Coding is discussed in Chapter 5 as an element of postdischarge processing. This chapter focuses on several of the most commonly used coding systems and on how and when codes are used for health care reimbursement.

Although the coding function is most often associated with payment and reimbursement, coded data are used for other, equally important purposes. For example, coding professionals are key players in ensuring providers’ compliance with official coding guidelines and government regulations. The statistical data collected from complete and accurate coding are necessary to provide a facility or health care provider with the following:

On the patient level, the codes assigned to diagnoses and procedures for an individual patient’s encounter or hospital stay may follow that patient throughout the health care delivery system and have an impact on future treatments and insurability. In the quest for fast billing turnaround time and payment, it is sometimes easy to forget that the patient record is a highly personal document, one that often describes a person’s last days, and therefore must be treated respectfully with regard to the coded data assigned. The American Health Information Management Association (AHIMA) has issued “Standards of Ethical Coding,” guidelines that all coders, regardless of setting, should be aware of and follow (Figure 6-1).

Coding is essentially the translation of documented descriptions of diagnoses (e.g., diseases, injuries, circumstances, and reasons for encounters) into a numerical or alphanumerical code. Thus the diagnosis hypertension is translated to the code I10. The same can be said of translating documented descriptions of procedures, services, or treatments. Coding standardizes the communication of clinical data between users and facilitates electronic transmission of clinical data.

Of interest to coders today are the standards for code sets under the Health Insurance Portability and Accountability Act (HIPAA) of 1996, which names standards for exchanging information through the use of codes. Under HIPAA, transaction code sets are sets of codes used to communicate the diagnosis and procedure codes, data elements, and medical concepts used in electronic health care transactions transferred through an electronic data interchange (EDI). The code sets used in the EDI were mandatory for use in reporting and reimbursement using electronic transaction format version 5010, effective January 1, 2012. The electronic version of a Uniform Bill (UB-04), for example, is the 837I, which is sent in 5010 format. Transaction code sets prior to October 1, 2014, are as follows:

Effective October 1, 2014, ICD-10-CM and ICD-10-PCS replace ICD-9-CM Volumes I, II and III.

Coded data are also retained in electronic format within a facility, such as a hospital, or for a provider, such as a physician office. This coded data can also be shared within a network. Imagine attempting to share information about hundreds or thousands of patients without translating the written descriptions of diagnoses and procedures into codes, and one begins to appreciate the complexity of coded data and the importance of those who perform the coding function.

Many coding systems are in use today throughout the United States and the world. The United Kingdom, for example, uses the Office of Population Censuses and Surveys (OPCS-4) Classification of Interventions and Procedures, a coding system comparable to the ICD-10; Canada developed an adaptation to the ICD-10, ICD-10-CA. The word international can be found in the titles of many of these different coding systems. For example, the International Medical Terminology, for the reporting of regulatory activities, was developed under the auspices of the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) (National Center for Biomedical Ontology, 2012). Some systems are sponsored and maintained by governmental agencies and others by various medical or health associations in the United States and internationally. In the United States, the coding system used depends on the applicable HIPAA transaction code set used in the provider setting. For example, inpatient hospital-based coders use transaction code sets ICD-10-CM and ICD-10-PCS effective October 1, 2014.

This chapter focuses on HIPAA transaction code sets, including ICD-10-CM and ICD-10-PCS, and HCPCS/CPT-4. Other important coding systems, including SNOMED-CT, are also discussed.