Why is Medical Coding Done?

Medical coding is the process of translating a doctor’s notes,

prescriptions, and medical reports into standardized codes (ICD-10,
CPT, HCPCS).

🔹 1. Standardization

 Every doctor writes prescriptions and notes differently.

 Insurance companies cannot read every single handwritten note.

 Codes (ICD-10, CPT, HCPCS) create a universal medical language →

same meaning everywhere.

👉 Example: Instead of writing “heart attack,” the coder assigns ICD-10 code
I21.9. Every insurance company in the world understands that code.

🔹 2. Faster Claim Processing

 If insurance companies had to read and understand each prescription

→ it would take weeks/months.

 With coding, claims are processed electronically in seconds.

🔹 3. Accuracy & Specificity

 Prescriptions may miss details.

 Codes show exact diagnosis, procedure, and reason for the

treatment.

👉 Example:
Doctor writes: “fracture treatment.”
But coding specifies → S52.521A = “Torus fracture of lower end of right
radius, initial encounter.”
This avoids confusion and ensures correct payment.

🔹 4. Legal & Ethical Compliance

  Codes prove that the billed service was medically necessary and
matches the diagnosis.

 Prevents fraud, unnecessary billing, and overcharging.

🔹 5. Statistics & Research

 Governments and health agencies use codes for tracking diseases,

planning resources, and research.

 Example: During COVID-19 → special ICD-10 codes (U07.1, U09.9) were

used to track cases worldwide.

Why can’t we send prescriptions directly to insurance?

 Prescriptions are not standardized → hard to read.

 Insurance systems are electronic and only accept claims in code form.

 Without codes → claims will be denied or delayed.

Simple Summary for Students:

Medical coding is like translating a doctor’s language into a digital
insurance language.

 Doctors → use medical terms.

 Coders → convert them into codes.

 Insurance → reads the codes, approves payment.

 Example Case

 Doctor’s Note (Prescription / Documentation)

 “Patient came in with severe chest pain. ECG done, showed acute
myocardial infarction. Patient admitted and given thrombolytic
therapy.”

 Step 1: Diagnosis (ICD-10-CM)

 “Acute Myocardial Infarction” → I21.9 (Acute myocardial infarction,
unspecified).

 Step 2: Procedure (CPT / HCPCS)

 ECG (Electrocardiogram, routine with interpretation) → 93000.

 Thrombolytic infusion (IV infusion, therapeutic) → 96365.

 Step 3: Claim Form (CMS-1500 for outpatient / UB-04 for

inpatient)

 Instead of sending a handwritten note, the claim looks like this:

 Diagnosis Code (ICD-10): I21.9

 Procedure Codes (CPT/HCPCS): 93000, 96365

 Provider Info, Patient Info, Insurance Info → all standardized in

claim form

 Step 4: Insurance Processing

 Insurance system reads codes:

 I21.9 = Heart Attack (diagnosis).

 93000 = ECG test (procedure).

 96365 = IV infusion (treatment).

 The system checks if the procedures are justified by the diagnosis.

 If yes → claim approved.

 If mismatch (e.g., billing an eye test for a heart attack) → denied.

 Step 5: Payment
 Insurance pays hospital for ECG + infusion.

 Patient pays only co-pay / deductible if applicable.

Summary for Students:

If we sent just “Heart attack patient treated with ECG and IV therapy”
→ the insurance company cannot process it.
But with codes (I21.9, 93000, 96365), the system immediately
understands, checks, and pays.

 Claim
 Medi  Insurance
Form
 Doctor’s cal Processin
 Step (CMS-
Note Code g&
1500/UB
s Payment
-04)

 “Acute  Insurance
 Box for
myocardia  ICD- recognizes
 Diagno Diagnosis
l infarction 10: as a
sis Codes →
(heart I21.9 covered
I21.9
attack).” condition.

 Checked →
 “ECG done  Box for
 CPT: ECG is
 Proced with Procedure
9300 appropriat
ure 1 interpretat Codes →
0 e for chest
ion.” 93000
pain/MI.

 Checked →
 Added as
 “IV IV infusion
 CPT: another
 Proced thrombolyt justified by
9636 Procedure
ure 2 ic therapy heart
5 Code →
given.” attack
96365
diagnosis.

 Insurance
 I21.9, system
 Handwritt  Claim
9300 auto-
 Final en note submitted
0, processes,
Claim converted electronic
9636 approves,
into codes. ally.
5 and issues
payment.
  Claim
 Medi  Insurance
Form
 Doctor’s cal Processin
 Step (CMS-
Note Code g&
1500/UB
s Payment
-04)

 Hospital/
doctor paid
 Payme → Patient
 N/A  N/A  N/A
nt pays only
co-pay/ded
uctible.

 Would you like me to also prepare a side-by-side table (Doctor’s

Note → Codes → Claim Form → Payment) for your Word/teaching
material? That will make it even easier for students to visualize.

 Ok

 ChatGPT said:

 Great 🌸 Here’s the side-by-side table you can copy into your Word
notes/slides to make it very clear for your students: