Why Is Coding Documentation Needed for Medical Billing?

Medical coding and billing are some of the business functions within a health care organization. The functions work together to provide reporting and reimbursement functions so health care organizations may submit information to payers, or insurance companies. Eligibility for reimbursement requires that appropriate medical coding documentation accompany the billing claim form.

Documentation

• Documentation of medical codes allows health care providers to bill for patient services. Codes representing the patient's diagnoses and procedures or treatments performed appear on the specialized medical billing claim form. If documentation does not support a diagnosis or treatment, then payers treat the diagnosis as not existing or the treatment as not performed, and the billing claim is denied.

Medical Coding

• Medical coding entails reviewing documentation from a patient's medical record and then assigning codes that represent the patient's diagnoses and procedures in a numeric or alphanumeric format. Assigned by specially-trained professionals called coders, the medical codes correspond to reimbursement amounts for billing purposes. The medical codes are then provided to the billing department for submission.

Medical Billing

• Medical billing involves submitting the medical codes assigned to a patient's diagnoses and procedures on claim forms for reimbursement purposes. Medical billers also provide additional coding documentation in order to support or clarify information to the insurance payer.

Billing Requirements

• Insurance payers, like Medicare, provide guidelines to ensure that medical services provided treat the patient's current conditions. Services must be "medically necessary," meaning the patient needs the services to treat the diagnoses or illnesses. In addition, the services require complete and supportive documentation, and the services must have taken place to bill for them.

Denial of Claims

• In some instances, insurance payers may deny claims--or state that services provided will not receive reimbursement. This occurs for different reasons, such as non-coverage of procedures under a particular insurance plan, correct codes that were not assigned for a diagnosis or procedure, or supportive documentation did not exist to indicate that the procedure occurred. Medical billing departments may appeal the denial by resubmitting the claim. Claim resubmissions include the additional coding documentation to support the diagnosis and procedure codes reported in hopes of receiving reimbursement for the services provided.

Fraud and Abuse

• Medical coding documentation also helps to prevent billing fraud and abuse. For example, in some cases a procedure that appears twice on a billing claim form may result in increased reimbursement. Health care providers must supply supportive documentation for multiple same-code assignments to show that the procedure was performed two separate times.