What is Medical Billing and Coding? A Complete Guide

Touseef Riaz

October 13, 2020

Medical Billing and Coding


Welcome to the important world of medical billing and medical coding! There is no doubt that no other job in the medical profession impacts more lives than this one. This is because everybody involved in the overall healthcare experience, right from the patient and front office personnel to healthcare providers and payers, relies heavily on medical billers and coders.  

Delivering quality healthcare services in the US requires providers to receive adequate compensation for the work they perform in evaluating, assessing, diagnosing, treating, and following up on patients.

Did you know that people in a medical billing and medical coding career play a vital role in not just the operational aspect of the healthcare industry, but also the hospitality aspect? This is because, as an advocate for patients as well as the provider, medical billing, and medical coding specialists in the country help create a seamless and hassle-free experience throughout the life of a health claim. By accurately coding and processing claims, medical billers and coders help ensure that patients are not overcharged and also help healthcare providers offer the best administrative care.

And it is worth mentioning that medical billing and medical coding are two closely related facets of the modern healthcare industry. Keep in mind that both of these practices are closely involved in the enormously important reimbursement cycle. This cycle ensures that healthcare providers are adequately and timely paid for the services that they render.

What is Medical Billing?

Medical billing typically entails reviewing medical records and then identifying the diagnoses and medical procedures that a patient had. Note that this information is used for submitting claims to insurance providers, patients, and government programs directly get reimbursement. As medical billing involves the preparation of billing claims and submitting them to insurance providers, it helps ensure that the medical office or hospital is reimbursed the correct amount for the various services that they provide patients.

You may know that medical offices in the US receive money from private insurance providers as well as various healthcare programs, like Medicaid and Medicare, which are offered by the US government. And note that receiving adequate funds allows these medical offices to stay open. However, with suboptimal reimbursement, it can be difficult for them to offer top-notch healthcare to patients.

Medical billing companies employ specially trained and experienced personnel who are well-informed on individual payers. As a result, they can work within each organization’s specific policies in order to extract a considerably higher level of payment in a brief period.

What is Medical Coding?

Many people tend to confuse medical billing with medical coding or even consider both the same career. However, they are two different careers. Keep in mind that medical coding is different from billing and takes the descriptions of injuries, diseases, and healthcare procedures from healthcare providers or physicians and then converts them into alphanumeric or numeric codes in order to accurately describe both the diagnosis and the medical procedures performed.  Note that the diagnoses and medical procedure codes are usually taken from medical record documentation, like a transcription of physician’s notes, radiologic and laboratory results, etc.

Medical coding, like medical billing, is a key component of revenue cycle management. When done accurately and efficiently, it helps ensure that hospitals are properly reimbursed for the various services they render.

Also, it is worth noting that this system was created because, as many of us know, medicine is not always exact. Hence, there are several paths to take in preventing, assessing, diagnosing, and treating various ailments, all of which need to be recorded and properly accounted for.

And you should know that proper medical coding is essential on many levels, from ensuring accurate and timely payment for physicians to developing a valid and reliable record of patient care history. Apart from aiding the medical billing process for medical procedures administered as well as helping expedite and streamline the payment of services for doctors and physicians, medical codes also help compare projects and plan for under-served health care areas. In addition, it aids administrative functions and identifies symptoms that have to be addressed and referenced by other physicians.

What is the Difference between Billing and Coding

Medical coding and medical billing are not the same. Professionals in both of these fields use similar skills in order to achieve similar results. However, the methods that they employ and the way these professionals pursue their goals are quite different.

Medical coding entails the application of the correct codes to health records and medical claims. In most cases, it is the first part of the medical billing and medical coding process. On the other hand, medical billing involves submitting claims to organizations that cover the cost of the treatment or service, like patients and insurance agencies.

So, while job descriptions usually combine medical billing and coding within one position, technically, they are two separate job functions, and each has its own tasks and responsibilities. Also, it is worth noting that many medical offices may hire the same person for performing both jobs. However, larger facilities or organizations may divide the work into two different positions. This is why it is important to understand all the differences between these two roles.

Also, note that these two skill sets tend to overlap. This is mainly because both professions typically involve the accurate translation of medical documentation and records into standardized codes in order to communicate crucial medical information between various parties.

While a medical biller focuses on providing timely and accurate reimbursement based on the medical codes used, the main role of a medical coder is to provide the most accurate and complete picture of a medical encounter and leave the financial aspects to medical billers.

Medical billing involves the following tasks and activities:

  • Mostly involves entering data, usually with a proprietary billing software
  • The submission of insurance claims to insurance providers
  • Investigating rejected or denied claims
  • Verification of the accuracy of standard healthcare codes that medical coders use to classify various services and products

Medical coding involves the following tasks and activities:

  • Communicating with physicians, doctors, nurses, and other medical professionals in order to categorize the services that a patient has received
  • Application of HCPCS, CPT, as well as ICD-10 CM standardized codes to patients’ records in order to accurately and timely reflect all the healthcare services received
  • Examining various operative reports used during surgery for applying procedure codes
  • Staying up to date with the latest revisions of both coding standards and applicable federal regulations

Medical Billing and Coding: What Skills do You Need?

There is no doubt that the adoption of electronic healthcare records and databases and advancements in medical technology ensure that medical coders and billers have excellent employment opportunities. Medical coders and billers rely on extensive knowledge of medical codes and terminology, hospital policies, and government regulations. 

However, note that with the important role that medical coders and medical billers play in the US healthcare sector, there is also a need for communication and soft personal skills that go beyond the certifications they need to become successful specialists.

1.      Deep and Comprehensive Knowledge of Medical Science and Terminology

It is no secret that medical coding and billing goes beyond simple and menial clerical jobs. This is why medical coders and billers are expected to have a clear and deep knowledge of human anatomy and physiology.

You may know that medical terminology can be confusing if you are not familiar with it. And note that any errors in coding are likely to cause delays in payment and many other challenges. Thus, medical coders have to master the complexity and nuance of clinical language to adequately execute their job.

2.      Assertiveness

Medical coders and billers interact with various people, such as physicians, finance personnel, and other office staff. So, in case a hostile patient collection situation or case transpires, then it is crucial that they have to be assertive. So, diffusing hostile patient emotions, such as anger, while solving important problems, is a key part of your job.

3.      Analytical Thinking

An analytical and logical mind is required to carefully understand various medical diagnoses and then convert them into suitable medical codes. This is why logic, as well as the ability to thoroughly and comprehensively analyze information, is also an important trait for medical coders and billers. As patient information and other reports are not always straightforward, you have to study them critically before you can ascertain the appropriate code. And this is essential as you don’t want to overbill the patients or delay your employer’s reimbursement.

4.      Ability to Adapt to Modern and New Technologies

Medical coders operate across multiple platforms and technologies. And organizational needs are usually different. As a result, individual software programs tend to vary considerably. Also, note that the use of HER (Electronic Health Records) software for patient record storage and billing and insurance claims are now a given with a majority of healthcare providers in the US.

So, successful coders and billers should have proficiency in various technologies, like:

  • Healthcare systems for coding and billing
  • Document management software
  • ICD-10
  • Microsoft Office


Medical billing and medical coding are integral processes in the healthcare revenue cycle. So, ensuring that the medical coding and billing cycle run smoothly makes sure that health providers are paid for services delivered.

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