Medical Billing Terms & Definitions

Understanding medical billing terms and definitions is necessary for anyone employed in the medical billing/coding/administration fields. These terms cover the gamut from codes for diagnosis and disease codes to codes for medical devices. Medical billing agents must be familiar with ICD9, CPT, diagnosis and HCPCS codes.

CPT Codes

• Current Procedural Terminology (CPT) codes consist of a number assigned to any procedure a health care provider may provide to a patient. The American Medical Association (AMA) sets these codes. Instead of listing the actual procedure performed on the patient, the number code is used. Whether the person has a check up, a heart operation or a flu shot, a number will appear and this number represents the procedure to the insurance company. Consumers can look up CPT codes on the AMA Website to determine what a certain numbered procedure represents.

Diagnosis Code

• Diagnosis codes are used to identify symptoms and diseases the patient experiences. This differs from the CPT code in that the diagnosis code would represent the symptom, for example chest pain, while the corresponding CPT code would represent the treatment provided for the symptom. Medical billing personnel use these two codes in conjunction so that insurance companies can quickly scan and match proper procedures with the proper symptoms. If the insurance company discovers that a health care provider treated a stomach ache with a remedy for the foot, they deny the claim since there is no correlation between the issue and the treatment.

HCPCS Codes

• Healthcare Common Procedure Coding System (HCPCS) is the comprehensive standardized system for classifying medical products. HCPCS codes refer to medical products, such as medical devices, not the disease itself or the procedure. These three codes, CPT, diagnosis and HCPCS, work together to report the patient's condition, treatment and devices to the insurance company. The insurance company can then process the claim based on these correct codes.

International Classification of Diseases, 9th Edition (ICD-9-CM)

• ICD9 codes are diagnostic codes for diseases and procedures. All medical billing personnel use this standardized code for coding medical records. Insurance companies use these codes to pay for the procedures performed by medical personnel.

Significance

• Using these codes for medical billing standardizes the whole system of billing. Insurance companies can quickly scan the bills to determine if the health care provider performed the proper medical procedure for the disease that is diagnosed. They can also determine that the device the patient is given is specific to the disease for which it is intended; a good example of this is providing a pacemaker to a heart condition patient. The system is an efficient means to get the hospitals and doctors paid quickly for their services.