What Is Medical Coding and Why Outsource It?

If you are a physician then you know that everything that a healthcare physician does and why it was required appears on medical claim forms as a series of codes. CPT or the Current Procedural Terminology describes the surgical, medical and diagnostic services/procedures performed by physicians and other health care providers. The CPT is a collection of thousands of specific service codes and dozens of modifiers, along with clearly defined rules on how the codes must be used.

The CPT system was created and is now owned and maintained by the American Medical Association (AMA). The primary purpose of the CPT system is to cater to the reporting and data collecting purposes of public health professionals. The CPT is also essential for patients who want to bill their patient care services.

The ICD9 or the International Classification of Diseases-Ninth Clinical Modification is based on the system created by the WHO (World Health Organization). The goal of the ICD9 is to give every medical condition, injury and disease known to humanity a unique alpha-numeric code. The code is then used to then justify the medical necessity for each of the physicians’ services. Since it is the single classification system, used across American hospitals, physicians have to specify ICD9 diagnosis codes, when providing any medical service.

Who uses CPT codes?

  • Insurance companies use the data from the CPT for assessing risks and for calculating premiums.
  • The CMS or the federal government’s Center for Medicare and Medicaid Services use the CPT system to develop the Resource Based Relative Value System (RBRVS), which assists in determining the amount paid to physicians and other health care providers for medical services rendered to Medicare / Medicaid patients.
  • A large number of managed care and other insurance companies use the CPT system to support their compensations on the values recognized by the CMS.

Why are CPT codes critical?

Assigning the apt five digit CPT codes and two digit modifiers and then linking them to the correct three to five digit ICD9 diagnostic code(s) is a must for:

  • The proper billing of the services rendered by for physicians and hospitals
  • Medicare and insurance companies paying for the health care services
  • Underwriting the risk assessment and calculating the insurance premiums for health insurance companies
  • Public health researchers, medical education and medical research

How does outsourced medical coding work?

Outsourcing medical coding happens in six easy steps. It begins with the physician scanning patient charts and uploading them on a secure FTP site or sharing access to the practice management software. Skilled medical coders perform pre-coding by keying in codes for doctors, insurance companies and modifiers in the pre-coding stage. In the coding stage, the correct codes are added, taking care not to make errors related to up-coding or down-coding. In the next step, the coded files are verified for accuracy and to ensure that there are no errors. The coded charts are then uploaded on the practice management system or FTP and can also be emailed to you. The coding team will then await your feedback. Learn more about the medical coding process.

Leverage the advantages of outsourcing medical coding today

Following up on pending medical claims, dealing with denied claims, initiating collections or tracking receivable balances can shift your focus from patient care. Outsourcing medical coding is a great way to reduce billing denials, increase the efficiency in the billing process, minimize costs by 40% and also make sure that your reimbursements happen on time. Read more about medical coding.

Have you outsourced medical billing, medical coding or claims adjudications services before? If yes, were you happy with the experience? Let us know by leaving a comment in the box below. We, at Outsource2india love to hear from you!

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