Importance of Medical Coding for Hospitals

Medical coding is the process of reviewing patient medical records and assigning codes to patient diagnoses and procedures. Medical coding serves a variety of important functions in a hospital setting.

Reimbursement

• Medical coding provides one of the most important functions for hospital reimbursement. Medical codes are translated into reimbursement amounts on bills, which are submitted to insurance payers for reimbursement. Incorrect code assignment results in denied payments to a hospital.

Tracking

• Hospitals use medical codes to easily track information in order to improve services. For example, hospital-acquired infections, or infections caused by the health care provider, are tracked in order to provide education and avoid future infections.

Training

• Teaching hospitals may train future medical professionals by using medical code information. When training, medical codes can be used to easily access case studies on specific illnesses, diagnoses and treatments.

Reporting

• Hospitals use medical codes for a variety of reporting purposes. Medical codes help to track resources used so that future planning is more effective. They are also used to help evaluate medical care planning.

Marketing

• Medical codes are also used to determine marketing campaigns. For example, if a hospital notices that heart attacks are coded frequently, it may launch a community marketing campaign on heart health.