Academic Master

Health Care

Fundamentals Of Reimbursement In Healthcare

Part 1: Medical Necessity And Criteria

In this contemporary world, information technology has been implemented in every mode of our life. It displays and acts as an important part of the security and growth of any organization. In a medical context, it is very critical to own a relative amount of digital services to make a smooth workflow (Coppler et al., 2016). However, the cost and billing of hospital amenities and their response are always increasing, and a lot of vital digital improvement steps have been taken to enhance the daily process of these amenities. These restructurings have largely included the coding system in the health facilities. Coding systems are used when payment is to be made to the patients for the services they have taken from the hospital.

Previous researchers have shown that preventive use of technological resources will make the reimbursement more detailed and also improve medical records (Coppler et al., 2016). It will also develop a better understanding of how physicians can cater to patients’ needs. The need of this study is to create a coding system that can manage the diagnosis of the patients and create appropriate billing for the services. Such coding systems are now important for any medical care center because diagnosis does not clearly identify the payments and the cause of the disease. So, to keep a perfect medical record, health firms are now acquiring coding systems instead of diagnosis only. To create proper methods, certain new codes should be acquired by health centers to better understand their processes.

Part 2: Implementation Of Coding And Billing

Two different types of medical coding techniques are the Current Procedural Terminology (CPT) and the International Classification of Diseases (ICT). ICD is the standardized global system to classify severe diseases and death-causing diseases. Healthcare organizations use these systems to identify a certain disease and get resources to provide immediate care (Saini et al., 2016). WHO says that 70% of healthcare expenses are identified by using IC, D. The latest version of ICD is the ICD-10 which includes more than 68,000 codes for the treatment of all types of diseases in the medical care complex.

ICD-10 coding system merges health issues that a patient is suffering by generating three to seven-digit alphanumeric codes (Weiner, 2018). These codes tell about the symptoms, diseases, injuries, and signs of the patient and give a record to the payer of the records. These codes are then connected with CPT, which records services given to a patient, and then the report is given to the patient for billing.

CPT is a five-digit alphanumeric code sequence, or mostly a four-digit code and a note, which is generated according to the service type. CPT helps in analyzing services given to patients, such as surgical, medical, or diagnostic services (Weiner, 2018). CPT and ICD reports are attached and given to the payer (insurance or patient) for the amount to be filled for the services rendered. For instance, the medical care unit of Utah receives a patient who has certain health issues at their facility. Facility staff diagnosis on the ICD-10 software, about what problem the patient is facing and turn out to be jaundiced. Then, after the patient has received the services from the facility, the billing system has a CPT services report and ICD diagnosis report attached to the bill itself.

Coding is becoming more important because it makes it easy for a health facility to receive payments with full details provided. However, if the billing method is not done like these coding techniques, every health facility will lack the generation of their revenue. Unlike simple diagnosis, encoding methods make it easier for patients to understand their problems and rectify them (Saini et al., 2016). Coding and billing are both satisfied by using these methods.


Coppler, P. J., Rittenberger, J. C., Wallace, D. J., Callaway, C. W., & Elmer, J. (2016). Billing diagnoses do not accurately identify out-of-hospital cardiac arrest patients: An analysis of a regional healthcare system. Resuscitation98, 9-14.

Saini, S. D., Powell, A. A., Dominitz, J. A., Fisher, D. A., Francis, J., Kinsinger, L., … & Kerr, E. A. (2016). Developing and testing an electronic measure of screening colonoscopy overuse in a large integrated healthcare system. Journal of General Internal Medicine31(1), 53-60.

Weiner, M. G. (2018). Point: Is ICD-10 diagnosis coding important in the era of big data? Yes.



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