Medical Coding
Medical coding is the translation of documented healthcare services, diagnoses, and procedures into standardized alphanumeric codes — ICD-10-CM for diagnoses, CPT/HCPCS for procedures, DRGs for inpatient classification — used for claims submission and reimbursement.
What is Medical Coding?
Medical coding converts clinical documentation into the standardized code sets that drive reimbursement. ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification) contains 70,000+ diagnosis codes — a sevenfold expansion from ICD-9's 13,000 codes — providing specificity required for medical necessity validation and population health analytics. CPT (Current Procedural Terminology), maintained by the AMA, provides 10,000+ procedure codes used for professional and outpatient facility billing. HCPCS Level II codes, maintained by CMS, cover drugs (J codes), supplies, DME, and non-physician services (G codes, Q codes). Diagnosis-Related Groups (MS-DRGs) classify inpatient hospital stays into one of 750+ payment categories for Medicare IPPS payment. The CMS 2021 E/M guideline changes significantly redesigned outpatient coding: E/M level selection shifted from history and examination element counts to either medical decision making (MDM) complexity or total time spent on the date of service — a change that affected coding patterns for the entire industry. Upcoding (assigning higher-level codes than documentation supports) is Medicare fraud; undercoding is lost revenue. OIG Work Plan annually targets high-code E/M distributions for audit.
Why It Matters for Healthcare Analytics
Coding accuracy directly determines both revenue and compliance risk. E/M coding distribution analytics — the percentage of visits coded at each level (99202–99215) by provider and specialty — reveal under-coding patterns that suppress revenue and over-coding patterns that create audit exposure, often simultaneously within the same practice.
How Vizier Tracks Medical Coding
Upload your billing data and ask "What is our E/M code distribution by provider compared to specialty benchmarks?" — Vizier visualizes coding level distributions, identifies outlier providers, and quantifies the revenue impact of systematic under-coding versus the compliance risk of over-coding.