Basic Rules and Guidelines for Medical Coding

Medical coding facilitates the billing process by bringing uniformity to the procedures through recognizable codes. Using standard diagnosis codes and procedure codes that are recognized by insurance companies, all medical practices, and relevant care related agencies, the medical coder will ensure that the insurance companies, commercial payer, or the Centers for Medicare and Medicaid (CMS) will recognize the billed item and how the diagnosis warrants that procedure, test, or treatment.

While there are many different techniques for coding based on the specialty of medical practice, there are some basic rules for coding that will always exist.


Only Code What Is Documented

Doctor and patient

 Thomas Barwick/Getty Images

The physician's job is to document the medical record with accurate descriptions of all services, tests, and procedures exactly as performed and adequately detailed with the patient's symptoms, complaints, conditions, illnesses, and injuries. As a medical coder, it is important that the codes recorded on the medical claim are consistent with the documentation within the medical record.


Report Codes in the Correct Order

Woman working on personal finances
Sam Edwards/Caiaimage/Getty Images

Not only is the coding of diagnoses and procedures as accurately as possible important but coding them in the correct order is also important. The very first code is always the specific reason for the patient's visit even when other diagnosis or symptoms exist or even when multiple procedures are performed.


Follow NCCI and MUE Guidelines

woman working at laptop
Klaus Vedfelt / Taxi / Getty Images

Medicare and Medicaid have some minor differences regarding coding regulations than other insurance payers. Coders must report units of service based on the National Correct Coding Initiative (NCCI) and Medically Unlikely Edits (MUEs). This is done to prevent reporting multiple services or procedures that should not be billed together because one service or procedure likely includes the other or because it is medically unlikely to be performed on the same patient on the same day.

National Correct Coding Initiative (NCCI) was developed by the Centers of Medicare and Medicaid Services (CMS) to prevent inappropriate Medicare and Medicaid payments due to coding errors. There are three types of NCCI edits:

  1. Procedure-to-procedure edits: These edits define HCPCS and CPT codes that should not be billed in combination with one another. If these codes are billed together one or both may be denied.
  2. Medically unlikely edits: These edits define HCPCS and CPT codes with a certain number of units that are unlikely to be billed if the claim is correct. In some instances, the units of service will be denied that exceed what is considered to be medically necessary.
  3. Add-on code edits: These edits prevent the payment of add-on codes that are considered as part of the primary CPT and HCPCS codes.

Stay Up-to-Date on Coding Changes

Two women talking

Eric Audras/Getty Images 

An accurate claim is dependent upon multiple components. Staying up-to-date on annual coding changes, following standard coding guidelines and keeping detailed patient records are simple ways to make sure medical claims are accurate.

Coding claims accurately lets the insurance payer know the symptoms, illness, or injury of the patient and the method of treatment performed by the physician.

Coding mistakes occur when the claim is submitted to the insurance company with the wrong diagnosis or procedure code on the claim. Inaccurate coding can lead to many negative outcomes. It is imperative that the medical office develops a compliance system that can prevent the violation of medical coding requirements.


Use Appropriate Modifiers

Nurse putting id bracelet on patient

 JGI/Tom Grill/Getty Images

Some CPT and HCPCS codes required the use of modifiers. They consist of two digit number, two letters or alphanumeric characters. CPT and HCPCS code modifiers provide additional information about the service or procedure performed.

Modifiers are sometimes used to identify the area of the body where a procedure was performed, multiple procedures in the same session, or indicate a procedure was started but discontinued. Modifiers do not change the definition of the procedure codes they are added to.

Key Modifier Facts:

  • Not all modifiers can be used with all CPT and HCPCS codes
  • Refer to the National Correct Coding Initiative (NCCI) for accurate Medicare and Medicaid coding
  • Become familiar with modifiers that are overused or used incorrectly
  •  Inappropriate coding of procedure code modifiers can cause a delay or reduction in payment
Was this page helpful?