Medical Coding vs. Medical Billing: Understanding the Core Differences

Understanding the difference between medical coding and billing is essential for revenue cycle management in any healthcare organization.

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While medical coders and billers aren’t the most visible staff members in a hospital or healthcare practice—no medical business can survive without them.

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Put simply, medical coders and billers ensure that insurers (payers) get invoiced correctly for treatment, care, and services provided. They also help healthcare businesses bill patients for any shortfall between reimbursement from the payer and the overall cost of medical care, usually referred to as a “copay.”

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But while medical coders and billers often work together, there are some important differences between their roles. 

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Whether you are a healthcare provider looking to hire a medical coder or biller, or someone interested in gaining qualifications to work in the healthcare industry—knowing the difference between a medical coder vs medical biller is very useful.

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In this article, we'll explain everything you need to know about medical billing vs medical coding. 

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Let’s start with a medical coding and billing description, so you can understand what is medical billing and coding.

What is medical coding?

Medical coding involves analyzing a patient’s medical records to collect the details of each service, diagnosis, and treatment provided to a patient, then applying an alphanumeric code to each item. It is a vital part of any healthcare business because the codes are what is sent to an insurance company for reimbursement.

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Medical coding could be thought of as a way to translate a patient’s medical record into a language (medical codes) used by insurance companies.

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When the insurance company receives the codes and other required information about a patient’s medical treatment, they reference each code on the patient’s plan, which determines the reimbursement that will be provided.  

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Medical coding must be done accurately, with great attention to detail. 

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If the wrong codes are used, a healthcare provider (and patient) could receive less reimbursement than they are entitled to, or have the insurance claim denied. Also, if claims are submitted for codes that are not reflected in the medical records, healthcare organizations could face a fraud or liability investigation. 

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What is medical billing?

Medical billing involves several activities related to creating a claim for reimbursement from insurance companies, then preparing a final bill for a patient. Billing is often separated into the front-end and back-end stages of a patient’s journey. 

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The front-end stage happens when a patient books an appointment or checks into the hospital. The medical biller would collect insurance details, verify coverage, and provide an estimate of the total cost of treatment.

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The back-end stage occurs after treatment, where the medical biller creates an itemized insurance claim based on information provided by the medical coder. They then submit a final invoice to a patient and manage any billing issues once treatment has finished.

What does a medical coder do?

The main role of a medical coder is to look at the patient’s medical records to determine the exact procedures and services provided to a patient, then line these up with the correct medical codes.

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This requires a good understanding of medical terminology and medical procedures. The medical coder also might need to speak to doctors, nurses, and other healthcare professionals to clarify any aspects of the clinical notes and patient records that are unclear.

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To do their job well, the medical coder must be familiar with the Procedure Coding System (PCS) from the International Statistical Classification of Diseases and Related Health Problems, Tenth Revision (ICD-10). They also need to understand the Current Procedural Terminology (CPT) coding system maintained by the American Medical Association (AMA). 

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At the end of a hospital stay or episode of care, a medical coder analyzes the patient’s medical record and compiles the corresponding codes for every aspect of treatment provided. A medical biller can then use the codes to claim reimbursement from the patient’s insurance company.

Daily Tasks of a Medical Coder

To show some medical billing and coding examples, here are the main daily tasks of a medical coder.

• Reviewing documentation by doctors and healthcare professionals to ensure adequate details about treatments and diagnoses are included
• Translating medical records documentation into standardized medical codes
• Discussing any missing details or inconsistencies in documentation with healthcare providers
• Providing advice and consultation on anything to do with medical codes
• Ensuring patient records comply with relevant regulations and guidelines  

What does a medical biller do?

Medical billers spend most of their time creating and submitting claims for medical treatment to insurance companies. They are also responsible for creating bills for patients. Overall, they manage all aspects between bill payers and patients.

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A medical biller must be familiar with all aspects of the insurance claims process. This can include understanding the correct format in which to submit claims, how to manage claims denials or requests for additional information, and when to follow up on outstanding payments from insurers.

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Being a medical biller involves interacting with patients regularly. When working as a medical biller, you might have to collect a patient’s insurance details, discuss any queries or concerns about coverage, and organize payment for any outstanding amounts after treatment is completed.

Daily Tasks of a Medical Biller

To help understand medical billing and coding meaning in a healthcare setting, here are some of the main tasks of a medical biller.

• Collecting patient insurance and demographic details, then entering this into a records management system
• Confirming coverage and providing an estimate of costs to patients before treatment is provided
• Creating accurate and complete insurance claims for submission and reimbursement
• Managing claims denial processes for a healthcare business or organization
• Preparing bills for patients, deducting reimbursement from the insurer from the total cost of treatment provided
• Tracking and following up on outstanding payments from insurers and patients

Medical coding vs. medical billing

While both roles are mainly concerned with revenue cycle management, there are some important differences between medical billing vs medical coding.  

Training and Education

Many training institutes offer diplomas and associate degrees in medical billing, medical coding, and both combined. While it’s not mandatory to undertake training and education, most employers require billers and coders to have an associate’s degree or diploma.

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There is an element of on-the-job training as a medical biller or coder. This might involve things like learning about specific treatments a medical practice provides, understanding how to use specific software systems, or adapting to the requirements of different insurers. 

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Medical billing and coding courses can be taken in person or online. Training generally covers areas like:

• Medical terminology
• The use of software programs
• An overview of the health insurance system
• Financial skills
• Legal aspects of medical billing
• Communication skills

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Coding and Billing Certifications

Employers can generally decide whether they will require their medical coders and billers to hold a certification. Again, while this is not mandatory, most employers only hire certified medical billers and coders.

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Hiring certified medical billers and coders ensures staff have the relevant training and experience to adequately perform the role and understand what is coding and billing. This provides peace of mind for an employer during the recruitment process. Certification can also help employees stand out to prospective employers. 

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Several organizations provide certification for medical coding and billing, such as:

• The American Academy of Professional Coders (AAPC)
• The American Health Information Management Association (AHIMA)
• The American Medical Billing Association (AMBA) 

Common job tasks and skills

While there are some technical differences between medical billing vs coding, the roles also share some common job tasks and skills. 

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Medical billing and coding examples of shared duties and skills include:

1. Ability to pay very high attention to detail
2. Strong mathematics skills
3. Well-developed written and verbal communication skills
4. Knowledge of healthcare laws and regulations around patient data, insurance, and confidentiality
5. Understanding of computer software systems, with a willingness to learn new processes and databases
6. Highly organized with good record-keeping and documentation skills
7. Willingness to solve problems independently and in cooperation with others

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Also, keep in mind that some people work as both medical coder and biller in the same role. 

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Many training courses cover both sets of skills, and some organizations prefer to hire staff to complete both roles. This might be because they are a small practice and can only justify taking on one staff member. Or, because a business prefers it’s staff to have a diverse skill set.

Average Salary

The average salary for a medical coder (classified as a ‘Medical Records Specialist’ by the Bureau of Labor Statistics) in the United States is $46,660 per year, or $22.43 per hour.

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The salary for a medical biller (titled ‘Billing and Posting Clerk’) is slightly lower than that of a medical coder, at $42,750 per year, or $20.55 an hour.  

Which one should I choose?

The decision of whether to hire a medical coder vs. medical biller depends on the nature of your healthcare business.

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Large medical organizations, like hospitals, day facilities, and busy outpatient clinics would usually hire separate staff to perform medical billing and medical coding jobs. These medical businesses process enough insurance claims and patient invoices that it makes practical and financial sense to separate medical billing and coding roles.

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For smaller healthcare facilities and practices, management may prefer to hire staff to perform combined medical coding and billing roles. This means less staff can be hired, and if one staff member is away, another can step in to cover for them.

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If you’re considering a career as a medical biller or coder, think about the differences between what is medical coding and billing. You might like to complete a training course that covers the skills needed for both. That way, you have the option of trying out both roles to see which areas of the difference between medical billing and coding is the best fit for your abilities and personality.

The Future Demand for Medical Coding & Medical Billing Professionals

If you consider the importance of what does medical coding and billing do in the healthcare system, it’s no surprise the future demand for medical billing and coding professionals is set to grow. In general, people completing either qualification have a good chance of obtaining employment in the field, with thousands of jobs posted each month. There is, however, some difference between medical coding and billing future demand that we’ll detail below.

Medical Coding

Between 2021 and 2031, demand for medical coders is expected to grow by 7 percent.

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Medical coders are employed in every area of the healthcare system, from primary care practices, to large hospitals, to specialty medical practices, and even research institutes. 

Medical Billing

Demand for medical billers in the U.S. is expected to grow by 13 percent until 2026.

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Again, all segments of the medical system require medical billers. The financial skills learned as a medical biller may also be applicable to other areas of healthcare revenue cycle management and billing management in other industries as well. 

Choose Pharmbills for Accurate Medical Coding and Billing Services

If you are looking for fully qualified, professional medical coders and billers — Pharmbills can help.

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Not only are our staff trained and proficient in every aspect of coding and billing, but because we utilize offshore outsourcing and outstaffing solutions, our medical billers and coders are available for a fraction of the price of local talent.

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Whether you need medical billers, medical coders, or staff who can perform both roles, our efficient five-step process ensures easy setup, collaboration, and swift, long-lasting results:

1. Sign on with Pharmbills
2. Select your customized team
3. Sync up IT infrastructure
4. Integrate with your team
5. Monitor performance

Conclusion

Medical coders and billers perform essential functions in revenue cycle management for every healthcare organization and medical practice.

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Put simply, without medical coders and billers, it would be nearly impossible for healthcare businesses to submit claims for reimbursement from insurance companies and collect payment from patients.

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But the true value of a medical biller and coder goes beyond simply collecting reimbursement and payments. 

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An experienced and highly-trained medical biller or coder will help your organization optimize end-to-end revenue cycle management. They achieve this by ensuring insurance claims are submitted to maximize reimbursement and reduce denials, while setting up streamlined systems to efficiently collect co-pays from patients.  

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This helps medical businesses remain profitable, competitive, and efficient, setting your organization up for strong growth in the future.

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To find out how Pharmbills can help you optimize revenue cycle management through improved medical coding and medical billing solutions — contact us. Our team of experienced professionals are experts in the healthcare, pharmacy, and real estate sectors. But we can also work with businesses of other types, no matter the industry, location, or size.