Why do clinics use medical coding?


Quick Answer

Clinics use medical coding to file claims and receive payments from insurance carriers, according to AAPC. The health care industry has standardized coding systems to document procedures and diagnoses, and physicians are required to utilize these codes when submitting claims for reimbursement.

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Full Answer

Clinics commonly utilize ICD, CPT and HCPCS codes to document services provided to patients. There are over 68,000 ICD codes that are used to describe patient diagnoses and prove that services provided to the patient are medically necessary. CPT codes are used to document procedures or other services such as radiology or laboratory testing, and these CPT codes may have two-digit modifiers affixed to them to provide greater specificity and establish medical necessity. HCPCS codes are also used in conjunction with diagnosis codes to justify a procedure or other services such as an ambulance ride, medical equipment or drugs and medicines, explains MedicalBillingandCoding.org.

Medical coding standardizes billing practices among all clinics in the health care system. Without such coding, physicians might employ different terms or designations for identical services, and it would be difficult to determine the appropriate level of reimbursement. Governments may also leverage coding data to monitor and report on disease trends, notes MedicalBillingAndCoding.org. Similarly, hospitals or administrators may utilize coding data to track the effectiveness of treatments employed by facilities.

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