Business News Daily receives compensation from some of the companies listed on this page. Advertising Disclosure


What Is Medical Billing and Coding?

Max Freedman
Max Freedman

Medical billing and coding is how patient charts and clinical data become medical claims. Learn about the position and how medical billing software improves it.

  • Medical billing and coding is the process of converting patient charts and clinical data to medical claims, which are then submitted to payers for reimbursement.
  • Medical billers and coders convert patient treatment and diagnosis information into numerical codes that payers use to make reimbursement decisions.
  • Medical billing software helps streamline processes for newcomers, longtime billers, and coders.
  • This article is for entrepreneurs starting a medical billing and coding career, and current billers and coders looking to improve their procedures.

The U.S. Bureau of Labor Statistics has predicted that the medical billing and coding field will grow by 22% through 2026. This fact alone makes investing in a more robust medical billing and coding setup a smart plan. It also suggests that there's never been a better time for you to enter the field.

Editor's note: Looking for the right medical billing service for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

What is medical billing and coding?

As a medical biller and coder, you would convert patients' encounters into numbers and formats that payers – including insurance companies and government agencies – can use to reimburse the providers you represent. It requires the transcription of the diagnoses, exams, procedures, and treatments in patients' charts into two types of codes. The first code is International Classification of Diseases, 10th Revision (ICD-10), which describes diagnoses. The second is Current Procedural Terminology (CPT), which depicts services.

What do medical billers and medical coders do?

Medical billers and coders oversee the process of converting clinical data from patients' charts into standardized codes that government and private payers can differentiate. Medical billers and coders also record a patient's insurance information alongside codes for proper claim filing and reimbursement.

After creating and filing accurate claims, medical billers and coders work with payers to ensure that their practice receives timely, full reimbursement. Billers and coders also oversee the resubmission process if claims are rejected and the appeals process if claims are denied. However, it's becoming less common for medical billers and coders to manually check errors for claims, as automated claim scrubbers complete this task faster.

Key TakeawayFYI: Automated claim scrubbers now handle most medical biller and coder accuracy-checking work.

Depending on the practice, a medical biller or coder may be more familiar with either the UB-04 or HCFA-1500 billing forms. Read the Business News Daily guide to HCFA forms to learn the difference between these forms, and what information most claims include.

Medical billing and coding training, and skill requirements

Medical billers and coders must have a relevant degree or certification to work with healthcare information systems. Other credentials are highly recommended. Additionally, there are several skill sets that predispose a person to being a sufficient medical biller and coder. These three considerations are outlined below.

1. Medical billing and coding educational requirements

To work in medical billing or coding, you need one of the following degrees or certifications. A trustworthy program in any of these areas will boast an AHIMA, CAHIIM, or AAPC accreditation.

  • Medical billing and coding certificate: If you are aiming to enter the medical billing and coding field quickly, certificate programs are ideal. Many programs take less than a year, and cover medical terminology, treatments, procedures, biological systems, and the basics of ICD-10 codes. Most certification programs provide hands-on training with leading medical software, and establish billing and compliance basics.

  • Associate's degree: Over the course of two years, associate's programs in health information management will teach you the same curriculum as a certification program. However, practices and medical billing companies may be more inclined to hire you if you have earned a degree over a certificate. Additionally, associate's degrees can count as the completion of several undergraduate credits.

  • Undergraduate degree: Some universities offer traditional four-year bachelor's programs in medical billing and coding, healthcare administration, and health information management. These longer, more in-depth programs will teach you about data analysis, health policy, project management, human resources and compliance.

Key TakeawayKey takeaway: To work in medical billing and coding, you need a certification, associate's degree or bachelor's degree.

2. Medical billing and coding credentials

Upon graduating from any of the above programs, you can – and should – take one of the following AHIMA credentialing exams.

  • Certified Coding Associate (CCA): This certification indicates you are capable of tactfully, diligently managing healthcare information. If you graduate from an AHIMA-accredited program, you can take the certification exam immediately upon graduation. Otherwise, six months of work experience is highly recommended as a replacement to qualify for the exam.

  • Registered Health Information Technician (RHIT): To qualify for this exam, you must graduate from a CAHIIM-accredited health information management associate or undergraduate program. You do not need prior work experience to take the RHIT exam.

After you work as a medical biller or coder for two years (or one year with either of the above credentials), these two AHIMA credentials become available:

  • Certified Coding Specialist (CCS): This credential is highly recommended if you are seeking to work as medical biller and coder in a hospital setting. A CCS credential indicates proficiency in medical terminology, pharmacology, disease processes, and ICD-10 and CPT coding.

  • Certified Coding Specialist – Physician-Based (CCS-P): The CCS-P signifies you are proficient in physician-level billing. It covers all the same areas as a CCS credential plus HCPCS Level II coding. It is considered the highest possible indicator of medical billing and coding excellence.

In all the above cases, you must recertify every other year as a medical biller and coder. To recertify, you need to take 20 Continuing Education Units (CEUs) and complete two annual coding self-reviews, which each count as five CEUs. AHIMA explains additional recertification criteria and CEU options in its recertification guide.

3. Medical billing and coding skills

Although medical billing and coding courses are theoretically open to anyone, you may be more likely than others to succeed in the field if you have acquired these skill sets:

  • Attention to detail: Since medical coding systems comprise seemingly infinite strings of five- and six-digit numbers, you will need a keen eye to spot numerical errors. Without adequate attention to detail, you are more likely to encounter claim rejections.

  • Computer proficiency: Most of the medical billing process now takes place digitally instead of in paper form. If you are computer savvy, you may have a natural tendency to complete medical billing and coding tasks efficiently.

  • Organizational skills: Medical billing and coding requires you to complete many forms for a number of patients. Failing to properly organize these forms can lead to operational hiccups that make the billing process painful for both the patients and practice.

  • Ability to maintain data privacy: Under HIPAA laws, you are required to keep healthcare information confidential at all times – except to obtain payer reimbursement. As a medical biller or coder, you will need to respect others' privacy. Consequently, you will not be able to discuss details of a patient's information with team members who aren't working on their case.

  • Data analysis: You should be able to look at groups of codes and quickly assess whether they make sense based on the patient's charts. You should also know how to rectify errors you spot during data analysis.

  • Anatomy and physiology: To know whether groups of codes make sense together, you should be aware of anatomy and physiology basics. No biller or coder is quite an expert in any scientific field, but you should be capable of understanding bodily systems, medical processes, and their interactions.

TipTip: If you are opening a medical practice and want to hire a medical biller or coder, consider candidates who offer the above skills and the right credentials.

How medical billing software helps medical billers and coders

Medical billing software makes a huge difference for medical billers and coders. Even though the certification options qualify billers and coders to get the job done, software expedites the processes.

For example, medical billing software – such as DrChrono – provides a backbone for all of the steps you complete in medical billing and coding. That backbone includes claim creation, filing and scrubbing, an integrated clearinghouse, and denial management tools. Read our review of DrChrono to learn more about how the software expedites the billing process.

If you work for a practice, you can also benefit from medical software such as athenahealth, which facilitates all of a biller's claim-related tasks. Read our review of athenahealth to learn more about the company's consultative approach to billing.

Visit our medical billing service best picks page to find a variety of software platforms that improve the medical billing and coding process – from start to finish.

Image Credit: AndreyPopov / Getty Images
Max Freedman
Max Freedman
Business News Daily Contributing Writer
Max Freedman is a content writer who has written hundreds of articles about small business strategy and operations, with a focus on finance and HR topics. He's also published articles on payroll, small business funding, and content marketing. In addition to covering these business fundamentals, Max also writes about improving company culture, optimizing business social media pages, and choosing appropriate organizational structures for small businesses.