Why Medical Billing Codes Are Critical To Healthcare Delivery

by  Find-A-Code™
Jan 30th, 2023

Medical coders play a critical role in determining how healthcare delivery is reported for record keeping and billing purposes. Likewise, the codes they know so well are equally critical. They have been around for decades. They were originally developed and implemented to make reporting and billing easier in a healthcare system that was becoming incredibly more complex. The system is even more complex today.

Those outside of the industry may not have a true appreciation for medical billing codes and what they accomplish. But if you work as a coder or biller yourself, you can fully appreciate the coding system. Healthcare providers and insurance companies appreciate it too. Without medical billing codes, reporting and billing for services would be a lot different.

The Basic Coding Process

Assuming you don't know much about medical billing and coding, let's take a brief look at how the basic process works. It all starts with a patient's visit to the healthcare provider. Someone in the office begins the coding process with either a paper or an electronic form. Codes are entered on that form based on the services provided. In cases where a paper form is used – which is becoming rarer these days – data must eventually be transcribed into an electronic health record (EHR).

Office staff do not have to memorize the thousands of potential codes they could deal with on a given day. In nearly every case, codes are easily discoverable by checking an online database. The same goes for medical coders and billers, the next two professionals in the billing chain.

After the patient's visit, a medical coder will go over the data generated by that visit. It is the coder's responsibility to make sure that the correct codes were entered by office staff. If not, they change the codes accordingly. From there, the data goes to the medical biller for invoice preparation. Once the biller is satisfied that all the information is correct, an invoice is generated and sent to the insurance carrier.

Codes Determined Payment

Up to this point, medical billing codes seem like little more than an administrative tool. But dig a little deeper and you discover where all this leads: medical billing codes determine payment. Right off the top, they determine how much an insurance carrier will pay a healthcare provider for a particular service or procedure. They also determine how much the patient pays.

For this reason, all the code information found on a healthcare provider's invoice needs to be accurate. There is no room for errors if a healthcare provider wants to be reimbursed by its insurance carrier partners as quickly as possible. Likewise, insurance carriers need to be able to trust that the invoices they receive from healthcare providers are accurate.

Billing Codes for Research Purposes

The payment issue is enough to make medical billing codes a critical part of modern healthcare delivery. But the codes serve another purpose: they are utilized for research purposes. Insurance carriers, government agencies, and even research facilities rely on accurate codes to track everything from how healthcare services are delivered to the frequency with which specific diseases or injuries are reported.

As you might expect, almost everything in medical billing is done in the digital realm. Medical coding and billing generate reams of data that get analyzed, categorized, and conceptualized for all sorts of purposes. We have been using medical billing codes for so long that it is difficult to imagine what our healthcare system would be like without them. No doubt they play a critical role in healthcare delivery.