patients as well as physicians and other medical office personnel. (1)

    Medical billing and medical coding have assumed vital roles in healthcare. The medical community relies on medical billers and coders to be detail oriented and accurate, as mistakes may often cause slower processing and delays in payment. Such errors could prove costly and may ultimately even result in legal issues. (3) Therefore, education, experience, proficiency, and accuracy remain valued components in this specialty area of the healthcare industry. (1)