Deciphering the Medical Billing Codes Behind Your Healthcare Bills

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By DeVry University

October 29, 2021
5 min read

Chances are, you probably receive numerous medical bills each year, whether from a doctor’s office, hospital or urgent care clinic. But how much do you really understand about the information that is being provided?

Before you submit your payment, take some time to learn about the medical billing codes included on your invoice and how you can identify potentially costly errors.

Types of Medical Billing Codes

There are three types of medical billing codes used in the U.S. healthcare system:

  • International Classification of Diseases (ICD) codes
  • Current Procedure Terminology (CPT) codes
  • Healthcare Common Procedure Coding system (HCPCS) codes

With around 55,000 codes in the ICD-11 database alone, it’s no surprise that there are medical billing codes to cover almost every diagnosis and treatment imaginable. They range from everyday conditions to strange medical billing codes that cover mishaps like injuries from roller coaster rides, neck pain caused by piano playing and attacks by a sea lion.

While it's good to know that there's a medical code for whatever ails you, the vast number also means that the medical billing and coding process can be highly complex and potentially error-prone. Patients must educate themselves to know what to look for and how to advocate for themselves when needed.

How To Decipher Medical Billing Codes

Typically, you'll find both ICD codes and CPT codes in a medical bill. The ICD codes denote your diagnosis and are used on hospital records, medical charts, visit summaries, bills and other patient paperwork to ensure the proper delivery of medical care. Meanwhile, the CPT codes correspond to the medical treatments you received during a visit.

The ICD-10 codes consist of a letter, then two digits to the left of the decimal point and one digit to the right. The letters categorize diseases based on specific conditions or organ systems. For example, A refers to infectious and parasitic diseases, C denotes cancer, E covers endocrine, nutritional or metabolic conditions and K stands for the digestive system. So E10.9 refers to type 1 diabetes and K21.9 is for gastroesophageal reflux disease (GERD).

With the release of ICD-11, codes will be updated with the addition of one number preceding the letter and one at the end. For instance, X98.6 in ICD-10 will be changed to 0X98.60 in ICD-11. The letters I and O will no longer be used in order to avoid confusion with the numbers 1 and 0.

When you leave a medical appointment or receive a medical bill, you'll get a summary of the visit that includes various codes. You can also find these codes in the explanation of benefits (EOB) from your insurance provider, Medicare or other payers.

The ICD codes appear in the "diagnosis" or "Dx" section of a medical bill. To find out what an ICD code stands for, you can go to the Centers for Disease Control and Prevention (CDC)'s ICD-10 searchable database, select the current ICD-10 code set and enter the code in the search box.

To see what service or procedure a CPT represents, visit American Medical Association (AMA)'s website. From there, you'll accept an end-user agreement and create an account. Then, you can enter the 5-digit CPT code to perform a search. You can also enter the name of a treatment or procedure to look up the corresponding CPT code, but you may have to sort through multiple results.

You'll also see that each CPT code is associated with a monetary value. It represents the national average that Medicare pays a provider for the service rendered. Different geographic regions are assigned a relative value amount (RVU), a percentage of the average payment. You can calculate the amount paid in your location by multiplying the average amount by the RVU.

Keep in mind that these values are for Medicare payment. The amount your healthcare provider gets paid may be different if you have private insurance. It could be more or less than the amount listed based on their negotiation with the payer.

What Medical Billers and Coders Do

To resolve discrepancies between the medical billing codes on your invoice and the treatments you have received, you'll work with the healthcare provider's billing department to negotiate the payment or resubmit the claim. As such, it's helpful to understand how medical billing and coding specialists work.

Medical billers and coders have completed professional training to learn how to handle a complex network of information and payment transactions that underlies the modern healthcare system.

After a patient's visit, medical coders will review the patient's medical record. They identify the diagnosis, the treatments performed, the supplies used and the services provided. Then, they'll assign standardized alphanumeric codes to these items to reflect the patient's care.

Medical billers will use the codes to submit technical documents and medical claims to Medicare or insurance companies. They'll also check each patient's benefits and eligibility for treatment coverage, review patient bills for completeness, follow up on claims left unpaid by health insurance companies or other payers, and help patients get pre-authorizations and referrals for specialized procedures.

If you have questions or issues about your medical bill, your provider's medical billers and coders are often the ones to help you navigate the process of getting your claims paid. In today's complex healthcare system, they're the glue that binds patients, healthcare providers and health insurance companies or other payers together to ensure that our healthcare system works seamlessly.

Interested in Medical Billing and Coding?

If medical billing and coding interests you, consider pursuing a certificate program. At DeVry, our medical billing and coding programs can be completed in as little as 1 year1 and can provide you with the skills you need to be prepared to pursue a variety of healthcare-related careers.

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1Not including breaks. Assumes year-round, full-time enrollment.