Understanding Medical Codes and Coding Classification Systems

Medical coding classification systems are groups of codes that correspond to individual procedures and diagnoses. They are used to accurately track information about diseases and health conditions in patient records and play a role in the medical billing process.

Medical coding classification systems aren’t used only by hospitals and care facilities. Government health programs such as Medicare and private insurers also use them for a variety of purposes, including statistical analysis of diseases and procedures, claims and reimbursement, tracking outbreaks and with decision support systems.

Under the larger umbrella of medical coding classification systems, there are different categories that are used for specific purposes. For instance, diagnosis codes are used by care providers to classify diseases and symptoms, while procedural codes are used to identify surgical or medical procedures. Identifying the category that a medical coding system falls under can help you better understand its purpose and function.

The following list provides a brief overview of some classification systems used in the medical billing and coding field.

ICD-11 is the latest revision of the International Classification of Diseases (ICD) and is intended to replace ICD-10 as the new global standard for diagnostic codes. ICD-11 went into use in January 2022 and is used to meticulously classify everything from diseases to various symptoms. It also recodifies the classification area of some diseases, expands the definitions for sexual health and includes new entries for immune system and sleep-wake disorders, among other new diagnoses.

The ICD-10-CM is the clinical modification (CM) of the previous version of the ICD, ICD-10. This version of the ICD is designed to be used in a clinical setting and contains a modifier to achieve level of detail that meets reporting needs within the United States. ICD-10-CM also differs from the standard ICD-10 codes in granularity. The medical codes in ICD-10-CM are more detailed and are especially useful for clinical, outpatient applications because they allow for clarification about the severity of a disease or condition.

The ICD-10-PCS is the procedural-focused version of the ICD, ICD-10. Unlike the ICD-10-CM, which is meant for more detailed classification of diseases and conditions, the ICD-10-PCS contains more detailed medical codes for procedures and equipment and is used for inpatient settings.

CPT stands for Current Procedural Terminology and is used to report diagnostic, surgical and medical procedures to relevant parties. CPT is a procedural medical coding classification system, meaning that it identifies the procedures that doctors and other care providers perform to help their patients. Its primary purpose is to communicate these procedures in a standardized way for administrative and analytical uses.

The Healthcare Common Procedure Coding System Level II, or HCPCS, is based on CPT. HCPCS codes are used to delineate non-physician services that are not included in the CPT jurisdiction, such as ambulances, drugs and prosthetics.

Typically, you'll find both ICD codes and CPT codes in a medical bill. The ICD codes denote your diagnosis and are used on hospital records, medical charts, visit summaries, bills and other patient paperwork to ensure the proper delivery of medical care. Meanwhile, the CPT codes correspond to the medical treatments you received during a visit.

According to the World Health Organization, the goal of ICD implementation is to generate comparable health data at the international level. A few quick facts about ICD-11 and how the system is used include:

The ICD-10 medical codes consist of a letter, then two digits to the left of the decimal point and one digit to the right. The letters categorize diseases based on specific conditions or organ systems. For example, A refers to infectious and parasitic diseases, C denotes cancer, E covers endocrine, nutritional or metabolic conditions and K stands for the digestive system. So E10.9 refers to type 1 diabetes and K21.9 is for gastroesophageal reflux disease (GERD).

With the release of ICD-11, medical codes will be updated with the addition of one number preceding the letter and one at the end. For instance, X98.6 in ICD-10 will be changed to 0X98.60 in ICD-11. The letters I and O will no longer be used in order to avoid confusion with the numbers 1 and 0.

When you leave a medical appointment or receive a medical bill, you'll get a summary of the visit that includes various codes. You can also find these codes in the explanation of benefits (EOB) from your insurance provider, Medicare or other payers.

The ICD codes appear in the "diagnosis" or "Dx" section of a medical bill. To find out what an ICD medical code stands for, you can go to the Centers for Disease Control and Prevention (CDC)'s ICD-10 searchable database, select the current ICD-10 code set and enter the code in the search box.

The American Medical Association (AMA) has organized CPT codes in a logical manner, in 3 classifications: