Have you ever heard of a classification system for medical coding? Even if you don’t think they’re easy to understand, they are. Here is a quick primer to familiarize yourself with them and have a thorough understanding of how they operate. To prepare for medical coding training, it’s good to have this knowledge handy.

How is Medical Coding Defined?

In simple terms, Medical coding is assigning numerical codes to various medical illnesses and treatments. To better track the progress of a patient’s medical care, these figures are entered into the patient’s medical file. They could, for example, be found in patient medical records or on laboratory test results.

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How Are Medical Codes Classified?

If you’ve ever visited a doctor’s office or hospital, you’re likely to have encountered medical codes. A medical diagnosis, service, or procedure is charged based on its number.

In some cases, a medical operation or service is billed improperly because it is not coded correctly. It is vital to note that some medical codes are more complex than others, and you may not be familiar with them. The following are a few different forms of medical coding:

1. ICD-10

The International Classification of Diseases, Tenth Edition, or ICD-10, is the acronym for this new classification system. In 2015, the United States implemented the new system. More codes and classifications for current illnesses and diagnoses were added to ICD-10, which replaced ICD-9.

The World Health Organization owns the ICD-10 code, which governments have accepted worldwide. The ICD-10-PCS (Procedure Coding System) replaces the ICD-10-CM (Clinical Modification) in the United States for inpatient hospital treatments. It took a long time for ICD-10 to gain general acceptance, but now it covers the vast majority of diagnoses and treatments worldwide.

2. CPT

CPT stands for “Current Procedural Terminology,” the standard code used in most medical facilities nowadays. Each year, the codes are revised and categorized into three sections:

  • Category 1: Five-digit codes that belong to a particular service or procedure
  • Category 2: Alphanumeric tracking numbers used to track execution
  • Category 3: Temporary codes for novel technologies, techniques, and services

The American Medical Association (AMA) publishes CPT (Current Procedural Terminology) codes, increasing to around 10,000. Medical, surgical, and diagnostic services can be described using the fourth edition, utilized in the United States and other nations.

Moreover, alphanumeric CPT codes are five-digit alphanumeric codes with four digits and one letter, depending on the service. CPT codes identify a patient’s medical or surgical, diagnostic, or radiological services. Payers submit these codes along with ICD-10 numbers on claim forms, and that is how reimbursement to a service or institution is determined.

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3. HCPCS Level II

The abbreviation HCPS stands for “Healthcare Common Procedural Coding System,” based on the CPT. It is common to utilize HCPCS Level II codes for supplies and items not directly tied to a physician, including ambulatory services, medications, etc.

Level I codes: The AMA’s CPT codes make up Level I codes, which are all numeric.

Level II codes: Non-physician products, supplies, and procedures not included in the CPT code set are referred to as Level II codes by HCPCS.

Level III codes: Codes from the HCPCS reference medical coding book, known as Level III codes, were created by Medicaid agencies, Medicare contractors, and private insurers for usage in specific programs and areas. Some payers prefer level III codes and the Level I and II code sets. These codes, however, are not recognized on a nationwide scale.


SNOMED is the most extensively used coding system in the medical world. Its purpose is to aid medical professionals in making global comparisons and connections among disparate medical conditions.

It’s commonly referred to as a “reference terminology” and has more than 311,000 active concepts. If you have an Affiliate license, you can utilize this for humanitarian or charitable purposes.

Moreover, the domain of medical coding is rapidly expanding, making it challenging to keep up. By 2024, the Bureau of Labor Statistics posits that the number of health technology jobs will expand by 15%, substantially faster than the national average.

Additional Coding Systems

Medical professionals use different coding systems to assist them in diagnosing and treating patients. Some examples are as follows:

Genetic codes: A database of genetic codes is maintained by the Online Mendelian Inheritance in Man (OMIM).

Drugs: The RxNorm system is one of the numerous codes used to describe medications currently on the market.

Diagnostic systems: It is possible to classify disorders according to specific diagnostic systems. The DSM is the most extensively used manual.

Medical Coding Careers

Medical coding is one of the most profitable chances for those who want to join a medical coding company in the medical billing services sector. Accreditation groups like AHIMA and AAPC give well-defined qualifications.

These prominent certificates are offered by the American Academy of Professional Coders (AAPC): Certified Professional Coder (CPC), Certified Outpatient Coder (COC), and Certified Inpatient Coder (CIC). AHIMA provides certifications such as Certified Coding Associate (CCA), Certified Coding Specialist (CCS), and Certified Coding Specialist-Physician-based (CCS-P).

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Potential Career Growth

Medical coders begin their careers by specializing in one or more medical specialties, expanding their knowledge to include new medical specializations, and eventually taking on leadership duties. Individuals with the necessary expertise and people management skills can expect to be promoted to positions such as Team Leader, Operations Manager, Vice President, etc.

Final Thoughts

Medical billing and coding professionals, including providers, rely on these systems regularly, which are the building blocks for this sector.

Accordingly, annual updates of both code sets are essential for billing and coding professionals to stay on top of code changes in both categorization systems. This avoids the risk of having claims refused or running into other compliance concerns.

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