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What is Medicare Coding?

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  • Written By: KS Dunham
  • Edited By: C. Wilborn
  • Last Modified Date: 20 October 2019
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Medicare coding is a specific form of medical coding that provides billing support for healthcare providers giving care to individuals who are covered under Medicare, the United States federal government's insurance program for older adults and adults with certain types of disabilities. Medicare coding service is provided by individuals specially trained in this process. Medical coders often obtain degrees or specialty certifications.

Work as a medical coder requires the coder to look at the description of a medical procedure, disease, injury, or other healthcare service in a healthcare record and then assign the appropriate code to the service. These codes come from several different sources, and may be expressed in numbers only, or in a combination of letters and numbers. Efficient and accurate coding is essential to reimbursement under Medicare coding guidelines.

The most common codes Medicare coders use in outpatient physicians' office are Current Procedure Terminology (CPT) codes. The CPT set of codes was created by the American Medical Association (AMA). The AMA also governs what new codes are introduced, and when codes are changed or subdivided. CPT codes are five digits and only contain numbers.

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The CPT codes are the first level of codes using in Medicare coding. A second, more detailed set of codes is known as the Healthcare Common Procedure Coding System (HCPCS). The HCPCS codes are also five digits, but the codes always begin with a letter, followed by four numbers. These codes cover not just procedures but other type of healthcare-related services a physician, nurse practitioner, nurse, medical assistant, or other professional could provide. These might include medical transportation, patient education, or certain occupational therapy or physical therapy procedures.

People working in the field of Medicare coding do not have every HCPCS or CPT code memorized, although an experienced coder may be able to assign many codes without consulting reference material. Instead, coders use books or specifically designed software to determine the appropriate code for the service described in the medical chart or record. Although computerization of medical records has in some cases decreased the need for medical coders in large institutions, smaller institutions and single doctor practices are usually still in need of coders. Often the sub-specialty of Medicare coding is outsourced to individuals who do coding and billing from home. This can provide a substantial savings to healthcare agencies that then do not have to pay benefits or provide space in order to receive this service.

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