Clinical Coding and Health Care Reimbursement

The health care system has a number of common procedures and coding that it applies to its regular processes. The main idea for a healthcare common code was to help provide better information between the insurers, providers and the suppliers. The aim was to have a common code which can be used to help reduce the time spent in understanding the messages from other people involved in the case. An intention to provide standardized codes and to help facilitate the reimbursements in a more effective manner was set out when the code was introduced. The term medical coding has been defined as, ‘Medical Coding is assigning codes to diagnoses and procedures which help in financial reimbursement from insurance companies and government agencies, software companies and consulting firms. Medical Coding is also known as insurance coding. This field generates medical coders who specialize in coding after a thorough training program and a certification process’ (Mumbai Medicals, 2001).

Healthcare organizations use a unique set of codes to help identify the message in an effective manner and to avoid any form of confusions during the claims processing and any changes in the medical procedures, technology and even the doctors. The code used by the health care is mostly a five digit alpha numeric with an initial letter.

The American Health Information Management Association has set down these rules and regulations for the prevention of losses both for the hospitals as well as the insurers. As explained by Beam, ‘HCPCS coding is the standard acronym for Healthcare Common Procedure Coding System (HCPCS). The system is designed to help simplify and organize the billions of medical claims that are processed for payment each year in the United States. Knowledge of HCPCS coding is a specialty in medical administration’ (Beam, 2010). The use of the Healthcare Common Procedure Coding System (HCPCS) has a major impact on the overall performance of the company. The use of these codes has led to prevention of any losses and has also allowed the hospitals to set up the claims management systems within the offices. With the adoption of the Healthcare Common Procedure Coding System (HCPCS) there is a chance for improvements in the training and information technology requirements which are needed by the health care providers. Also the HCPCS allows for more accurate and error free reimbursements which in turn help in reduced losses for both the hospitals as well as the insurance providers as well. The use of these codes has a major impact on the overall revenue of the hospitals and provides a chance for the hospitals to reduce the rate of claims denials as well (Buck, 2009). The other benefit is that it provides a chance for the staff to be trained for better use of information technology as well.


Beam, J. (2010, January 16). What is HCPCS Coding? Retrieved March 18, 2010, from

Buck, C. J. (2009). 2010 HCPCS Level II. Spi Pro edition: Saunders.

Mumbai Medicals. (2001). What is Medical Coding. Retrieved March 19, 2010, from

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