Impact of Medical Coding on Revenue Cycle

What is the Impact of Medical Coding on the Revenue Cycle?

Medical coding aids in the conversion of medical diagnoses, patient payments, procedures, doctor’s practices, patient registration, and patient medical records into universal codes that may be applied for medical billing and reimbursement. Medical codes precisely and reliably express patient treatment information between healthcare practitioners, insurance providers, and governmental organizations. It facilitates easy access to patient medical records. This article discusses the importance of medical coding and how it impacts the revenue cycle of medical practices.

Importance of Medical Coding in Healthcare

The Affordable Care Act has made medical coding more essential in recent years. Medical coders will become even more vital for the future of healthcare as healthcare reform continues to take hold.

Ensuring patients receive the proper diagnosis is among the most crucial components of medical coding. This can frequently be difficult because numerous health issues have overlapping symptoms.

According to a report, the market for medical coding was estimated to be worth USD 16.23 billion in 2022. From 2023 to 2028, it is expected to rise at a CAGR of 10.91%, reaching USD 30.17 billion. Due to factors including the increasing need for coding services brought on by the rising incidence of chronic diseases and hospitalizations worldwide, the medical coding market is experiencing positive market expansion.

Additionally, the market for medical coding will be stimulated by the growing demand for a universal language to decrease insurance claim fraud and misinterpretations.

Further, the need for medical coding in the market will be driven by the rising need for optimizing hospital billing processes in the healthcare and insurance industries and the rising adoption rate of modern healthcare solutions in ordinary hospital operations and clinics. As a result, it is anticipated that the market for medical coding will expand significantly between 2023 and 2028.

Types of Medical Codes

The two main code sets used in medical coding are the International Classification of Diseases (ICD) and the Current Procedural Terminology (CPT). While CPT codes are used to record medical treatments and services, ICD codes are used to categorize and report medical diagnoses. 

Here are the types of medical codes used in billing management.


ICD-10-CM is the International Classification of Diseases, 10th Revision, Clinical Modification. It’s a system physicians and other healthcare providers use to classify and code all diagnoses, symptoms, and procedures recorded in conjunction with hospital care in the United States.


Current Procedural Terminology is a medical code set that reports medical, surgical, and diagnostic procedures and services to entities such as physicians, health insurance companies, and accreditation organizations.


The International Classification of Diseases, 10th Revision, Procedure Coding System is a medical classification system used for procedural codes. It is used mainly in the United States for inpatient hospital settings.


Healthcare Common Procedure Coding System Level II is primarily used to report products, supplies, and services not included in the CPT codes, such as ambulance services, durable medical equipment, prosthetics, orthotics, and collections.


Code on Dental Procedures and Nomenclature is a code set with descriptive terms developed and updated by the American Dental Association (ADA) for reporting dental services and procedures to dental benefits plans.


National Drug Codes are unique 10-digit, 3-segment numbers assigned to each medication listed under Section 510 of the U.S. Federal Food, Drug, and Cosmetic Act. The segments identify the labeler or vendor, product, and trade package size.


In medical coding, modifiers provide extra information or details about a procedure, service, or supply. They are usually two-character codes added to the end of a CPT or HCPCS code.


Medicare Severity Diagnosis Related Groups is a classification system that groups similar clinical conditions (diagnoses) and the procedures furnished by the hospital during the stay.


Ambulatory Payment Classifications are the United States government’s payment method for facility outpatient services for the Medicare (United States) program. It’s a system that classifies outpatient services and procedures for reimbursement.

How Medical Coding Impacts Revenue Cycle

Medical coding has never significantly impacted revenue cycle performance as it does in the current era of value-based reimbursements. The following stage of the healthcare revenue cycle is influenced by the previous one. This implies that what starts as a minor issue in one setting can develop into an expensive setback in a later stage.

The center of the revenue cycle is where medical coding silently resides. Charges are processed swiftly, and the claim is fairly decided as soon as possible when everything is done precisely and completely.

Impact of Medical Coding on the Revenue Cycle

See how medical coding impacts the revenue cycle.

Claim Submissions Accuracy

For the submission of an accurate claim, medical coding is necessary. The use of the proper codes to indicate the services offered to patients is ensured through accurate coding. Insurance companies use these codes to process claims and determine whether the patient’s insurance policy covers the given treatments.

Minimized Claim Denials

Denials of claims can be decreased with accurate medical coding. Insurance companies may reject medical claims when they are presented with incorrect or missing codes, which causes delays or lost income for healthcare providers. The probability of claims being denied is decreased by accurate medical coding, which helps guarantee that claims are submitted correctly the first time.

Swift Claim Processing

The processing of claims can be sped up by accurate medical coding. Insurance companies can process claims swiftly and pay the healthcare provider when claims are presented with precise codes.

Better Reimbursement 

Determining the rates at which healthcare services are reimbursed depends heavily on medical coding. Accurate coding can ensure that healthcare practitioners are paid appropriately for their services.

Higher Revenue

Medical coding mistakes, particularly during treatment procedures, may affect insurance coverage. Using the proper medical code for the treatment can mean the difference between $20 and $2000 in scope and income.

A survey conducted by the Medical Group Management Association (MGMA) found that respondents in the profession reported an average increase in denials of 17% in 2021 alone. According to industry averages, up to 20% of all claims are rejected, and up to 60% of returned claims are never resubmitted. The expense of reworking or appealing denials, which averages $25 per claim for practitioners and a staggering $181 per claim for hospitals, further hurts the bottom line.

Boost Revenue With Bell MedEx’s Expert Coding Services

Bell MedEx has developed a very effective procedure to provide reliable medical coding solutions. The company offers its medical coders cutting-edge coding software that speeds up the coding process and ensures greater accuracy. Certified Medical Coders have been hired and taught. From inpatient and allergy to emergency and urology, Bell MedEx enables coding based on the kind of visit and specialization, covering all the specialties. Expert coders ensure no coding errors and the most accurate billing by being well-versed in the most recent and revised ICD-10 and CPT codes.


The medical coding process significantly impacts revenue cycle performance in the current era of value-driven reimbursements. The task of medical coding is being done invisibly in the middle of the revenue cycle. Charges are processed more quickly when done correctly, and the claim is examined successfully in the shortest time possible. You may manage your revenue cycle skillfully by selecting the appropriate medical billing partner, like Bell MedEx.

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