Importance of medical coding for insurance

With health and disease becoming a major issue all over the world today, it has become MUCH more important to engage more and more coders in the medical field for insurance. But what is medical coding? A medical coder, clinical coding officer or diagnostic coder are professionals involved in the healthcare industry who analyze clinical documents and assign standard codes to them using appropriate classification systems. They provide medical coding guidelines and suggestions to help regulate the way doctors, nurses, and other medical personnel provide care to their patients. There are three main types of medical coding:

1) ICD (International Classification of Diseases): These are codes used to describe the cause of illness, injury or death.

2) CPT (Current Procedural Terminology): These relate to anesthesia, surgery, pathology, radiology, measurement procedures and new technological changes in the medical field.

3) HCPCS Healthcare Common Procedure Coding System): These include outpatient hospital care, medical assistance and Medicare.

Let’s look at some of the reasons why coding is necessary for the medical sector.

When the coding is linked to the data systems of the hospitals, a powerful tool is created. As a result, a large number of data from various hospitals, clinics and other sources are stored, accessed and used from one large online data system. This implementation helps in the transfer of patient data from one hospital to another for medical purposes. This information helps doctors to be more connected and make wiser decisions, especially in cases involving the patient’s life-or-death situation.


Coding is much needed for reimbursements, including the submission of medical claims to insurance companies and bills between insurers and patients. The transfer of information for billing-related purposes requires medical records, the patient’s medical needs, laboratory results, pathology reports (if any), and any other related documents. Appropriate payment is only possible once the required diagnostic codes have been entered, which also means verifying that the medical claim is rejected by the insurance company.


Medical billing and coding are governed by the rules and guidelines of many countries and states. Coders in this field are also responsible for protecting the privacy of patients and their families. They are expected to take precautions to keep confidential information about the patient and his/her 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).

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Medical coding analysts are on the front lines of healthcare data analysis. They work in many types of healthcare facilities and not necessarily in hospitals and clinics. Their valuable service is highly functional for medical research and development.