What is Medical coding

Diagnostic Coding

Diagnostic coding began as a means by which statistical information was gathered to track mortality and morbidity. Subsequent changes to add clinical information resulted in a coding structure that describes the clinical picture of a patient as well as non-medical reasons for seeking care, and causes of injury. Diagnosis codes are listed in the International Classification of Diseases, 9th revision, Clinical Modifications or, ICD-9-CM.

. Procedural Coding

Healthcare Common Procedure Coding System (HCPCS) codes are grouped into two levels:

Level I HCPCS are commonly referred to as Current Procedural Terminology (CPT). They form the major portion of the HCPCS coding system, covering most services and procedures. CPT codes supersede Level II codes when the verbiage is identical.
Level II codes supersede Level I codes for similar encounters, when the verbiage of the Level II code is more specific. HCPCS include evaluation and management services, other procedures, supplies, materials, injectables and dental codes. Having a code number listed in a specific section of HCPCS does not usually restrict its use to specific profession or specialty.

HCPCS level I and level II codes, except for codes 99201-99499, are collected in the third data collection screen of the Ambulatory Data Module of the Military Health System’s computer system.

Other Specifics Regarding HCPCS Level II Codes.

Equipment and durable supplies will only be coded if the equipment/supply item is issued to the patient without expectation that the patient will return the item when no longer needed. For instance, if the patient is issued a C-PAP machine with the expectation the machine will be returned when it is no longer needed, the issue of the machine would not be coded. The personalized face mask would be issued with no expectation of return and so would be coded.


HCPCS Level II codes will only be used when the pharmaceutical/injectable is paid for directly from the clinic’s funds and is not a routine supply item. If a drug is issued by the pharmacy to the patient, and the patient brings the drug to the clinic for administration, the drug will not be coded as the pharmacy was the service issuing the drug. Inpatient ward stock will not be coded as it is part of the institutional component and is part of the diagnosis related group (DRG).

C codes.

These codes are commonly referred to as “pass-through” codes. They are usually only available for a few years at which time the item is included in a procedure or no longer used. These tend to be for high cost items. Be sure to code the item if it is paid for out of clinic funds. As with other drugs, do not code it if the pharmacy issued it to the patient. Frequently, coders will need to query the provider or the clinic supply custodian as to the method of acquisition.

CPT billing codes
CPT codes and HCPCS codes

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