What Is Medical Coding?

Even though they do not treat patients, medical coders are still essential members of a health care team due to their role in classifying and storing medical information. Medical coding is the process by which spoken descriptions of diagnoses and medical procedures are recorded in a health care center’s computer system, where they are classified numerically or alphanumerically, according to the American Health Information Management Association (AHIMA).

Each disease, injury, procedure or treatment has a classification, or code, that a medical coder uses when breaking down patient medical information. This data must be coded accurately and efficiently. Medical coders are trained to adhere to strict coding guidelines and are well-versed in classification system software.

Medical coding originated as a way of classifying the cause of death data used on death certificates, according to AHIMA. It has since evolved into a career in which trained workers categorize patient medical information by codes, often for the purpose of billing insurance companies. The U.S. government spearheaded a greater emphasis on medical coding in 1983, when it implemented its first system for government-reimbursed medical claims. Coding is still an essential part of the process when it comes to reimbursement of claims for Medicare and Medicaid patients.

Each code determines how much reimbursement healthcare providers will receive from Medicare, Medicaid or insurance companies, according to the U.S. Bureau of Labor Statistics. Medical coders use different classification systems depending on if they work in outpatient settings, doctor’s offices or in long-term care, the Bureau says.

However, the billing process is only one use for medical coding. Health care professionals also examine coded medical data so they can evaluate how various medical processes influenced health care outcomes. This data is used internally to help health care providers develop plans to maximize good patient outcomes.

Medical coders are trained professionals who work in hospitals, doctor’s offices, nursing homes, ambulatory care clinics and home health care agencies. Some even work for the U.S. government; others are given the opportunity to work from home. Medical coders have varying responsibilities depending on where they work. Some may just do coding for a specific department ( e.g., radiology) in a large metropolitan hospital, while others will do coding for all manner of diagnoses at a small-town doctor’s office.