Get to Know the Different Types of Medical Coding Systems 

Medical coders are responsible for learning medical coding classification systems to assign the correct codes for diagnoses, procedures, equipment, and other services. These healthcare workers have an important role when it comes to patient records, as well as billing and reimbursement. Medical coders assign a specific code for every service a healthcare worker provides, every diagnostic test done, and each inpatient or outpatient medical procedure performed.

Assigning the proper medical codes helps ensure that the healthcare facility bills insurance providers correctly. Accurate medical coding also helps ensure that insurance companies cover patient claims and healthcare providers receive reimbursement from insurers. To do their job, medical coders must become familiar with medical codes, coding systems, code set information, and more.

What Are Medical Codes?

Medical codes are alphanumeric codes used to document procedures, diagnoses, equipment, and other healthcare services. These standardized codes are part of a patient’s medical record. Medical codes provide insurance companies or other insurers with information on the types of services a patient receives. This can include a formal diagnosis, and any treatments or procedures performed. Medical coders read through the documentation on doctor’s notes, lab results, and other information to determine the proper codes to use.

Why were medical coding systems developed in the first place? Since there are so many types of medical conditions, injuries, illnesses, treatments, and procedures, standardized coding systems are needed to track them on each patient’s medical record. Medical coding classification systems offer a more accessible and organized way to report and track diagnoses and procedures for billing or other purposes.

Types of Medical Coding

Medical coding systems are used in healthcare facilities throughout the world. Having standardized coding systems offers a convenient way to ensure accurate medical coding. Medical coding systems consist of alphanumeric codes that medical coders input into patient records as part of the billing process. Some codes are used for diagnostic services, while others are used for procedures and other treatments. Procedural and diagnostic medical coding systems are often used together on patient records.

Medical coders aren’t expected to memorize thousands of codes for these coding systems. Instead, they familiarize themselves with code sets and use software to find the codes needed for patient records. For those who are thinking of working in medical coding, learning a bit about the different types of medical coding systems can be helpful.

ICD

The International Classification of Diseases (ICD) is the world’s most commonly used coding system. The World Health Organization (WHO) maintains this coding system, while countries that are part of the WHO make modifications or adjustments to it as needed. ICD codes cover every type of illness and injury known to the medical field, including chronic conditions, acute illnesses, and infectious diseases. This coding system also includes codes for the causes of injuries and the circumstances surrounding injuries, such as the activity being done when it happened. ICD also includes procedural codes for inpatient services in hospitals.

What Is ICD-10 Code?

ICD-10 is the 10th edition of the ICD coding system. The previous edition, ICD-9, originally came out in 1979. ICD-10 in the U.S. includes two different code sets, one covering diagnoses and the other covering inpatient procedures in hospital settings. The development of these code sets has allowed for more accuracy and specificity for medical coding. ICD-11, the latest edition, began being used for medical coding in January 2022 with latest release in February of 2024.

ICD-10-CM

ICD-10-CM is a Clinically Modified form of ICD-10 that includes codes for all diseases, conditions, and injuries. This code set is used for diagnoses made in any healthcare setting, including hospitals, doctor’s offices, urgent care centers, and clinics. These codes contain a maximum of seven alphanumeric characters that provide a specific description of a patient’s injury or illness. These diagnostic codes are used to determine the necessity of healthcare services and to keep track of illnesses and injuries. Overall, there are 69,000 codes in the ICD-10-CM medical coding system.

ICD-10-PCS

The ICD-10-PCS coding system is a Procedural Coding System that is used only for inpatient procedures that take place in hospitals. This code set includes 130,000 alphanumeric codes that hospitals use for surgical procedures and equipment. This code set is not used for coding any procedures and treatments that occur on an outpatient basis or in other healthcare settings besides hospitals. Medical coders use a different coding system for these procedures and treatments.

CPT

The Current Procedural Terminology (CPT) coding system is used for medical procedures and services, including inpatient and outpatient procedures. While the WHO maintains the ICD system, the American Medical Association (AMA) owns and maintains the CPT coding system. The codes in this system include modifiers that provide more specific information on the services or procedures provided. This is an integral part of making sure healthcare providers are accurately reimbursed for their services. Medical coders can stay updated on the CPT coding system with the annual guidelines that the AMA publishes.

What Is CPT Code?

CPT codes are used for procedures and treatments rather than diagnoses. Although hospitals often use ICD-10-PCS for inpatient procedures, doctors in private practices and other healthcare settings typically use CPT codes for inpatient and outpatient procedures. CPT codes are made up of five alphanumeric characters. Overall, there are over 8,000 of these codes in this medical coding system. The modifiers used with these codes give more detailed information on the services a patient received, such as the number of procedures or which part of the body the procedure was performed on.

CPT Categories

The CPT coding system is made up of different categories. These include Category I, Category II, Category III, and Proprietary Laboratory Analyses (PLA) codes. Category I includes codes for procedures and services. Category II supplemental codes are optional and meant for performance measurement. Category III temporary codes are used for services, technology, and procedures that are new or in development. PLA codes are a more recent code set used by laboratories.

HCPCS

The Healthcare Common Procedure Coding System (HCPCS) is a coding system that the Centers for Medicare and Medicaid Services (CMS) and other organizations use for coding procedures. HCPCS codes are required for procedural coding in certain cases under HIPAA. This coding system was created for Medicaid, Medicare, and similar providers to use for coding procedures as a way for these programs and organizations to bill for equipment and supplies. The latest version of HCPCS is HCPCS Level II.

What Are HCPCS Codes?

HCPCS codes are alphanumeric codes used for coding procedures and treatments for billing or other purposes. Some organizations or programs use these codes for academic studies or quality measures. Some HCPCS codes are similar to CTP codes, but HCPCS codes also include codes for services that doctors don’t directly provide, such as ambulance rides to the ER. HCPCS codes can also be used for prescription drug use, medical equipment, and other purposes. This differs from CPT codes, which only refer to procedures rather than supplies and other items.

Modifiers

Modifiers are alphanumeric codes used with CPT and HCPCS codes to provide more accuracy. These two-character modifiers give insurance companies and other payers more detailed information on the services provided, such as payment instructions or patient status. These modifiers might also indicate which body part a procedure or service was done on or a reason for changes to the service provided. Using these modifiers helps ensure more accurate billing, which benefits patients, healthcare providers, and insurance companies or payers.

Others

ICD, CPT, and HCPCS aren’t the only medical coding systems that are in use in the United States (U.S.). A few other coding systems are also used in certain situations or settings. Although medical coders might not use all of these, learning about them is still helpful. The following are some other medical coding systems used in the U.S.

CDT

The Code on Dental Procedures and Nomenclature (CDT) coding system is used in dental settings. The American Dental Association (ADA) maintains this five-character coding system. Each code starts with “D” and is used for coding dental services, oral procedures, and other dental services.

NDC

The National Drug Code (NDC) is a code set that the Federal Drug Administration (FDA) uses for tracking and reporting drug packages. These codes are made up of 10 to 13 alphanumeric characters. Federal agencies, healthcare providers, and drug manufacturers use this coding system to track drugs used for medical purposes.

MS-DRG and APC

Medicare Severity Diagnosis Related Groups (MS-DRG) and Ambulatory Payment Classifications (APC) are federal code sets for certain services. For example, hospitals use MS-DRG codes to receive reimbursement for patient stays. These codes include patient attributes, such as principal diagnosis, discharge status, and procedures performed. APC codes are used for hospital outpatient services as part of the Outpatient Prospective Payment System (OPPS). CMS maintains APC and MS-DRG code sets.

Who Uses Medical Coding Classification Systems?

A wide range of healthcare and medical facilities use medical coding classification systems, including hospitals, private practices, and outpatient clinics. These facilities use medical coding for billing purposes. However, other organizations use these classification systems as well. Insurance companies and government health programs, such as Medicare, use medical coding classification systems for different purposes. These organizations and businesses might use these systems for billing and reimbursement purposes, to keep track of disease outbreaks, or to bill for medical supplies.

Importance of Medical Coding Systems

What might happen if medical coding systems weren’t part of standard billing procedures? This could make it much harder for doctors, hospitals, and other healthcare providers to be accurately reimbursed for the services they provide. Without standardized codes, patients might also have a more difficult time getting health insurance companies to cover the services they receive. Delays in billing could result in delayed services for patients, leading to lower-quality care and poorer outcomes. Medical coding systems play a crucial role in keeping the medical billing process running smoothly so that patients receive prompt care, and healthcare providers receive timely reimbursement.

Start Your Medical Coding Journey at Bryant & Stratton

If you’re considering a career as a medical coder, having the proper education is essential.

Please contact Bryant & Stratton College for more information on our diploma and degree programs for medical coding. These include a Medical Billing and Coding Diploma and a Medical Reimbursement and Coding Associate Degree. These programs provide the training needed for a successful career as a medical coder. During these programs, students learn about medical coding systems in classes focusing on ICD, CPT, HCPCS, and more. Other courses cover reimbursement, electronic records, computing skills, and other relevant areas. Both medical coding programs are available online and on certain Bryant & Stratton College campuses in Wisconsin, Virginia, and New York. We can assist you in choosing the right program for your career as a medical coder.