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Why is Medical Billing and Coding Important?

For a healthcare practice, patient care is more important than anything else. However, there is one more thing that has paramount importance for the method, and that is revenue management. A healthcare practice needs to improve at managing its revenues and cash flows and will likely suffer heavy financial losses. Medical coding and billing are the two most critical factors in the revenue cycle management of a healthcare practice, as they play an essential role in receiving reimbursement amounts for the services provided to the patients. So in this blog, we will discuss in detail why medical billing and coding are necessary for healthcare practice, but before we begin, let’s understand what medical billing and coding are. 

What is Medical Billing?

Medical billing is a billing process in which billing is done by generating a healthcare insurance claim and submitting it to the insurer for reimbursement of the healthcare services provided to a patient. 

The insurance claim is generated either by a professional medical biller, office manager, or healthcare provider, and it includes all the details about the medical services provided to a patient, such as diagnosis, treatment, or prescription medicine. 

What is Medical Coding?

Medical coding is the process in which a medical coder reads the medical reports of a patient and translates all the medical procedures he has gone through in the form of codes. Usually, there is a set of codes that a medical coder uses for encoding various medical procedures. 

Each procedure or diagnosis has a unique code, and it’s the coder’s job to assign the correct codes to the proper procedures. Once all the procedures are encoded, a medical insurance claim is submitted to an insurance company for reimbursement.

Why is Medical Billing and Coding Important?

Cash Flow and Revenue Cycle Management: 

Accurate medical coding and billing help healthcare practices in revenue cycle management and significantly improve their cash flow. When the services provided to patients are coded and billed on time, the method will get reimbursement faster, which will lead to improved cash flow and have a good impact on the practice’s financial health.

Improved Patient Care:

When a practice hires a professional medical biller and coder, it helps their providers provide better care services to their patients, which not only helps increase the revenue but also improves patient care. Suppose a healthcare provider knows that he doesn’t have to be concerned about the billing and coding because a dedicated resource takes care of it. In that case, he can be more focused on his duty, eventually resulting in increased patient satisfaction. Moreover, it leads to shorter wait times for patients. 

Reduced Financial Losses:

One big reason why medical billing and coding are essentialis that it helps healthcare practices in reducing their financial losses. Billing and coding mistakes are a common challenge many methods face, resulting in delayed or denied claim reimbursements. However, with a proper medical billing and coding system in place, practices can prevent financial losses effectively while receiving increased payment reimbursements from insurers with a low claim denial ratio.      

Regulatory Compliance:

Running a healthcare practice in the US means dealing with strict regulatory compliance. If you cannot comply with any of the regulations or guidelines set by the concerned authorities, it may result in heavy penalties or even suspension. When practices hire medical billers and coders, it helps them comply with HIPAA and other privacy rules, which leads to secure patient data and lowers the risk of potential HIPAA violations.

Should I Pursue A Career As A Medical Biller and Coder in 2023?

The simple answer is “Yes, Definitely!”

Almost every country in the world, including the US, faces the challenge of healthcare workforce shortage in 2023 and will continue to face it in the coming years. The same is the case with medical records specialists and health information technicians.

The average pay of a medical biller or coder in the US is around $22.43 per hour, which is okay because you don’t necessarily need a degree to become a medical biller or coder.   

However, you also need to know that if you have an associate’s or bachelor’s degree, you can end up getting a job with a yearly salary of up to $70,000, which is quite competitive.   


Medical billing and coding are essential components of the revenue cycle management of healthcare practice, so they have paramount importance. Without an efficient medical billing and coding process, a method can’t achieve sustainable financial growth. Moreover, it helps increase patient satisfaction and regulatory compliance and reduces financial losses for better revenue collection. 

Frequently Asked Questions (FAQs)

Are medical billing and coding difficult?

Yes, medical billing and coding are difficult as they require both education and training. However, one can become a medical coder or biller if he is willing to put in some hard work. 

How many coding systems are there in medical coding?

As of 2023, there are 5 medical coding systems that are being used in the US, which are CPT, ICD-11, ICD-10-CM, ICD-10-PCS, and HCPCS Level II. 

What do CPT codes mean?

CPT codes stand for Current Procedural Terminology codes, and they are used by healthcare providers and coders to encode medical services provided to a patient.  

Can a medical coder change a physician’s code?

If a physician has assigned a wrong code to a procedure, then the medical coder can change it for correction. 

Can a physician do medical coding?

Yes, a physician can be a medical coder if he knows how to encode procedures based on patient documentation.  


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