Importance of Medical Code to Insurance

Importance of Medical Code to Insurance – With health and disease becoming a major issue globally today, getting more coders involved in the health care field has become even more important.

But what is a medical code? A medical coder, clinical coder, or diagnostic coder is a professional in the medical field who analyzes clinical documents and establishes standard codes for those documents using appropriate classification systems.

They provide medical coding guidelines and advice to help doctors, nurses, and other medical staff organize the way they treat patients. There are three main types of medical coding.

  • International Classification of Diseases (ICD): Codes used to describe causes of illness, injury or death.
  • CPT (Current Procedural Terminology): Covers anesthesia, surgery, pathology, radiology, measurement procedures, and new technological changes in the medical field.
  • HCPCS Medical Common Procedure Coding System): This includes outpatient hospital care, medical assistance, and Medicare.

Let’s take a look at some reasons why coding is necessary in the medical field.

Data Systems

When coding is combined with hospital data systems, a powerful tool is created. As a result, large amounts of data from various hospitals, clinics and other sources are stored, accessed and used in one massive online data system. This implementation helps transfer patient data from any hospital to any other hospital for medical purposes. This information helps doctors connect better and make smarter decisions, especially in life-and-death situations.

Patient Care

Coding is required for medical claims filed with insurance companies and refunds involving claims between insurance companies and patients. Medical records, patient medical needs, laboratory results, pathology records (if any) and other relevant documents are required to transfer information for billing-related purposes. Match payment is only possible if the required diagnostic code is available, which also means confirming that the medical claim has been denied by the insurance company.


Medical billing and coding are subject to many national and state rules and guidelines. Coders in this field also have a responsibility to protect the privacy of patients and their families. They should have taken safeguards to keep confidential details about the patient and his medical background in a safe place.

Electronic medical records fall under the International Classification of Diseases (ICD-10) codes issued by the World Health Organization (WHO).

Medical coding analysts are at the forefront of medical data analysis. They work in many types of health care settings and do not necessarily work in hospitals and clinics. Their invaluable services are very useful for research and development in the medical field.