Medical coding is essentially the process of assigning formal, standardized medical codes to patient medical records. When a patient goes into a clinic or hospital a medical record is created. This medical record will include patient identifying and demographic information. It will also include a description of the chief complaint, any procedures that were performed, medications prescribed, a diagnosis, and follow-up instructions. The diagnostic and procedural information contained in the patient medical record must be converted into simplified numerical codes by trained medical coders. These numerical codes allow complex medical procedures and diagnoses to be recognized quickly and easily by health care computer systems where they can be electronically processed for payment by third party payers, Insurance companies and Medicare.

Medical coders review patient medical records to identify reimbursable or billable events and activities. Once a reimbursable event has been identified the proper numerical code is input into a healthcare reimbursement system. Proper coding will ultimately determine the amount the healthcare provider will be reimbursed by Insurance companies or by Medicare or Medicaid. It is of paramount importance that the medical coder accurately codes each patient chart. Errors and omissions can be costly and burdensome to the healthcare system.

At this point, most medical coding work is still performed by medical coders working in hospitals or clinics. Medical coders work in a professional environment and perform a vital behind the scenes billing support activity.

There is a trend toward outsourcing of medical coding work to third party vendors. As this trend catches on, more medical coding work will be done in homes and medical coding will evolve to become more of a home based career—much like medical transcription is today. It is believed that as technology continues to evolve and remote medical coding platforms are developed, the outsourcing model will begin to take hold in the industry. However, at this point it is important to point out that most medical coding is still performed in hospitals and clinics.

Medical coding is one of the fastest growing professions in the country. Demand for medical coders is extremely high. And the demand for those trained to do physician billing will continue to accelerate as demographic trends play out over the next several decades. However, if you think billing for physicians, hospitals and other healthcare providers would be a breeze, you must realize that this is a profession that demands competence and exactness.

It is rather exciting, though, to realize that this type of job is plentiful and salaries start at $30,000 a year. But remember, education and certification are essential for anyone considering a career in this particular healthcare industry.

Read this article to learn more about the field and compare inpatient vs outpatient coding.