What Is the Difference between Medical Coding and Medical Billing?

What Is the Difference between Medical Coding and Medical Billing?

Medical coding and billing have minute differences in their scope of responsibilities, though it isn’t evident from the outside.

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“Medical coding” and “medical billing” are often terms used interchangeably, and are also used together as “medical billing and coding”. These back end tasks are essential to the sustenance of a physician clinic, hospital or nursing home, and deal with recording the diagnosis and treatment provided, and securing payment from the insurance companies. Small hospitals and physician practices employ one individual for coding and billing, but subtle differences exist between the two tasks.

To put it in a sentence, medical coding involves assigning the right codes to the diagnosis and treatment provided by the doctor and the healthcare team, while medical billing deals with entering those codes into the billing software and submitting the claim to the insurance company that covers the patient, for payment of the healthcare services rendered. Billing also involves following up on that claim if required.

Coders and Billers Have Distinctive Duties

Coders perform the highly important task of converting the documentation of the providers into the appropriate procedure and diagnosis codes. They use CPT (Current Procedural Terminology) procedure codes for describing treatment procedures administered and International Classification of Diseases (ICD) diagnosis codes to describe diagnoses. Coders must be accurate while assigning codes since insurance companies depend on them to calculate the payment to be given to the hospital for the services. The codes reported must be billable and supported with relevant documentation.

Medical coding is a very important task and therefore requires trained, AAPC or AHIMA-certified coders to handle it since it is the coder who finds all the collectable money in the documentation. If the coder doesn’t spot it, you stand to lose the revenue that could possibly have come to you. The coder also makes recommendations for improving the documentation and provides tips to reveal where documentation is lacking and how it can be made to support a higher level of coding which would equate to greater potential revenue.

After the coder goes through the documentation, she passes it to the biller who reviews the codes and ensures that the claim is correctly submitted so that denials and rejections can be www.outsourcestrategies.com

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avoided. A biller is the one who makes sure that the codes are submitted properly to avoid denials. They are the ones who keep track of all the payer changes and ensure that the proper modifiers are used. They can make recommendations to the healthcare providers to capture more revenue. They also work the claims that are denied to ensure proper reimbursement.

Coders and biller must therefore be highly trained, experienced, and keep themselves updated with changes in coding patterns such as the introduction of the new ICD-10 codes.

Interacting with Patients and Medical Staff

The billing professional must enter the assigned codes to the billing software, and also explain the charges to the patients. Payment obligations and structures could sometimes be confusing.

Insurance policies could specify co-payments and co-insurance, and this must be explained to the patients. The biller needs to be very familiar with insurance guidelines.

Coders have a good deal of interaction too, but with the medical staff to get a comprehensive idea of the diagnoses made and treatment procedures carried out, since accurate coding is essential for proper payment by the insurance company. They also need to keep the medical staff well educated about the kinds of information they must include in the patient records so as to ensure smooth and efficient coding.

Coding and Billing in Smaller Practices

In smaller practices a single professional could be handling the coding and the billing process. In such circumstances the professional must be familiar with the nuances of the both the tasks.

Skill and expertise are essential here since these tasks deal with the all important cash flow of the practice, which affects its very existence.

While it may save costs for smaller practices to have one person serve as a coder and a biller, but with the complexities and focus involved in each of the tasks, as you’ve just seen, these practices have a greater risk that they could actually lose revenue instead of saving it owing to errors in claim submission or the coder not spotting the money in the documentation. It

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therefore pays to have a trained AAPC or AHIMA-certified coder and another trained, certified and experienced biller.

Why You shouldn’t Compromise on an Experienced Coder

One of the many examples of how an expert coder makes the difference can be seen in the following example. Consider the confusion that exists when reporting sepsis and SIRS (Systemic Inflammatory Response Syndrome). While there has always been confusion here, the ICD-10CM’s changing terminology has confused matters further.

A case study described by AAPC is about a 39-year-old patient who gets admitted with a community-acquired pneumonia diagnosis in the setting of presumptive influenza and concurrent sepsis. The physical exam and history document the patient having sepsis and SIRS, meeting the criteria for fever, leukocytosis and tachypnea and with pneumonia as the source.

The sputum culture also returned positive for pseudomonas pneumonia. After a six-day stay, the patient was discharged. The discharge summary did not mention sepsis and SIRS, and the progress notes mentioned them only sporadically. The coding was as follows:

Diagnostic Related Group (DRG): 194, $5,694.01 

J11.08 - Influenza due to unidentified influenza virus with specified pneumonia



J45.901CC - Unspecified asthma with (acute) exacerbation [complication and comorbidity]



E87.2CC - Acidosis



J15.1 - Pneumonia due to Pseudomonas



R09.02 - Hypoxemia



J42 - Unspecified chronic bronchitis

The reimbursement turned out to be $5,694.01.

If sepsis was mentioned in the coding, it would have been as follows: DRG: 871, $10,621.61 

A41.9 - Sepsis, unspecified organism

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

J11.08



J45.901CC



E87.2CC



J15.1



R09.02



J42

The reimbursement would have been $10,621.61, a whopping difference of $4,927.60! The ICD10 guidelines state that when a patient gets admitted with localized infection and a sepsis or severe sepsis condition, the code must first be assigned for the systemic infection and then must be followed by a localized infection code.

That’s how an experienced coder can bring you more money, since she would be totally aware of these nuances.

Recruiting a medical coder and biller is sometimes resource consuming for small practices.

Whether a small medical practice, or a large hospital or other healthcare setting, to ensure these tasks are carried out professionally, medical coding and billing responsibilities can be entrusted with experienced medical outsourcing firms specializing in medical coding, billing and related tasks.

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