What Is Medical Billing and Coding? A Complete Guide to the Basics
03/21/2025
What Is Medical Billing and Coding?
Medical billing and coding involves identifying diagnoses, medical tests, treatments, and procedures in clinical documentation. This information is then transcribed into standardized codes.
Medical billers create a bill for the insurance company, often referred to as a claim, using information from medical coders. Medical coders translate diagnostic medical procedures and prescriptions into standardized codes. They serve as intermediaries between healthcare providers and billing officers.
Together, they may ensure that all healthcare professionals and providers are accurately paid for the services they provide.
Understanding the Medical Billing Process
Medical billers may act as a communicator between patients, healthcare providers, and health insurance companies, to ensure proper reimbursement1 for healthcare services.
Typical medical billing processes2 may vary, but medical records specialists, also known as medical billers, enter patient data into the "healthcare industry's numerical coding system" to create a claim using a specific form or software to send to the insurance company.
Insurance and Reimbursement
After a claim is submitted to the insurance company, it is processed to determine the reimbursement amount on a patient's insurance policy.
After the claim is processed, the patient will receive an Explanation of Benefits (EOB)3 detailing how much the insurance paid and what the patient owes. If the insurance doesn't fully cover the cost, the patient is then billed for the rest.
The Importance of Accuracy in Medical Billing
Accuracy in medical billing and coding is essential. Incorrect coding can lead to claim denials or delayed payments to patients or healthcare providers.
When insurance claims are denied, it takes time to investigate and resolve the issues, causing the healthcare providers to go without payment. Billing errors may lead to potential legal issues if charges come back as inaccurate.
Medical Coding Systems
After medical billers process patient information, medical coders assign the diagnostic codes for patient care into specific systems. As a medical coder, there is a standardized language for all healthcare providers. It's important for medical coders to be accurate in assigning codes so that they provide accurate coding and billing for healthcare system.
Medical coders use standardized coding systems such as ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification) and HCPCS (Healthcare Common Procedure Coding System).
The Current Procedural Terminology (CPT) system, developed by the American Medical Association®, categorizes medical, surgical, and diagnostic services.
Education and Certification
Medical Billing and Coding Programs
Rasmussen University offers students a medical billing and coding certificate4 program that's entirely online. Students may complete the program in as few as nine months. Completion time is dependent on transfer credits accepted and the number of courses completed each term.
The Rasmussen University certificate program trains students to hone skills in coding systems and billing technology, information security and general healthcare. They also offer coding training in virtual labs with no previous health information experience required. Students can also work toward an associate degree or bachelor's degree in something like Health Information Technology or something similar.
The certificate program may also help students prepare for national coding certification exams such as the American Health Information Management Association® (AHIMA) Certified Coding Associate (CCA®) Credential or, with a specified amount of direct medical coding experience, the AHIMA Certified Coding Specialist (CCS®).
Rasmussen University also offers AHIMA® virtual labs to provide students with access to state-of-the-art health information software, 3M® and Clintegrity. These labs offer simulations where students can practice making decisions, reviewing redacted and sample patient records, and interact with online medical billing and coding records.
After certificate completion, students will know how to:
Navigate actual coding and billing technology
Apply ICD and CPT coding guidelines in billing
Develop knowledge of health information ethics and privacy and security of patient data
Certification Options
There are many certification options for medical billers and coders. Some employers may seek applicants with certifications or expect specific certification credentials from employees depending on a job role or data they're accessing.
The CPC (Certified Professional Coder®) certification5 may be offered for medical coding professionals in physician office settings.
The CPB® (Certified Professional Biller) certification may prepare medical billers with the technical knowledge and skills to maintain aspects of the revenue cycle of medical offices.
Certifications require students to pass the certification examination and may require a specified amount of relevant work experience. It is important to check the requirements of the certification examination you are looking to sit for by contacting the organization that administers the examination.
Career Outlook
Job Outlook for Medical Billing and Coding Specialists
The U.S. Bureau of Labor Statistics estimates6 that the need for medical records specialists may grow 9% in the next decade.
As the population ages, so does the need for medical and health care providers. According to the BLS, more medical records specialists may be essential to translate patient information into codes for the revenue cycle.
How Technology Is Shaping the Future of Medical Billing and Coding
Advances in technology and changes in healthcare regulations will require medical billing specialists and coding specialists to stay up-to-date with the new coding guidelines and billing regulations.
With the development of artificial intelligence (AI), the BLS indicates6 that machine learning and coding processes may impact work for medical coders, but there is still a lot of research to be done to see the results on the medical billing field.
Medical billing and coding will continue to play a critical role in the healthcare industry, ensuring accurate and efficient reimbursement for medical services.
What Comes Next With Medical Billing and Coding
Whether you're ready to begin a medical billing and coding certificate program4 or you want to learn more about a specific area, check out our blog on medical billing and coding process or how to break down the differences between Health Information Technology and medical billing and coding, check out our blog.
Most coding positions are not considered "entry level"; a combination of education and work experience is typically required to attain a coding position. Similarly, coders, especially those who are new to the field, should not expect to find a position where they can work from home. Most coding positions require onsite work.
American Medical Association® is a registered trademark of American Medical Association AMA PLAZA 330 NORTH WABASH AVE., SUITE 39300 Chicago, ILLINOIS UNITED STATES 606115885
AHIMA® is a registered trademark of American Health Information Management Association 35 W. Wacker Drive, 16th Floor Chicago, ILLINOIS UNITED STATES 60601-5809
CCA® is a registered trademark of American Health Information Management Association 35 W. Wacker Drive, 16th Floor Chicago, ILLINOIS UNITED STATES 60601-5809
CCS® is a registered trademark of American Health Information Management Association 35 W. Wacker Drive, 16th Floor Chicago, ILLINOIS UNITED STATES 60601-5809
3M® is a registered trademark of 3M COMPANY 3M CENTER, 2501 HUDSON ROAD 2501 HUDSON ROAD ST PAUL, MINNESOTA UNITED STATES 55144
Certified Professional Coder® is a registered trademark of American Academy Holdings, LLC Suite F 2233 South Presidents Drive Salt Lake City, UTAH UNITED STATES 84120
CPB® is a registered trademark of American Academy Holdings, LLC Suite F 2233 South Presidents Drive Salt Lake City, UTAH UNITED STATES 84120
1National Center for Biotechnology Information, U.S. National Library of Medicine, Medical Records and Health Information Technicians, at https://pmc.ncbi.nlm.nih.gov/articles/PMC10262600/ (visited Feb. 24, 2025).
2Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Medical Records and Health Information Technicians, at https://www.bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.htm#tab-2 (visited Feb. 24, 2025).
3Centers for Medicare & Medicaid Services, Explanation of Benefits, at https://www.cms.gov/medical-bill-rights/help/guides/explanation-of-benefits (visited Feb. 24, 2025).
4Rasmussen University, Medical Billing and Coding Certificate, at https://www.rasmussen.edu/degrees/health-sciences/health-information-management/medical-billing-and-coding-certificate/ (visited Feb. 24, 2025).
5Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Medical Records and Health Information Technicians, at https://www.bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.htm#tab-4 (visited Feb. 24, 2025).
6Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Medical Records and Health Information Technicians, at https://www.bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.htm#tab-6 (visited Feb. 24, 2025).
