The different types of medical coding bring along a transformation of healthcare diagnosis, procedures, medical billing services, and equipment. The diagnoses and procedural codes are taken from the medical records and documentation. These include the transcriptions of physicians’ notes, laboratory and radiologic lab results, etc.

Medical coding takes place each time a patient sees a healthcare provider. To further explain – the providers review medical history and complaints and then make an expert assessment of what might be wrong and what can be different ways to treat the patient. Furthermore, providers also document patient visits – that too with appropriate codes. Consequently, this documentation is not only a patient’s ongoing record but also how healthcare providers get paid.

Medical Coding Classification

The medical coding classification and coding professionals help ensure all applied codes are used correctly in the medical billing process. The process includes abstracting information from documentation, assigning suitable codes, and then creating claims for payment from insurance providers.

Purpose and Need for Different Types of Medical Coding

Medical coders convert medical documentation into standardized medical codes – which tell insurance providers the following attributes of patients and their treatment:

  1. Patient diagnosis
  2. Assessment of the medical requirement for treatments, services, or supplies
  3. Documentation of provided treatments, services, and supplies to the patient
  4. Recognition of any uncommon situations or medical conditions that can influence treatments and services

Much like a musician interpreting written music to create the desired melody, expert medical coding demands an understanding of anatomy, physiology, healthcare intricacies, and regulations set forth by payers. These coding systems in healthcare serve as a link between medical documentation and insurance providers, ensuring a consistent communication process. By converting complex medical information into coded language, medical coding systems enhance transparency and facilitate a smoother exchange of information among healthcare professionals and insurance companies.

Types of Medical Coding

If you are wondering just how many types of medical coding are there – here is your answer. Ideally, there are four types of medical codes, including:

  1. Diagnostic codes (Diagnosis-Related Group Coding)
  2. CPT codes (Current Procedural Terminology Coding)
  3. ICD codes (International Classification of Diseases Coding)
  4. HCPCS codes (Healthcare Common Procedure Coding System)

Coding classifications use different medical coding systems to represent various aspects of medical care.  

Let’s discuss a few of these types of medical codes!

  1. Diagnostic Codes

Diagnostic coding serves as an essential aspect of medical coding, involving the assignment of codes to:

  • Diagnoses
  • Signs
  • Symptoms
  • Clinical findings

Specifically, the Diagnosis-Related Group (DRG) modifier codes are used here, providing a means to describe the purpose of a patient’s visit, their underlying condition, and the treatment outcome.

Furthermore, the diagnostic codes play a multi-layered role, extending beyond individual patient cases. They are instrumental in epidemiology, facilitating the tracking of disease prevalence and incidence, identifying emerging health patterns, and monitoring public health concerns.

Now, let’s explore where one of the most widespread systems of diagnostic codes, the International Classification of Diseases (ICD), comes into play.

Upheld by the World Health Organization (WHO), the ICD is a globally recognized diagnostic coding framework. Updated periodically to incorporate the latest developments in medicine and health, the current iteration is ICD-10, encompassing over 70,000 codes.

  1. Procedural Coding

Next on the essential and most widespread types of medical coding Procedural coding procedural coding. It involves assigning codes to medical procedures, services, and interventions. These codes document the actions taken during a patient’s visit, including tests, surgeries, therapies, or consultations. Beyond clinical documentation, procedural codes play a role in medical billing, determining the reimbursement a provider receives for specific services –necessitating Certified Professional Coders (CPC).

Now, what exactly does CPC signify in medical coding?

CPC stands for Certified Professional Coder, representing a gold standard in medical coding, especially in physician office settings. Procedural codes extend their significance beyond billing; they serve as indicators of the quality and efficiency of care, indicating the type and level of services.

The most extensive system for procedural codes is the Current Procedural Terminology (CPT) under the American Medical Association (AMA). With a collection of over 10,000 codes, the CPT spans various categories of medical services, including:

  • Evaluation and management
  • Anesthesia
  • Surgery
  • Radiology
  • Pathology
  • Medicine
  1. Pharmaceutical Coding

Pharmaceutical coding comes from other types of medical coding– dedicated to assigning codes to drugs, medications, and biological products. These identify vital details such as the name, strength, dosage form, administration route, and drug manufacturer.

Beyond mere identification, pharmaceutical codes serve essential purposes in pharmacovigilance. It includes activities like detecting:

  • Adverse drug reactions
  • Monitoring the safety and efficacy of drugs
  • Preventing medication errors

At the forefront of pharmaceutical coding systems is the National Drug Code (NDC), maintained by the Food and Drug Administration (FDA). The NDC, presented in a 10-digit format, comprises three segments:

  1. The labeler code (indicating the manufacturer or distributor)
  2. The product code (specifying the particular drug or product)
  3. The package code (detailing the size and type of packaging)

This standardized coding system ensures clarity and consistency in identifying pharmaceuticals for effective communication across the healthcare landscape.

  1. CPT

Short for Current Procedural Terminology, CPT plays a crucial role in documenting diagnostic, surgical, and medical procedures for relevant parties. Functioning as a procedural coding classification system, CPT identifies the procedures by doctors and other care providers to assist their patients. Its primary aim is to convey these procedures standardized, facilitating administrative and analytical applications for relevant types of medical coding.

Example of CPT Medical Coding

For CPT medical coding, let’s consider a scenario where a patient undergoes an ultrasound-guided cholecystectomy drainage at an outpatient facility. The radiologist administers moderate sedation and carefully monitors the patient’s vital signs throughout the procedure. The steps involve inserting a needle into the gallbladder through the skin, draining the fluid into a collection bag, and then placing a catheter for continuous drainage.

To precisely document this complex procedure, the medical coder assigns the following CPT codes:

  • 47531 – PTBD (Percutaneous Transhepatic Biliary Drainage)


PTC (Percutaneous Transhepatic Cholangiography) 

This code covers image-guided procedures involving the placement of a catheter in the bile duct(s), incorporating diagnostic cholangiography when performed.

  • 99152 – Moderate Sedation Services:

This code relates to the provision of moderate sedation services by a physician or another qualified healthcare professional. Notably, it is distinct from the professional performing the therapeutic or diagnostic service that the sedation supports. The code applies to the initial 15 minutes of sedation.

In this way, CPT medical coding captures the procedure’s details, allowing for standardized communication in healthcare.

What is a Medical Coding Classification System?

It is a set of codes aligning with specific procedures and diagnoses. These systems record information about health conditions in patient records which plays an important role in the medical billing process.

It’s important to note that these classification systems extend beyond hospitals and care facilities. Furthermore, government health programs, such as Medicare, and private insurers rely on them for various purposes. These include:

  • Statistical analysis of diseases and procedures
  • Managing claims and reimbursements
  • Tracking outbreaks
  • Supporting decision-making in healthcare systems

The classification systems serve as a foundation for efficient healthcare management and analysis across various sectors.

Other Types of Medical Coding

In addition to the four primary types of medical coding, there are specific variations for particular purposes or settings. Exploring the different types of medical coding in healthcare reveals various applications:

HCPCS Level II Codes

These alphanumeric codes complement CPT codes, serving specific roles for items and services beyond CPT’s coverage. Examples include:

  • Durable medical equipment (DME)
  • Prosthetics
  • Orthotics
  • Supplies
  • Drugs administered via injection or infusion
  • Ambulance services
  • Certain Medicare services


The CPT modifiers, a.k.a. Level I modifiers, complement or adjust care descriptions, offering additional details about a procedure or service provided by a physician. These modifiers provide more context without changing the definition of the procedure code. HCPCS codes, consisting of two-digit alphanumeric characters, are frequently used as modifiers. These codes supply extra information about the medical procedure, specifying the body part involved, identifying multiple procedures conducted in a single session, or indicating situations where a procedure was initiated but subsequently discontinued.


Alphanumeric SNOMED CT codes have a role in clinical terminology – within electronic health records (EHRs). Notable by their comprehensive and granular nature, these codes surpass ICD codes. They encompass various concepts, including:

  • Anatomy
  • Diseases
  • Procedures
  • Findings
  • Substances
  • Organisms


Alphanumeric LOINC codes have applications in EHRs, specifically for recording laboratory tests and clinical observations. These codes encompass diverse attributes such as analyte, method, specimen, scale, and units.


ICD-10-CM, the clinical modification of the previous ICD-10 version, is custom-made for clinical settings within the United States. It includes modifiers to achieve a level of detail necessary for reporting needs. The granularity of ICD-10-CM exceeds standard ICD-10 codes, offering detailed medical codes particularly beneficial for clinical and outpatient applications. They provide clarity on the severity of a disease or condition.

ICD-10-PCS Codes

ICD-10-PCS codes are for inpatient hospital procedures in the United States. These codes come with more details than the CPT codes and cover various aspects of a procedure, such as:

  1. Body system
  2. Body part
  3. Root operation
  4. Approach
  5. Device
  6. Qualifier


It is the latest revision of the ICD. It serves as the new global standard for diagnostic codes, replacing ICD-10. Implemented in January 2022, ICD-11 classifies everything from diseases to symptoms. It introduces recodifications for some diseases, expands definitions for sexual health, and includes new entries for the immune system and sleep-wake disorders, among other diagnoses.

Example of ICD Medical Coding

A typical scenario is when a patient presents to a primary care physician, expressing symptoms of fever, cough, sore throat, and headache. After a thorough physical examination, the physician opts for a rapid antigen test to determine the presence of influenza A/B. The results confirm influenza A. Subsequently, the physician diagnoses the patient with influenza from the identified influenza virus (J10.1) and prescribes an antiviral medication.

To accurately document this diagnosis, the medical coder assigns the ICD-10 code:

  • J10.1 – Influenza owing to the identified influenza virus along with other respiratory manifestations

This ICD code captures the specifics of the patient’s condition, ensuring a standard approach to medical coding for effective communication and record-keeping.

Benefits of Medical Coding

Medical coding offers numerous advantages for both healthcare providers and patients. Let’s explore some key benefits:

  1. Accurate and timely reimbursements

Medical coding ensures healthcare providers receive accurate and prompt service reimbursements. Medical coding contributes to the financial well-being of healthcare organizations by minimizing billing errors, denials, and audits.

  1. Compliance and quality

Different types of medical coding aid healthcare providers in following the diverse rules and regulations of government agencies, insurance companies, and accreditation bodies. Beyond compliance, it enables providers to measure and enhance their service quality and performance. By offering data and feedback on outcomes and processes, medical coding becomes a valuable tool for maintaining higher standards of care.

  1. Communication and coordination

Facilitating communication and coordination among different healthcare professionals and settings is another vital role of medical coding. Establishing a common language and standard for documenting and exchanging medical information ensures everyone involved is on the same page, promoting efficient collaboration.

  1. Research and innovation

Medical coding becomes a base for research and innovation by providing valuable data and insights into various aspects of healthcare. These include epidemiology, public health, clinical trials, health economics, and health informatics. The information resulting from medical coding contributes to advancing knowledge, improving healthcare practices, and fostering innovation.

Importance of Different Types of Medical Coding

Medical coding holds importance in the healthcare industry, serving several critical functions. It ensures that healthcare providers receive correct reimbursement for their services, simplifies the billing process, and lessens the potential for errors or fraud. The accuracy of medical coding plays an essential role in upholding the integrity of medical records and fostering communication among healthcare providers.

To summarize its importance:

1. Accurate Reimbursement – Medical coding guarantees that healthcare providers are accurately reimbursed for their services, safeguarding financial stability.

2. Streamlined Billing – Standard codes within medical coding contribute to the smooth and efficient billing process, promoting clarity and consistency.

3. Error and Fraud Reduction – Accuracy in coding minimizes the risk of errors and fraudulent activities, ensuring the reliability of healthcare transactions.

4. Integrity of Medical Records – Medical coding helps maintain the integrity of medical records, contributing to a comprehensive and accurate patient history.

5. Facilitation of Communication – By providing a common language and standard, medical coding facilitates effective communication among healthcare providers, ensuring collaboration for optimal patient care.

Applications of Medical Coding

Medical coding serves various essential functions in the healthcare sector, contributing to effective communication and billing. Here are the key uses of medical code sets:

Universal Communication

  • Medical codes are a universal language that facilitates understanding between payers and providers. They promote seamless communication and accurate billing, considering the financial significance of payers and healthcare providers. Compliance and precision in coding are vital for ensuring transparency in the billing process.

Impact of Inaccurate Coding

Inaccuracies in coding can lead to issues, including up-coding and down-coding.

  1. Up-coding occurs when a code is assigned for a higher level of service or procedure than documented in the patient’s chart. Up-coding is a serious offense, highlighting the importance of accurate and compliant coding.
  2. Down-coding happens when the assigned code reflects a lower complexity or cost than documented. Often unintentional, down-coding highlights the need for education among clinicians and medical coders to prevent potential losses for the practice.

Population Health Management

  • Diagnosis codes play a vital role in analyzing disease patterns within population groups. They offer insights into national-level health trends, enabling federal and state governments to plan resources effectively. Additionally, this data supports the development of initiatives to prevent and treat widespread health issues in the affected population.

In essence, medical coding is a language for financial transactions and a tool that contributes to the overall management and improvement of healthcare at individual and population levels.


Various types of medical coding, including diagnostic, procedural, pharmaceutical, and CPT codes, are individually important in healthcare. These codes are a universal language, ensuring accurate reimbursement, streamlined billing, and reduced errors or fraud. Medical coding applications extend to population health management, fostering research, innovation, and efficient communication in the healthcare sector. In essence, medical coding is not only a language for financial transactions but also a tool that contributes to the overall management and improvement of healthcare at individual and population levels.

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