Medical Coding and Billing


Medical coding is among the most in demand professions in the USA and around the world. If you ever had, and still have an interest in the industry of healthcare then the best time to get started is NOW.

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Medical Coding and Health Insurance Claims

The CMS 1500 health insurance claim form is the standard form used by a non-institutional provider, or supplier to bill Medicare carriers, and durable medical equipment regional carriers (DMERCs) when a provider qualifies for a waiver from the Administrative Simplification Compliance Act (ASCA) requirement for electronic submission of claims. It is also used for billing of some Medicaid State Agencies.

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Practical Medical Coding Process

Medical coders do not make up the codes as they go along, nor do they code from memory. The coder selects appropriate codes from different existing coding systems for different purposes. For example, there are the ICD-9-CM systems for international classification of diseases, and Level I HCPCS (CPT-4 codes) for current procedural terminology used by hospital providers and certain Level II HCPCS codes for hospitals, physicians and other health professionals. Then there are the DRG codes (diagnosis related groups), and RBRVS for resource based values, and last but not least, the V codes used to indicate the reason for an encounter (NOT procedure codes!).

The medical coding process involves 5 stages:

  1. coding
  2. editing
  3. quality assurance
  4. quality control
  5. submitting final output to clients, or the medical billing department

The combination of these codes tells the payer what was wrong with the patient, whether treatment was necessary, and what services were performed. This makes it easier to handle these claims and lets heath care insurance companies identify and reimburse the provider on a predetermined basis.

Form # CMS 1500
Purpose Used by providers to be reimbursed for services.
Form Title Health Insurance Claim Form
Revision Date 08/01/2005
O.M.B. # 0938-0999
O.M.B. Expiration Date 11/30/2010
CMS Manual N/A
Special Instructions N/A
National Uniform Claim Committee (NUCC)

CMS 1500 health insurance claim form

(formerly known as HCFA-1500)

The revised Form CMS-1500 (08/05) became effective for optional use starting January 2, 2007 through March 30, 2007, and was then required as of April 2, 2007. This new form allows a qualifying health care provider to submit reimbursement claims to Medicare by mail. Here is a sample CMS-1500 health insurance claim form. You will notice that the standard health insurance CMS 1500 claim form cannot be filled out on your computer. It must be printed, and then filled out by hand. If you want to keep a copy as part of an electronic record you must scan it. Indeed, there are vendors that offer CMS-1500 form filler software that fill out the forms on a PC, and save the claims to the hard drive. No doubt, the tricky part with this is figuring out the printer margin settings.


One might wonder whether the restrictions of filling out and keeping the CMS 1500 health insurance claim form on a computer is because of HIPAA rules. However, this is not so. A biller filling out a claim form on the computer is not in HIPAA violation, because medical coding and billing professionals are part of the Treatment-Payment-Health care operations of the HIPAA chain. It doesnt matter if the form is filled out by hand or through a software program. As long as it meets NUCC, and the insurance company's requirements.

When Billing For a Group Practice

On November 17, 2008, 03:30:09 AM the following question was posted to our Medical Billing Community forum ยป Question About CMS 1500 Forms:

Can someone tell me when you are billing on a CMS 1500 form and you are a provider that is in a group, would you use the group NPI number in Box 33a, or should we use the provider's NPI number. Also in box 33b should that be the tax Id number? In box 24J (Rendering Provider ID) should the shaded portion be the group NPI, and the unshaded portion be the provider NPI? I really need your help. Thanks!

The answer is rather simple:

  • When billing for a group practice, the individual provider's NPI is placed in block 24J.
  • Do not enter anything in block 32B and 33B.
  • NPI's only now on the claim form, there is no need to cross-reference the old legacy numbers with the new NPI numbers!
  • Do not put the individual provider's NPI in 24J unless he is part of a GROUP! Medicare will reject claims with an NPI in 24J if the provider is a sole practitioner!

(Answered by Michelle M. Rimmer, CHI, Textbook author "Medical Billing 101")

To add:
Insurance companies will no longer accept the old HCFA 1500 form, mainly because they have upgraded their software to accept the new form. Please contact your Medicaid State Agency for more details.

Diagnosis and Service Codes...

Medical coders analyze medical source documents, assign universal alphanumeric codes, and verify that the diagnosis matches the procedure codes. This is vital to medical quality control, medical billing, medical research, health care statistics, and the reimbursement process for the provider. Furthermore, accurate coding makes the medical record keeping and practice management processes more cost-effective and reliable.

Diagnosis Codes: In medicine, diagnostic codes are used to group and identify diseases, disorders, symptoms, and medical signs, and are used to measure morbidity and mortality.


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