Medical Coding

Medical coding is a little bit like translation. Coders take medical reports from doctors, which may
include a patient’s condition, the doctor’s diagnosis, a prescription, and whatever procedures the doctor
or healthcare provider performed on the patient, and turn that into a set of codes, which make up a
crucial part of the medical claim.

There are three sets of code you’ll use on a daily basis as a medical coder:

ICD ( International Classification of Diseases)

- These are diagnostic codes that create a uniform vocabulary for describing the causes of injury, illness
and death. This code set was established by the World Health Organization (WHO) in the late 1940s

ICD-10-CM. This means it’s the 10th revision of the ICD code. That “-CM” at the end stands for “clinical
modification.” So the technical name for this code is the International Classification of Diseases, Tenth
Revision, Clinical Modification.

The clinical modification is a set of revisions put in place by the National Center for Health Statistics
(NCHS), which is a division of the Center for Medicare and Medicaid Studies (CMS).

The Clinical Modification significantly increases the number of codes for diagnoses. This increased scope
gives coders much more flexibility and specificity, which is essential for the profession.

CPT (Current Procedure Terminology)

- used to document the majority of the medical procedures performed in a physician’s office. This code
set is published and maintained by the American Medical Association (AMA).

CPT codes are five-digit numeric codes that are divided into three categories.

The first category is used most often, and it is divided into six ranges. These ranges correspond to six
major medical fields: Evaluation and Management, Anesthesia, Surgery, Radiology, Pathology and
Laboratory, and Medicine.

The second category of CPT codes corresponds to performance measurement and, in some cases,
laboratory or radiology test results. These five-digit, alphanumeric codes are typically added to the end
of a Category I CPT code with a hyphen.

The third category of CPT codes corresponds to emerging medical technology.

HCPCS (Healthcare Common Procedure Coding System)

- commonly pronounced as “hick picks,” are a set of codes based on CPT codes.

Developed by the CMS (the same organization that developed CPT), and maintained by the AMA

codes primarily correspond to services, procedures, and equipment not covered by CPT codes. This
includes durable medical equipment, prosthetics, ambulance rides, and certain drugs and medicines.

The HCPCS code set is divided into two levels.

 The first of these levels is identical to the CPT codes that we covered earlier.
 Level II is a set of alphanumeric codes that is divided into 17 sections, each based on an area of
specificity, like Medical and Laboratory or Rehabilitative Services.

MEDICAL CODING VOCABULARY & KEY TERMS

CATEGORY (CPT)
The CPT code set is divided into three Categories. Category I, which is the largest and most commonly
used, describes medical procedures, technologies and services. Category II is used for performance
management and additional data. Category III houses the codes for emerging and experimental medical
procedures and services.

CATEGORY (ICD)

In ICD, the category is the first three characters of the code, which describes the basic manifestation of
the injury or sickness. The category is all that is needed to accurately describe the condition of the
patient, but more often than not the coder must list a more detailed description of the injury or illness
(see “Subcategory,” and “Subclassification”)

CLINICAL MODIFICATION

This designation, created by the National Center for Health Statistics, is added to the ICD codes sets
when they are implemented in the United States. This term is abbreviated “-CM” and is added to the
end of the ICD code title.

CMS

The Center for Medicare and Medicaid Services. This federal agency updates and maintains the HCPCS
code set and is one of the most important organizations in healthcare today.

CPT

CPT is a large set of codes that describe what procedure or service was performed on a patient. This
code is divided into three Categories, with the first Category being the most important and widely used.
CPT codes are an integral part of the reimbursement process. These codes are five characters long and
may be numeric or alphanumeric.

HCPCS

Healthcare Common Procedure Coding System, pronounced hick-picks. This is main procedural code set
for reporting procedures to Medicare, Medicaid, and a large number of other third-party payers.
Maintained by CMS (See “CMS”), HCPCS is divided into two levels. Level I is identical to CPT, and is used
in the same way. Level II describes the equipment, medication, and out-patient services not included in
CPT.

E-CODES

E-codes are a set of ICD-10-CM codes that includes codes for external causes of injury, such as auto
accidents, poisoning, and homicide.

EVALUATION AND MANAGEMENT (CPT)

Evaluation and Management, or E&M, is a section of CPT codes used to describe the assessment of a
patient’s health and the management of their care.

ICD

The International Classification of Diseases is a set of medical diagnostic codes established over a
hundred years ago. Maintained today by the WHO. ICD codes create a universal language for reporting
diseases and injury. ICD codes are numeric or alphanumeric. They have a three-character category
which describes the injury or disease, which is typically followed by a decimal point and two-to-four
more characters, depending on the code set, which give more information about the manifestation
and/or location of the disease.

MODIFIER

A modifier is a two-character code that is added to a procedure code to demonstrate an important

variation that does not, by itself, change the definition of the procedure. CPT codes have numeric
modifiers, while HCPCS codes have alphanumeric modifiers. These are added at the end of a code with a
hyphen, and may provide information about the procedure itself, that’s procedure’s Medicare eligibility,
and a host of other important facets.

MODIFIER EXEMPT (CPT)

Certain codes in CPT cannot have modifiers added to them. This is a fairly short list that can be found in
the appendices of the CPT manual.

NCHS

The National Center for Health Statistics. The NCHS is a government agency that tracks health
information, and is responsible for creating and publishing both the clinical modifications to ICD codes
(See “Clinical Modification”) and their annual updates.

PATHOLOGY

The science of the causes and effects of disease.

SUBCATEGORY

In ICD codes, the subcategory describes the digit that comes after the decimal point. This digit further
describes the nature of the illness or injury, and gives additional information as to its location or
manifestation.

SUBCLASSIFICATION

The subclassification follows the subcategory in ICD codes. The subclassification further expands on the
subcategory, and gives additional information about the manifestation, severity, or location of the injury
or disease.

TECHNICAL COMPONENT

The portion of a medical procedure that concerns only the technical aspect of the procedure, but not
the interpretative, or professional aspect. A technical component might include the administration of a
chest X-ray, but would not include the assessment of that X-ray for disease or abnormality.

WHO

The World Health Organization. This international body, which is an agency of the United Nations,
oversees the creation of ICD codes and is one of the most important organizations in international
health

Z-CODES

These codes describe circumstances outside of injury or disease that cause a patient to visit a health
professional. This may include a patient visiting a doctor because of family medical history.

ICD-10-CM

LAYOUT AND ORGANIZATION

 ICD-10-CM is a seven-character, alphanumeric code.

 Each code begins with a letter, and that letter is followed by two numbers. The first three
characters of ICD-10-CM are the “category.”
 The category describes the general type of the injury or disease. The category is followed by a
decimal point and the subcategory. This is followed by up to two subclassifications, which
further explain the cause, manifestation, location, severity, and type of injury or disease.
 The last character is the extension.The extension describes the type of encounter this is.
 Every encounter after the first is listed as a “subsequent encounter.”
 Patient visits related to the effects of a previous injury or disease are listed with the term
“sequela.”
 The first digit of an ICD-10-CM code is always an alpha, the second digit is always numeric, and
digits three through seven may be alpha or numeric.

The ICD-10-CM code manual is divided into three volumes.

  Volume I is the tabular index.
 Volume II is, again, the alphabetic index.
 Volume III lists procedure codes that are only used by hospitals.
 ICD-10-CM also documents laterality—which side the injury or infection is on;
 and substantially increases the amount of information about the diagnosis.

CONVENTIONS

ICD-10-CM makes use of a number of conventions that help guide the coder to correct diagnosis codes.
Some of these conventions include:

 Brackets [ ]
 Parentheses ( )
 “Includes”
 “Excludes”

Two types of “Excludes” conventions

 Excludes1: lists codes that should never be coded with the code listed above. You can think of
this as a “hard excludes.”
 Excludes2: lists other codes for conditions/injuries that may be a part of the condition, but are
not included here. This is more of a “soft excludes.”

ICD-10-CM’s Excludes notes have been divided into two ‘levels

 Excludes1 informs coders that the codes listed in the note may not, in any circumstance, be
listed with the code that contains the Excludes1 not
 Excludes2 - An Excludes2 note indicates that the code above the note does not include the
other conditions listed below the note.

USING ICD-10-CM

● ICD-10-CM works very similarly to ICD-9-CM

● Like ICD-9-CM, we begin with the medical report

● Coders note and abstract information from the medical report

● We use the alphabetic index (Vol. I) to find codes, but we always confirm in the Tabular (Vol. II)

ICD-10-CM CONVENTIONS

● ICD-10-CM shares a number of conventions with ICD-9-CM, which we covered in our previous course

● We’ll focus on the two new kinds of “Excludes"

EXCLUDES1

● Conditions listed under an Excludes1 note may not, under any circumstances, be used with the code
that houses the Excludes1 note.

● Think of this as a “hard” excludes

● Informs the coder that they are in the completely wrong place

EXCLUDES2

● The conditions found under an Excludes2 note, while similar or relevant to the code that houses
them, are not included in that code

● Think of this as a “soft” excludes

● You can think of Excludes1 sort of like “See”. Tells the coder they’re in the wrong place

● Think of Excludes2 as a “See Also”.Tells the coder of another place to look, if

necessary