The health care industry has developed specific language, terminology and definitions that relate to services provided by health care professionals and billed to third-party payers for funding. It is important to understand and use these terms. This chapter provides procedure codes and diagnostic codes that providers will need to use in order to access third-party reimbursement. Correct and maximum benefit payments are dependent on the accurate coding as to diagnoses and procedure numbers.

Diagnosis and Procedure Coding

Procedural coding systems were developed to standardize the communication of data regarding the treatment of patients by health care providers to third-party payers. Diagnostic coding was developed for medical records and statistical purposes and is used to track diseases; measure incidences of injury, mortality and illness; classify medical procedures; assist in medical research; and evaluate appropriateness of patient care.

Third-party payers use coding systems for statistical purposes and for benefit determination. Most third-party payers use computer programs to determine whether the procedures submitted are medically necessary for the treatment of the reported diagnosis and whether the services are a fundable benefit of the insurance contract or government program, as well as the total amount of benefits payable for individual services.

Procedure and diagnosis coding is a precise process which requires an understanding of medical terminology and clinical procedures. The provider should assign third-party activities to employees or contractees who have knowledge of medical terminology. It is the responsibility of the practitioner to assign diagnosis and procedure codes for services, while the claims specialist reports procedure and diagnosis information to the third-party payer.

The provider should establish a system to generate and transmit this medical-related information in the most efficient method possible. The goal should be to maximize third-party funding; however, the process should not interfere with the actual provision of services to the child.