The phrase “medical billing and coding” is a deceptive one, as medical billing is actually a subspecialty contained within medical coding. It’s better, then, to break up this question into two separate ones.
What is Medical Billing?
Medical billing is the process of ensuring that doctors, nurses and other caregivers working in health care facilities receive proper reimbursement for the services they provide. When you become a medical biller, your responsibilities will largely depend on the size of your facility and the nature of the services it offers. However, most all medical billers share some basic job responsibilities in common.
As a certified medical biller, you will:
- Assemble all of the data that needs to be included on a bill.
- Ensure that insurance forms are correctly completed and signed.
- Enter this insurance information into a computer.
- Communicate with doctors are other medical professionals in order to learn more about and clarify diagnoses.
- Read medical invoices while keeping in mind ICD-9-CM, HCPCS Level II and CPT codes.
- Contact patients to inform them of overdue bills and billing errors.
- Process appeals.
- Handle denied claims.
- Interpret EOBs, or Explanations of Benefits.
- Make adjustments to bills.
- Collect payments from patients and insurance companies.
What is Medical Coding?
Medical coding facilitates the medical billing process. When a patient receives a service from an ambulatory surgical center, outpatient hospital or physician’s office, the healthcare provider must create a claim using medical codes. The claim is then paid by either the patient, an insurance company (sometimes referred to as a “payer” or “commercial payer”) or Centers for Medicare and Medicaid Services (CMS, often referred to simply as “Medicare” and “Medicaid”).
As with certified medical billers, certified medical coders have different job responsibilities depending on where they work and who they work with, though many basic duties remain the same for all.
As a medical coder, you will:
- Accurately code claims in order to ensure proper payment of invoices.
- Ensure that you’re using the correct codes by checking certain areas of patient medical records, including requested imaging studies, laboratory test results and doctor’s note transcriptions.
- Apply your knowledge of medical terminology and human anatomy when making coding decisions.
- Understand the various types of insurance plans and their regulations
- Use ICD-9-CM, HCPCS Level II and CPT codes and guidelines to assign the correct service levels and codes to the supplies used and procedures performed in treating patients.
- Identify diagnoses given by physicians.
- Document the frequency at which diagnoses are given, as well as the procedures and services used to treat those with different diagnoses.
- Audit denied claims appeals.
- Advocate for patients and providers in medical necessity and coverage issues.
- Use chart audits to recommend federal mandates that require the use of specific billing and coding standards.
Fast Fact: Getting With the Times
Even while the healthcare sector is striving to implement an industry-wide shift to electronic records, the majority of medical billers and coders still work from paper medical records and billing forms. According to a 2008 survey conducted by the AAPC, only 10 percent of the respondents coded from electronic health records.
Can Medical Billers Also Be Medical Coders?
Yes, and the reverse is true as well. An organization might also employ individuals only as “medical billers” and “medical coders,” but even in this case, the two would work closely together towards achieving the same ultimate goal: ensuring that the medical workers providing patient services are correctly reimbursed.
Code Sets
In order to complete their daily job responsibilities, certified medical billers and coders use code sets including:
- ICD-9-CM
- HCPCS Level II
- CPT
These code sets are used to assign medical codes to procedures and services.
ICD-9-CM
The ICD, or International Classification of Diseases, was the world’s first method of tracking mortality and diseases. It was originally known as the ILCD, or International List of Causes of Death, when it was first introduced in 1893 by the International Statistical Institute. ICD-9-CM (the “CM” standing for “clinically modified”) represents the latest installment of this code set, which was created by the WHO, or World Health Organization, in 1979. ICD-9-CM is revised at least once a year based on suggestions from payers, providers and governmental agencies. The US governmental bodies in charge of overseeing any modifications to this code set are the CMS (Centers for Medicare and Medicaid Services), NCHS (National Center for Health Statistics) and CDC (Centers for Disease Control and Prevention.
In 2003, ICD-9-CM was mandated by HIPAA, or the Health Insurance Portability and Accountability Act (which was originally created in 1996). Healthcare clearinghouses, health plans and all health care providers engaged in the transmission of electronic health information standardized by the US HHS (Department of Health and Human Services) are required to use ICD-9-CM. As a result, everyone employed as a medical biller or coder must understand ICD-9-CM.
ICD-9-CM is split into three separat volumes. Volumes 1 and 2 are used by all healthcare facilities and providers. Volume 3 is only used for the reporting of services performed in hospitals.
- A classification of diseases and causes of injury, categorized according to anatomical systems and etiology. Volume 1 is often known as the “tabular section” of this code set.
- An alphabetic index that is used to look up the codes found in Volume 1.
- A classification of procedures, including an index and a tabular section.
HCPCS Level II
HCPCS, or Healthcare Common Procedure Coding System, is a standardized code set used by medical billers and coders to ensure the consistent and orderly processing of health care claims by health insurance programs, such as Medicare. HCPCS Level I is also known as Current Procedural Terminology (CPT), a code set maintained by the AMA, or American Medical Association, and used for the same basic purpose. This code set was developed throughout the 1980s. The HHS (Health and Human Services) gave CMS authority to distribute and maintain HCPCS Level II codes in 2003.
All of the codes contained in HCPCS Level II consist of five alpha-numeric characters, with each code representing non-physician services, durable medical goods, medical supplies and other products and services not covered by CPT. Some of these products and services include:
- Orthotics
- Prosthetics
- Ambulance services
- Medicaid
- Chemotherapy drugs
- Outpatient hospital care
HCPCS Level II is updated on a quarterly basis based on feedback from Blue Cross Blue Shield, the American Dental Association, speciality healthcare societies and healthcare vendors, manufacturers and providers.
CPT
CPT, or Current Procedural Terminology, is a code set introduced by the AMA (American Medical Association) in 1966. As with HCPCS Level II, CPT is a code set comprised of five character alpha-numeric codes and their standardized descriptions, all of which are used by medical billers and coders to seek reimbursement for medical services provided from payers. CPT is used nationally as a way of accurately coding diagnostic, surgical and other medical services.
When CPT was first published, it primarily dealt with surgical procedures and only offered limited information regarding lab procedures and medicine. The code set was revised in 1970 with several major improvements, including:
- Five-digit codes instead of four-digit codes.
- A list of internal medicine procedures.
- Terms and codes for therapeutic and diagnostic procedures used in surgery.
Other improvements came in later editions:
- 1977: Updated codes for medical terminology and implemented periodic updating.
- 1983: Adopted by CMS (Centers for Medicare and Medicaid Services). Mandated HCPCS as a standard coding systems for services provided within Medicare Part B.
- 1987: CMS required CPT for reporting surgical procedures performed in outpatient hospitals.
Fast Facts About How Medical Billers and Coders Work
According to an employment survey conducted by the American Association of Professional Coders…
- 18% of medical coders are completely responsible for at least some business decisions at their workplaces.
- 37% of medical coders are asked to provide input when it comes to business decisions, but don’t have ultimate authority.
- For clarification: 55% of medical coders have some influence over the business decisions made at their workplaces.
- 68% of medical coders work at offices that conduct chart audits.
- 58% of these medical coders say that their offices conduct chart audits quarterly.
- Almost 25% of medical coders work at offices that are already preparing for implementation of ICD-10, scheduled for October of 2013.
Where Do Medical Billers and Coders Work?
As a medical biller and coder seeking a career, you’ll have a major advantage over many of your fellow workers in the healthcare industry: you can work just about anywhere, so long as the facility has something to do with the medical world. A few examples include:
- Physicians’ offices
- Hospitals
- Home health agencies
- Physical therapy offices
- Speech pathology centers
- Ambulatory surgical centers
- Emergency care facilities
- Nursing homes
- Hospice facilities
- Medical equipment agencies
- Medical software vendors
- Insurance companies
- Billing agencies
- Auditing centers
- Governmental regulatory organizations
- Medical research facilities
- Medical publishing companies
- Medical education facilities
Your work setting could have a huge influence on your daily responsibilities. Take the following for example:
In a physician’s office, you might be one of many medical billers, coders and administrative workers tasked with supporting dozens of physicians and nurses. In a very small facility, you may handle the coding and billing responsibilities while doubling as a secretary and supporting only a single physician.
In a hospital, you might code nothing but urology, oncology or another medical specialization 8 hours a day, every day of your career. In a smaller hospital, your responsibilities may be far more diverse.
In a medical equipment agency, you might work closely with a variety of healthcare facilities on a local, regional or even national level. You might be in charge of ensuring that the durable medical equipment produced by your facility meets industry and governmental standards.
In an insurance company, you might process incoming claims and audit appeals by reviewing the ways in which physician’s office- and hospital-based medical billers and coders have assembled their documentation.
In a regulatory organization, you’ll use your knowledge of medical billing and coding as well as general and specific healthcare trends in order to help create the policies, guidelines and regulations with which healthcare facilities must comply.
In a research facility, you might use medical data compiled by the work of medical billers and coders around the world to predict what the healthcare and medical worlds might look like in the future. You’ll analyze healthcare trends to allocate resources and determine which diseases, treatments and procedures warrant further scientific exploration.
In an educational setting, you might serve as an instructor to medical billing and coding students. You might also work on developing medical billing and coding certification exams, and write the literature used in billing and coding textbooks.
Fast Fact: Doctors Split on Coding Knowledge but Willing to Learn
When coders in a 2008 AAPC survey were presented with a question regarding whether or not physicians in their offices had “a solid knowledge” of coding and compliance, 58 percent of the respondents either “agreed” or “strongly agreed” with the statement. The other 42 percent either “disagreed” or “strongly disagreed.” However, the same survey revealed that 75 percent of coders feel that physicians in their offices are open to discussions about their documentation shortcomings.
What is the Difference Between Medical Coding and Medical Billing?
First, an explanation of why the two are so commonly grouped together:
- Medical coding and medical billing are processes that work towards the same end goal: receiving reimbursement from patients and insurance companies for the exact services rendered in medical facilities.
- Medical billing is the next logical step in the healthcare process after medical coding. The process of medical coding assigns a code to a service rendered, such as an influenza diagnosis or gastric bypass surgery. This code is then used to determine the bill which will be sent off to a patient or insurance company.
- In many healthcare facilities, the person doing the coding is the same person that’s doing the billing.
- Even in facilities where coding and billing responsibilities are delegated to different people, those people will probably work together in the same physical office.
With all of that said, medical coding and medical billing are actually quite different from one another. As you can imagine, the process of hunting down a code that matches a patient’s injury or disease, the location of the injury or disease, the severity of the injury or disease, etc. is much different from preparing and sending a bill based on that information. It’s best, then, to examine the job responsibilities most closely associated with medical billing, as well as those specific to medical coding.
About our expert. Jan Jacobs has worked in medical offices since the early 1980's. Ms. Jacobs has worked for M.D.'s and D.O.'s in primary care and specialty care. She is employed as a senior medical biller and has been at her current job for nearly 10 years, where she uses three different billing systems.
