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What is medical billing and coding? 

This article was updated on December 1, 2023.

Michael Feder

Written by Michael Feder

Mark Johannsson, Dean of the College of Health Professions

Reviewed by Mark Jóhannsson, DHSc, MPH, Dean, College of Health Professions

Nurses and nursing items cartoonish graphic

In this article

  • What is medical billing and coding?
  • How to become a medical biller or a medical coder
  • Learn more about professional development courses

If you’ve ever visited a physician, chances are you’ve seen a bill with some mysterious numbers listed (besides the amount owed). Known as medical codes, these numbers play an important role outside of the doctor’s office. And understanding what they are and how they work is the first step toward a career path in medical billing and coding.

What is medical billing and coding? 

The phrase "medical billing and coding" refers to a system in which medical office personnel enter information into patient records to ensure proper billing.

"Medical billing and coding is a way to consistently treat, document and submit for payment a range of different medical issues or conditions," says Heather Steiness, the Associate Dean of the College of Health Professions at the University of Phoenix. "Accuracy is vital to ensure that the patient is treated and billed properly."

Correct medical billing and coding is essential to:

  • Prevent overbilling
  • Prevent underbilling
  • Ensure that patients receive appropriate care

Medical billing and coding is a field that requires skill and accuracy as patient records are both sensitive and vital for treatment and billing.

To successfully pursue a career in medical billing and coding, you’ll need to understand medical billing and coding procedures and rules, relevant federal laws and regulations (such as HIPAA) and, of course, those unique codes. Below, we’ll explore:

  • The essential billing and coding terms
  • Billing processes
  • Jobs in medical coding and billing and their salaries
  • How you can learn a range of medical codes
  • How you might become a medical coder

What are medical codes?

Healthcare providers use specific codes and terminology that may be unfamiliar to most patients. Codes are kind of like abbreviations — they serve as easier-to-remember terms. For example, everyone has heard the abbreviation "GPS," but not everyone knows it stands for "Global Positioning System."

Medical codes are kind of like that, and they typically fall into one of two categories:

  • Diagnosis
  • Treatment

Diagnostic codes are related to specific issues or symptoms the patient reports to medical personnel at intake and/or during an examination. These intake points can be with doctors, nurses or admitting or clinical staff.

Diagnostic codes include a range of possibilities, from the common cold to rare, complex cancers.

After diagnosis, medical providers will often begin treatment. "Medical diagnosis is focused on the issue the patient has," explains Steiness. "Treatment codes are focused on the treatment(s) that the providers used to assist the patient. One diagnosis may lead to multiple treatments."

As that treatment evolves, the diagnostic codes in the accompanying patient file will be updated or changed depending on the health issue, corresponding treatment or even discharge.

Codes are not only for the internal medical staff to read and follow but also for the healthcare industry at large. Medical coding is a vital language used to communicate between healthcare providers (or medical offices) and a patient’s insurance company.

These codes speed things up for everyone who is reviewing paperwork and authorizing procedures or payments. Medical codes also help reduce mistakes in payment processing, billing and even diagnosis and treatment.

Common medical billing and coding terminology

Coders who work in the medical billing and coding field often come across various code types, each with its own unique abbreviation.

Here’s an explanation of what each type of coding term stands for:

  • “CPT codes” stand for “Current Procedural Terminology.” What that means is procedural codes related to medical claims are usually generated to bill insurance companies. For example, the doctor performed a routine physical and uses the code to get reimbursed by an insurer.
  • “ICD-10” stands for “International Classification of Diseases.” This code refers to diagnoses used in all healthcare settings. For example, a person diagnosed with a wrist fracture might be coded as an “S62.” The “S” refers to an injury caused by something external to the patient, while the “62” refers to a fracture of the wrist bone.
  • “Bundling” stands for two or more diagnoses. This code helps healthcare providers who are caring for a patient with two diagnoses or other health-related issues at the same time, such as an injury to two areas of the body or an illness that has spread. For example, if a patient receiving a bone X-ray is then treated for a broken bone, the X-ray and treatment services would likely be bundled under one code to streamline everything.
  • “COB” stands for “Coordination of benefits.” This refers to when two insurance companies work together to pay claims for a patient. This applies to patients with multiple health plans or patients with Medicare and a private health plan. For example, you and your spouse have separate healthcare coverage through your respective employers and have a baby on the way. There may be a need to coordinate coverage for that.

For more on ICD-10s, which can be extensive and complicated, and to see more examples of their use, click here.

Bundling helps healthcare providers who are caring for a patient with multiple diagnoses or other health-related issues at the same time. This might be an injury to two areas of the body or an illness that has spread and is affecting multiple organs. It keeps everything simple, contained and related, and reduces the number of codes other personnel must notice and pay attention to. (And that, of course, potentially reduces the likelihood of medical errors.)

As for COBs, they can also be complex. COBs are there to help you "determine which insurance plan has the primary payment responsibility and the extent to which the other plans will contribute," according to the Centers for Medicare & Medicaid Services.

Insure.com explains COBs using this example: "Let’s say you visit your doctor and the bill comes to $100. The primary plan picks up its coverage amount … [of] $50. [Plan No. 2 pays 100%] if the services are covered by that insurer. You pay whatever the two plans didn’t cover." The two insurers would then have to work together to make sure they pay what they’re required to pay under the patient’s plans.

What exactly does a medical coder or medical biller do?

As a medical biller or coder, you will typically have the crucial responsibility of going through a patient’s medical file after an appointment and determining, based on the services provided to the patient (consultation, tests, treatments, etc.), which of those services to bill an insurance company and/or the patient and which universally accepted "codes" to use to notify those companies to explain what work was done and needs to be paid for.

Without a good medical coder, a hospital, doctor’s office or other medical institution may end up overbilling an insurance company or underbilling and not getting the medical provider properly reimbursed and thus lose money.

While medical coders may fall under a company’s "billing" department, they are not necessarily medical billers. That job is for the person who "processes the insurance claims and follows up on them," says FlexJobs. “They do not determine what codes are used in the insurance billing."

Nonetheless, a medical coder may also take on the responsibilities of a medical biller if that person is trained in both roles.

What careers or job titles are available for medical coders?

A medical coder might have any of the following job titles:

  • Medical Billing Specialist
  • Medical Billing Coder
  • Coder, Billing Department
  • Medical Records Clerk/Technician
  • Health Information Technician
  • Coding Specialist

A medical coder has pretty much the same work responsibilities "no matter where they work,” notes FlexJobs. "However, a medical coder can pursue certification in specific concentrations if they choose. While there are several medical coder certification organizations, there are some ‘standard’ certifications." Keep reading to learn more!

Medical billing and coding as a career

Medical billing and coding can be a rewarding field for people interested in healthcare. These two roles not only support healthcare providers, they also directly affect patient care and privacy.

As of May 2023, medical record specialists earned between $35,080 and $77,810, with a median wage of $48,780, according to the U.S. Bureau of Labor Statistics (BLS). BLS also shares job growth for this field is projected to grow 8% from 2022 to 2032, which is roughly 15,000 openings each year.

Salary ranges are not specific to students or graduates of University of Phoenix. Actual outcomes vary based on multiple factors, including prior work experience, geographic location and other factors specific to the individual. University of Phoenix does not guarantee employment, salary level or career advancement. BLS data is geographically based. Information for a specific state/city can be researched on the BLS website.

BLS Occupational Employment Projections, 2022-2032 is published by the U.S. Bureau of Labor Statistics. This data reflects BLS’ projections of national (not local) conditions. These data points are not specific to University of Phoenix students or graduates.

What are the differences between a medical biller and a medical coder?

Like any good team, the terms "medical billing and coding" are rarely seen apart. But the fact is these two fields are not the same thing.

Medical coding is the first step. During this process, a skilled medical coder will take a diagnosis, treatment or prescription and turn it into the right numeric or alphanumeric code. Each code is subject to its own set of guidelines; even the order in which codes appear can impact treatment and billing.

Medical billing, meanwhile, picks up where coding leaves off. Medical billers create a claim based on the medical codes and then assess what is due from the patient after insurance pays its portion. In essence, they act as the point of contact for the insurance company, the patient and, in some cases, the collections agencies.

Who is hiring for medical billing and coding?

Those working in medical billing and coding can sometimes be referred to as simply "medical coders". There are many coding specializations, however, including certified professional coders and coding for outpatient care, inpatient care and risk adjustment.

There are several different career paths for those interested in medical billing and coding. Specialists can work for hospitals and clinical practices, health insurance companies and government agencies.

According to the U.S. Bureau of Labor Statistics, medical records and health information specialists earned a median salary of $44,090 in 2020. (Salary information is not particular to University of Phoenix students or graduates and depends on experience, geographical location and a variety of other factors.)

How to become a medical biller or a medical coder

According to the BLS, becoming a medical biller or coder requires a high school diploma and often certification. Some employers may require additional education, such as an associate degree, as well.

Typically, this process can take anywhere from a few months to (depending on how much time you take between courses), up to a year-and-a-half. As ZipRecruiter notes, this time period often depends on whether a person has decided to pursue certification versus a broader, more general bachelor’s or associate degree in the medical field.

The good news? Many certification courses are available online with flexible formats!

How to get certified for medical coding and billing

A big reason to get certified as a medical biller or coder is because you bring a proven skill set to potential employers.

Several types of medical coding certifications are available and obtainable with a few months of study (see below.) Indeed.com suggests that people interested in breaking into the medical coding field consider taking a certification exam after completing a specialized course in medical billing and coding and/or on-the-job experience.

"You may seek your particular certification through the AAPC, AHIMA or other professional organizations," Indeed.com points out. And, of course, you can also pursue a specialization like those noted earlier in outpatient coding, risk adjustment coding and inpatient coding.

Certifications are facilitated by professional organizations and include:

If you do pursue certification, make sure you review the requirements closely, as some require associate degrees, experience in medical billing or coding and/or a certificate (not a certification) of course completion from an accredited university.

Professional development courses

One way to learn the foundations of becoming a medical biller or medical coder is to take a self-directed online course in the fundamentals, such as the professional development, non-credit one offered by University of Phoenix. (This is a professional development course separate from any program described above.) Professional Development courses are not part of any accredited program or course at UOPX.

The course, Steiness explains, "is meant for people to learn the basics related to medical coding. You will have access to the content for one year and will be able to study at your own pace. In total, it should take roughly 30 hours to complete."

By offering access for a full year, University of Phoenix enables participants to return to the curriculum if they need to review or refresh their knowledge on a particular subject.

Upon finishing the course with a score of 85% or higher,  you will receive a certificate of completion that is not a formal credential but can be added to your digital resumé (like on a LinkedIn profile) so prospective employers can easily see it.

In the University of Phoenix’s professional-development Medical Billing & Coding Fundamentals course, participants learn about how the industry:

  1. Uses real-world medical and healthcare revenue terms
  2. Accurately identifies reimbursable services and treatments
  3. Assigns diagnosis and procedure codes based on clinical documentation
  4. Identifies payer policies and the party responsible for payment
  5. Prepares medical claim forms and processes electronic transactions
  6. Appeals medical claim denials

As in any other type of self-managed, online course, your work, participation and achievements are tracked throughout the Medical Billing & Coding Fundamentals course, so you’ll know when you're hitting the mark – and when you're not. Your progress will be determined by your ability to demonstrate a skill and apply it immediately; with successful assessment answers you then can move to the next learning module.

Still not sure whether the professional-development Medical Billing & Coding Fundamentals course is right for you? Then ask yourself if you fit into one of the following:

 

You’re a… You’re looking to… …or you’re looking to…
professional …ensure the medical billing and coding processes within your practice are operating to full potential. …better understand the revenue stream for your practice or healthcare setting.
(new) learner …learn how coding is used in the industry, such as to bill insurance companies.

…learn how payers are billed and providers are paid.

 

If so, this professional development fundamentals course may be right for you. For a course outline, as well as an overview on the fundamentals, you can click here. For more information regarding University of Phoenix Professional Development courses click here.Additional courses at University of PhoenixYou may also be interested in  the following University of Phoenix single courses and programs:

  • Medical Records Certificate: A 10-month program that prepares you to sit for the Certified Billing and Coding Specialist (CBCS) exam, a national certification offered through the National Healthcareer Association.
  • HCIS/140 Fundamentals of Electronic Health Records: A college-credit course for undergraduate students that covers the fundamentals of electronic health records, not just medical billing and coding.
Headshot of Michael Feder

ABOUT THE AUTHOR

A graduate of Johns Hopkins University and its Writing Seminars program and winner of the Stephen A. Dixon Literary Prize, Michael Feder brings an eye for detail and a passion for research to every article he writes. His academic and professional background includes experience in marketing, content development, script writing and SEO. Today, he works as a multimedia specialist at University of Phoenix where he covers a variety of topics ranging from healthcare to IT.

Headshot of Mark Johannsson

ABOUT THE REVIEWER

Mark Jóhannsson is the Dean of the  College of Health Professions. He has a career spanning over 35 years of healthcare management, public health practice, higher education administration, teaching and clinical/behavioral research within corporate, community and academic settings. He has served as both an educational and keynote speaker, and he has been published in a variety of peer-reviewed and periodic literature.

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This article has been vetted by University of Phoenix's editorial advisory committee. 
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