Medical Coding and its Relevance to the Healthcare Industry

Syanthiyana Sadagopal
4 min readFeb 22, 2021


Medical coding refers to the process of translating medical information, diagnosis, procedures, and instruments. In layman's terms, it is the conversion of the medical processes in a more compact format. Medical coding not only helps the management of the data but also the billing system. It translates the procedures into unique codes so that no mistake in the billing process occurs.

Medical coding informs the payers about the diagnostics, medicines, treatments, or unusual treatments. Therefore, the payers can verify before the final payment is made. Another thing the coding informs is about the prevailing medical conditions of the person. Medical coding requires extensive knowledge of anatomy, medical procedures, physiology, and medical conditions. With time medical coding helps to gather a good set of data on a disease which in the future helps in the treatment of any other patient without wastage of time in tests.

Types of medical coding

Medical coding is chiefly used by the bigger chunk of the healthcare business. There are mainly six types of coding methods used extensively. Although there are many other types of coding methods approved by various countries.

International classification of diseases

It is the most popular coding process. It consists of everything that is lethal to the human body. It is a 69000-code set. It consists of diseases, medical conditions, poisons, injuries, and neoplasms. Its codes are also called smart codes with seven alphanumeric characters to record the patient’s information.

Current procedure Terminology

This code consists of 8000 code-set with five alphanumeric codes. It explains the services to be given to the patient in various diseases or medical conditions. Generally, outpatients are reported using the current procedure terminology. It is also used by healthcare professionals to record the procedure they perform on the patient.

Code on dental procedures and nomenclature

As the name suggests this procedure is exclusively used by dentists. It is a five-character code that starts with the letter D. Dental, as well as oral treatments, are recorded and billed using the code on dental procedure and nomenclature.

National Drug codes

It is used to record and track the drugs. It serves as an excellent method to track and regulate the drugs sold and used in the medical processes. It is a 10 to 13 alphanumeric character code used to cipher the vast range of drug names.

Health common procedure coding

This set of codes is used for medical supplements such as ambulance, medical equipment, prosthetics, OPD, supplies, and medical tools. It is updated often on the hospital’s requirement basis.

Ambulatory payment categories

This code is only used to support the outpatient department. Also, other minor issues and operations are billed using this code system. The beginning of the coding usually begins with ICD and CPT. A lot of cases are easily ciphered.

Importance of Medical coding

Knowing the importance of anything gives us a better understanding of it. Let us see how medical coding becomes an essential part of any healthcare sector.

Good services to the patient

Proper coding of patient data helps in identifying the insurance claim made by the patient and timely reimbursement of the revenue. It also helps in instant identifying the common ailments for quick and efficient treatment of the patient. With the coding process, the history of medical conditions can also be quickly retrieved leading to no error in treatment.

Aid to meet the govt requirements

There is a huge requirement from the government to maintain patient data. These data can be effectively managed and easily retrieved when the time comes. Medical coding makes it possible to compactly store the data and thus following the norms set by the government.

Cash flow is maintained

With correct medical coding, billing, as well as pre-authorization, becomes very easy. Right medical billing will ensure that the accounts receivable is minimal. Therefore it helps in keeping the hospital cash inflow and in effortless processing of revenue cycle management.

So we see how essential the medical coding process is in the healthcare sector. It helps to streamline every step of the revenue cycle management. Proper medical coding not only increases the revenue of the organization but also takes care that patient data and privacy is maintained at all costs. The role played by medical billing is thus vital and critical to the industry. Optimum management of the coding process is therefore very helpful and should be constantly in practice. Only then we can ensure the best medical services are received by the patients.

Thank you for reading the article. I hope it was well informed. In case you want any information regarding the medical billing process, kindly contact us. Team SYANTHY will be happy to help you and make your work easier. It will be our immense pleasure if you give your valuable feedback in the comment section. Please share this article with your loved ones and professional circle if you like it



Syanthiyana Sadagopal

CEO of two tech corporations, Inspirational Speaker, helps people in need. Mother, wife, fitness expert, she believes in creating her own destiny.