Why Use Medical Billing Codes Rather Than Words?

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Medical codes are a way to translate medical information like diagnoses, procedures, and medical equipment into language that both computers and people speaking different languages can understand. They’re used in countries across the world by the health care industry, the health insurance industry, governmental agencies, and the big data industry.

Why Use Medical Codes Rather Than Words?

When using computerized systems, it’s easier to transmit large volumes of detailed information in numeric or alphanumeric codes than it is using word-based languages.

For example, a hospital medical record could contain hundreds of pages of words. It’s not practical to consider transmitting every word of that record to all of the end-users that need it such as health insurance claims processors, public health entities, governmental agencies, and researchers.  

There’s no way all of the information contained in the hundreds of thousands of hospital and clinic medical records produced each day could be transmitted, processed accurately, and analyzed in a timely fashion if we used words and paragraphs like you’re reading now. Instead, we translate the most important parts of those records into numeric or alphanumeric codes.

Using medical codes, we can transfer millions of data sets to end users in an accurate and efficient fashion. Using medical codes rather than word-based languages to convey this information preserves the accuracy of the information even when it’s being used in different situations and for different purposes.

It also makes analyzing and using the information more efficient.

An Example of Why Medical Codes Are Used Rather Than Words

Let’s pretend that the World Health Organization needs information about how often a certain disease is occurring across the planet. Although Canada, New Zealand, and Zambia all use English as an official language, the disease may have a different colloquial name in each of these countries, or it may have the same name but be spelled differently.

The name actually used for a particular disease may differ even within a single language based on the age or training of the health care practitioner. For example, years ago it was common that diseases were named after the physician or scientist who first documented the disease. Now, diseases are usually given names that describe them rather than honor their discoverer.  While one physician may use the original name for the disease, another may use the more modern name. Add to this complexity the hundreds or thousands of languages used across the planet, and you’ll begin to understand why words aren’t the perfect language for this task.

Instead of using words, we use medical codes. In this case, the WHO could ask each country how many times the disease described by a particular ICD-10 code has been diagnosed in the past year. That code describes the same disease in North Korea as it does in Papua New Guinea and Norway, no matter the language or regional differences.

It’s Easier to Work With Data in Codes Than in Long Strings of Words

Now, let’s take the example of a health insurance company.

The company receives so many claims each day that it couldn’t possibly process them all in a timely fashion without automating part of the process. When claims are submitted using medical codes, it’s easy to automate parts of the process.

For example, perhaps a certain expensive procedure can be used to treat two different medical problems, diagnosis X and diagnosis Z. However, the health insurance company doesn’t want to pay for the procedure to treat diagnosis Z since there’s a less expensive treatment option for diagnosis Z. The health insurer will only pay for the procedure if the patient has diagnosis X.

Using medical codes to describe medical procedures as well as medical diagnoses, it’s easy for the health insurance company to automate the process of making sure the only claims paid for that procedure are in people with diagnosis X. Simple software can sort through a database of claims and kick out all of the claims for that procedure code that don’t also include the code for diagnosis X. This automated process will be much faster and likely more accurate than if a human were to read each of the medical records associated with those same claims.

In short, medical codes can be  placed into data sets more easily than long strings of words can. These data sets can then be manipulated to serve multiple purposes. Using the language of numeric or alphanumeric medical codes to describe things like diagnoses, procedures, drugs, and medical equipment makes it more easy to share information and process it accurately than if we used word-based languages.

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