Medical Coding 101 The Ultimate Guide imageMedical Coding is an unsung hero of healthcare tapestry who manages all the operations at the back end of the system. The fact that coding acts as an invisible link connecting insurance companies and healthcare facilities helps to explain the significance of coding. This comprehensive blog will teach you everything you need to know about medical coding. Starting with the basic definition of coding, this roller coaster ride will explore the medical coding model, major classifications, the medical billing process, and its significance at the end. Let’s start this journey together.

What is Medical Coding?

Medical coding is the process of summarizing a patient’s visit to the hospital in a set of alphanumeric codes. These codes act as a universal language and help the healthcare community effectively communicate with other medical professionals, insurance companies,and governmental agencies. Coders translate complex patients’ information, such as diagnosis, services provided, and treatment, into standardized code formats and submit them to insurance companies for reimbursement.

Medical Coding Model

Clinical Documentation

A patient visited the hospital with a complaint of severe pain in the chest and discomfort in the left shoulder. The patient was diagnosed with acute myocardial infarction (AMI). He was given the required emergency treatment for a heart attack. All the details were converted into ICD10 and CPT codes for better understanding by the medical professionals. 

The following table depicts the coded format for a patient with an acute myocardial infarction.

Alphanumeric Codes (ICD10 and CPT)  Clinical Details
ICD-10 Code I21.9  Unspecified Acute Myocardial Infarction
CPT Code 99284 Emergency department visited to check the severity.
CPT Code 93458 Coronary Angiography
CPT Code 92928 Percutaneous transluminal coronary angioplasty (PTCA)

A Journey Through Medical Coding History

Medical coding was first traced back to ancient Egypt and Mesopotamia. With the birth of the American Medical Association (AMA), came a revolution in the standardization of medical terminologies. It was the time when the first edition of the International Classification of Diseases (ICD) was published in 1867.

The 20th century can be considered a golden period for medical coding as the ICD continued to evolve and, in 1979, ICD-9 was introduced.

The 1980s were the era of technological advancement. The American Medical Association created and maintains current procedural terminology (CPT) codes. The 21st century marked the transition from ICD-9 to ICD-10. Recently, a new edition, ICD-11, was introduced in 2019, which is the most advanced edition of ICD.

Major Classification System of Medical Coding

In order to understand coding in an effective manner, it is classified into different categories. Every type has different roles to play. Following is a brief overview of the general classifications:

ICD (International Classification of Disease)

The International Classification of Disease dates back to the 19th century, when its first edition was published. Later on, it undergoes a journey of updates and revisions, which helps to get the best internationally recognized version. ICD is used to describe basic health conditions such as patients’ illnesses and injuries.

ICD codes are disease-specific and have additional numbers and digits to specify the procedure and health conditions. These codes differ regionally and have country-wise modifications.

 ICD Editions 

Editions  Brief Explanation
First Edition ICD-1 (1990) In 1900, the first successful edition of the International Classification of Disease was published in the form of an International List of Causes of Death. The International Statistical Institute was behind this creation. This marked the foundation of ICD.
ICD-6 (1948) After going through many revisions and updates, the final version of ICD-6 was adopted in 1948. This edition further expanded ICD and elaborated on the specific health conditions.
ICD-9 (1975) The World Health Organization (WHO) first released ICD-9 in 1975, but it wasn’t until 1979, when it was actually in use. The USA and many other nations have adopted it. ICD-9 consists of three to five digits. The first digit explains the category of the disease, while the other digits further specify the condition. These codes were used in billing, filing insurance claims,and in-patient procedures.
ICD-10(1992) ICD-10, which is more advanced and offers detailed coding, replaces ICD-9. It was adopted in 1992 and was basically for out-patient procedures and ambulatory care.
ICD-10-CM ICD-10-CM is the Clinical Modification, implemented in 2015. Codes were three-seven characters. The first character is always an alphabet (A–Z). It gives more details about the disease classification and condition. ICD-10-CM includes clinical information relevant to the U.S. healthcare system.
ICD-10-PCS ICD-10-PCS is the procedural coding system for procedural codes. It is assigned to procedures and surgeries performed in US hospitals. ICD-10-PCS is only for in-patient settings and has almost 87,000 codes.


ICD-11 The on-going version of ICD is ICD-11. The work on this edition started in 2000 but was officially released in 2019. New features are introduced through this advanced version, such as more flexibility in medical knowledge and the storage of detailed forms of clinical data. It works on various dimensions of coding.

CPT (Current Procedural Terminology)

The American Medical Association maintains the Current Procedural Terminology, a coding system that healthcare professionals use in the US to describe medical and surgical procedures. It is also known as HCPCS Level I. These codes help make communication easy among healthcare facilities and insurance companies. It ensures accurate billing and facilitates claim submission.

A CPT codebook is revised annually, and all the updated CPT codes are mentioned. Additional two-digit codes act as modifiers that further clarify the health situation.


CPT codes consist of five alpha-numeric characters. Based on these characters, CPT is categorized into three different structures.

Category I Category II Category III
provides detailed procedural descriptions. Does not provide a detailed description Document new procedures and services. 
Permanent and can’t be changed. Temporary and can be changed over time. Temporary and can be changed over time.
Used for billing and reimbursement procedures Used to report information on clinical performances Used for data collection and analysis


HCPCS Level II covers non-physician services and supplies that do not fall under the umbrella of CPT codes. It is less specific than HCPCS Level I and covers a wide range of services. The Centers for Medicare and Medicaid Services are in charge of maintaining HCPCS II.

It includes some other services as well, such as ambulance services, drugs,and durable medical equipment (DMP). They are vital for billing and reimbursement processes.

Medical Coding Process

The medical coding process involves seven crucial steps that successfully translate the diagnosis,procedures,and other healthcare services into standardized codes. These codes are used in claim submission for reimbursement. Here are the key steps:

Step 1: Patient interaction and record maintenance

The medical coding process starts when a patient visits the doctor. Healthcare providers maintain a record of services provided to the patient, which includes the diagnosis and medical treatments.

Step 2: Select Code 

Professional coders undergo a thorough study of the documents and choose the right code for the services provided. On the basis of services, CPT is used for procedures, ICD-10-CM is used for clinical information, and HCPCS II is used for non-physician services.

Step 3: Assign Code

Then, coders assign the chosen codes to the patient’s medical report. These codes are used for accurate claim submission.

Step 4: Code Audit 

In order to avoid claim denials, an internal audit is necessary. Many healthcare facilities have coding specialists who review the codes to check their specifications according to the coding guidelines.

Step 5: Claim Submission

After the successful auditing of codes, they are finally submitted to the health insurance companies. The claims must include the patient’s demographic information, specific codes, and the provider’s information.

Step 6: Adjudication and Reimbursement

At this step of the process, the payer checks to decide whether they will approve, deny, or reject the claim. Claims that are approved at this stage are processed for reimbursement.

Step 7: Managing Appeals and Denials

The medical billing facility must explain the reason behind the claim denial. They must appeal the decision and connect with the insurance companies to resolve the issue.

Why is Medical Coding Essential?

Medical coding is essential for a number of reasons, including:

1. Constancy

One of the essential reasons is uniformity. Medical coding ensures that Patient’s information is  documented and recorded consistently. This helps healthcare professionals better communicate with insurance companies and government agencies.

2. Billing and Reimbursement

Effective coding makes the billing process easy and ensures that medical providers receive reimbursement for their services. Accurate billing and timely reimbursement reduce the financial burden on the healthcare facility.

3. Data Analysis and Reporting 

The nation’s statistical department makes use of coded data. It is used in data analytics and public health reporting. All quality improvement initiatives need coding. Healthcare professionals can easily keep track of diseases.

4. Electronic Health Record

For an electronic health record, coding is essential for organizing the patient’s information. Coded data is easy to manage and doesn’t create fuss like paper documentation. This really helps the providers ensure the smooth functioning of the facility.

5. Public Health Monitoring

Coded data helps track public health and allows the government to identify health crises. Public health emergencies can be managed in this way.

How can Medheave Help with Medical Coding?

Medheave is a billing company of certified coders, developers, and consultants who can handle all your billing and coding processes in an effective manner. The company places a strong emphasis on data security and is compliant with coding standards and guidelines. Medheave has shown a tremendous track record of successful claim submissions. Thus, the reputation of the company is appealing. You can count on us, and we will provide you with services tailored to your special needs. Contact us for further details.

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