An Introduction to Coding, The Big Picture

Definition of Coding

It is important to understand what coding actually is. There are many misconceptions of coding. For example, it is not just data entry of number and codes. Coding is taking documentation given by a physician and translating that documentation into alphanumerical codes for diagnosis documented and for any treatment documented in the patient chart. The codes are then used for purposes of billing Medicare, Medicaid, and commercial insurance companies for payment. Codes are also used for reporting statistics and reports to the state and federal governments.

Coding is done in many healthcare settings such as hospitals, physician offices, outpatient surgical centers, health maintenance organizations, mental health care facilities, long term care facilities, rehabilitation facilities, and skilled nursing facilities. Coding specialists are also used in insurance companies, billing companies, government agencies, and for cancer reporting. The good news is that the demand for quality, skilled, and educated people in the Health Information field is rapidly growing.

Coding is a critical piece in what is called the “revenue cycle”. Without coding, the revenue cycle would not be completed. The revenue cycle starts with a patient registering and ends with the facility providing the patient treatment being paid in a timely manner. Coding can be called the “lynch pin” in the revenue cycle. All aspects of the revenue cycle are important and need to be done well, but the coding systems are what bridge the documentation about the treatment and receiving payment for the treatment. Therefore, coding with skill, accuracy, and integrity is critical in the Health Information Field and in the revenue cycle.

Coding skill and accuracy is critical in the health information field. However, just as important in coding is having integrity in how you code. There are standards and guidelines that are available to a coder to insure they are coding with integrity.

Coding with integrity involves the following aspects:

· Understanding the coding guidelines provided in each code book when coding.

· Understanding the legal aspects of coding.

· Understanding the standards set for coding.

· Understanding coding ethics.

Understanding the major guidelines and standards established in the Health Information field is very important.

Google and/or research on the AHIMA website ( the following documents:

· AHIMA Code of Ethics (AHIMA is the American Health Information Management Association)

· HIPAA (The Health Insurance Portability and Accountability Act of 1996

· AHIMA Standards of Ethical Coding

As you research and read these documents, consider the following:

· Are these documents clear and detailed?

· Do you feel the documents are complex or simple/straightforward?

· What did you feel about coding after reading these documents?

· Do you feel they are necessary documents for a coder to follow?

· If they are important to follow, why?

· What do you think would occur if there were no standardized documents to follow?

Coding Systems and Resources

There are three main coding systems.

· ICD 10 CM – Coding system used for inpatient and outpatient diagnosis coding.

· ICD 10 PCS– Coding system used for inpatient procedure coding only.

· CPT and HCPCS – Coding system used for outpatient procedure coding only.

Each of these coding systems has their own code book. To become a successful coding specialist and a successful Health Information employee it is vital to know how to use each coding system and their coding books.

Another foundational coding tool is coding software called an “encoder” that helps coders find codes more efficiently than using a book.

However, it is very important that all coders know how to use their code books as well as their coding software. There are two coding software systems used in all Rasmussen coding courses. They are call a 3M Encoder and a Quantim/Clintegrity Encoder. You will learn in this course how to use both.

· When you apply for a coding position, you will need to take a coding test.

· When you go on site to take a coding test, they will give you a code book to use for the test. They want to know that you know how to use a code book well.

· When you take a coding credentialing exam, you will need to know how to use the code book easily and quickly. You are not allowed to use software when you sit for the exam.

· The actual code book is always the final authority when coding. It is important to know how to check the code book for guideline and coding accuracy when needed even if using an encoder.

Everything you need to know for coding is in the code book for each coding system. Knowing how to use each codebook is foundational to becoming a successful coder in this field. Therefore, learning how to use a code book is critical.


· Remember that coding is like learning a foreign language and each coding system is a different language. Therefore, be patient with your learning curve.

· As with learning a foreign language, it is very important to practice, practice, and practice.

· Coding is a skill to be learned. Always ask questions when confused.

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