Medical coding is the translation of narrative medical record text into numeric data for the purpose of communicating data to insurance companies and establishing clinical outcomes. 

There are a variety of locations where medical services are rendered and coding for these services varies depending on the types of services performed.

The three key locations where medical coding is used are: 

  1. Outpatient hospital facility services
  2. Inpatient hospital facility services 
  3. Professional services (physician and non-physician practitioners)

Outpatient and inpatient hospital facility services are considered technical component services. Technical services include, but are not limited to hospital staff, hospital equipment, and hospital supplies. Professional services include the physician and/or other provider of care, such as physician assistant, nurse practitioner, and anesthesiology assistant, services rendered. All professional services will have a corresponding medical record note from the provider to describe the services rendered.

There are three primary coding systems utilized to report services provided regardless of the site where services are rendered.

Current Procedural Terminology (CPT)

CPT codes are utilized to report procedures and services provided to patients or the services that are actually performed on behalf of the patient. CPT codes are used to report visits, anesthesia administration, invasive and non-invasive surgery procedures, and diagnostic procedures which include radiology and lab procedures. These codes are used to report procedures performed in the outpatient hospital facility, as well as inpatient and outpatient professional service areas.

International Classification of Diseases Version 10 (ICD-10) 

ICD-10 codes are utilized to report the reason a patient is treated. ICD-10 is split into two different systems: ICD-10-CM and ICD-10-PCS. ICD-10-CM replaces ICD-9 Volume 1 & Volume 2, the sections used to report patient diagnoses in medical coding. This reporting system is used by all provider types in all healthcare settings. The abbreviation CM stands for Clinical Modification. ICD-10-PCS replaces ICD-9 Volume III, the section used to report procedures performed in the inpatient facility setting only. The abbreviation PCS stands for Procedural Coding System. 

Healthcare Common Procedural Coding System (HCPCS) 

HCPCS codes are used to report supplies, drugs, and temporary codes developed to use in reporting new procedures not yet included in the CPT coding system. HCPCS codes are used in the outpatient hospital facility and professional service areas. All three coding systems will be discussed in class and students will learn differences in coding rules within the outpatient facility, inpatient facility, and professional service locations.

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