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Importance of Medical Coding Services

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The AAPC defines medical coding as “the transformation of healthcare diagnosis, procedures, medical services, and equipment into universal medical alphanumeric codes.” The codes for recording diagnoses and procedures are decided based on medical records, such as transcription of physician’s notes, laboratory and radiologic results, etc. Medical coding services are carried out by professional coders who are certified.


Even for a simple visit to the doctor, symptoms are recorded, procedures are performed and prescriptions for medicines are made out. And all of this information is coded by professional coders. As illnesses get more complicated, the amount of data to be conveyed to payors is much more. Thus, medical coding enables the efficient transmission of vast amounts of data. Moreover, it allows for uniform documentation of illnesses and treatments between medical facilities. At a national level, federal agencies use coding to track the prevalence of diseases.


  1. 1) International Classification of Diseases (ICD)

These are diagnostic codes used for describing the causes of injury, illness and death. This code set was created by the World Health Organization (WHO). It has been updated several times and the current one in use in the USA is the tenth revision. Hence the code set is ICD-10-CM. The CM stands for ‘clinical modification,’ a group of revisions by the National Center for Health Statistics. The CM thus increases the number of codes for diagnosis, leading to increased flexibility and specificity. The ICD-10 has 14,000 codes, whereas the ICD-10-CM contains over 68,000. The ICD code set represents a doctor’s diagnosis and the patient’s condition. These codes are used to indicate medical necessity in a claim.

  1. 2) Current Procedure Terminology (CPT)

CPT codes are used to chronicle most of the medical procedures performed in a physician’s office. This code set published and maintained by the American Medical Association (AMA) is revised every year.

CPT codes consist of five-digit numeric codes that are divided into three categories. Of these, the first category is divided into six ranges corresponding to Evaluation and Management, Anesthesia, Surgery, Radiology, Pathology and Laboratory, and Medicine.

The second category relates to performance measurement and, sometimes, laboratory or radiology test results. These five-digit, alphanumeric codes are added to the end of a Category I CPT code with a hyphen.

The third category of CPT codes relates to emerging medical technology.

CPT codes also have CPT modifiers for indicating more detail. These are two-digit numeric or alphanumeric codes added to the end of the Category I CPT code. Notably, CPT modifiers provide crucial additional information to the procedure code.

 3) Healthcare Common Procedure Coding System (HCPCS)

This code set is based on CPT codes. It was developed by the Center for Medicare and Medicaid Studies and maintained by the AMA. Specifically, the HCPCS codes correspond to services, procedures, and equipment not covered by CPT codes.

HCPCS is also the code set for documenting outpatient hospital care, chemotherapy drugs, Medicaid, and Medicare, among other services.

The HCPCS code set has two levels. The first level is identical to CPT codes. Whereas, the second level is a set of alphanumeric codes divided into 17 sections, each based on a specific area.

For a claim to be reimbursed by a payor, CPT codes and HCPCS codes should correspond with a diagnostic code (ICD) that justifies the medical procedure. Hence, coders should be well-versed in these code sets to enable the submission of clean claims to payors and quick payment.

About Bristol Healthcare

Bristol Healthcare Services, a medical billing and coding company, has been serving healthcare professionals for over twenty years. Our team of AAPC certified coders is an experienced one. They are trained continuously to be on top of all the changes made in codes and regulations. Our coding is accurate as all coding is audited internally to eliminate errors. The company’s goal is to submit clean claims to ensure quick reimbursement for you.

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