A medical revenue code is used to describe and assign a dollar value to medical services provided to a patient, according to Value Healthcare Services. Revenue codes are used in communications between healthcare providers and insurance companies.
Medical revenue codes were originally developed for the Medicare system, but quickly became the standard operating procedure at hospitals. Value Healthcare Services points out that the medical coding system makes the billing process universal and consistent among all parties involved. Insurance companies only pay for approved services and require that a revenue code be reported on a claim form, otherwise the claim is rejected.
As of February 2015, the standard medical revenue code is four digits; it was originally three digits before the coding system was expanded. The first digit of a medical revenue code is usually a zero, and many insurance agencies assume a zero rather than require it to be listed. Furthermore, Value Healthcare Services explains that a revenue code ending in zero indicates an unspecified service. The revenue code also tells an insurance company where the service was performed, since location can drastically affect the price of the service. When a revenue code is attached to a supply code, it identifies equipment used in a procedure or taken home by a patient.