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Billing Codes Basics

Updated: Dec 20, 2023

Billing codes basics
Billing codes basics

By Martine G. Brousse

"The Medical Bill Whisperer"

Patient Advocate, Certified Mediator



Jan 10, 2024


In healthcare, and especially in insurances’ approval and claims paying-process, codes rule.

Descriptions are not enough, and missing one code or miscoding one will result in rejections with heavy financial consequences for you, the patient.


Let’s look at the most important ones


A. what are “Codes”?


1.     They are used by medical providers and insurers to be able to identify, recognize and process demographic information and clinical data.

2.     Codes are the uniform classification of data across every system relating to and from the providing of medical services to paying for them

3.     They are used for reporting purposes to State and Federal Health agencies, including reporting requirements relating to quality of care, potential outbreaks, adverse events, etc

4.     Approvals and payments are made based on codes, as they rely on medical policies, terms of coverage and other criteria also based on codes


B.    Procedure Codes:

1.     CPT:

  • issued by the American Medical Association, they identify medical, surgical and diagnostic services in great details, including level of care, emergency, complexity, time spent etc

  • Codes are 5 digits, and must be supported by medical records

  • Examples: 44950 (appendectomy) – 99214 (office visit, level IV) – 00790: anesthesia, upper abdomen surgical intervention


  • Issued by the Center for Medicare and Medicaid Services, they identify other services and items not listed with CPT

  • Codes are 5 alphanumeric

  • Examples: A0021 (ground emergency ambulance service, advance life support) – J9045 (chemotherapy/Carboplatin) – E0112 (crutches)

3. NDC

  • Issued by the FDA for every Rx either prescribed or over-the-counter

  • A 10 or 11 digit 3-segment code indicates the manufacturer, name, dosage, strength and package size of the drug

  • Examples: 0777-3105-02 (Prozac 20 mg 100-count) - 0071-0155-23 (Lipitor 10 mg 90 tablets)


C. Diagnosis Codes


1. ICD-10:

  • Alpha numeric codes, they detail every condition, symptom, illness, event that has led to the visit, procedure, treatment, intervention or prescription

  • Must be coded to the highest possible level of accuracy

  • “Unspecified” codes are available, but may not be payable

  • Examples: Z48.21 (encounter for aftercare after heart transplant) – F84.0 (autism) – K50.012 (Crohn’s disease with intestinal obstruction)

  • Each body part/system starts with a designated letter


D. Place of Service codes

  • A 2-digit code, they indicate where services were rendered

  • Example: 11 (inpatient in a facility) – 12 (medical provider’s office) – 72 (rural health clinic)


E. Provider identification Codes


1.     TIN:

The Tax ID number indicates:

  • Who is the financial entity requesting payment (an individual, facility, group, or system)

  • Whether payment will be made at the IN or OUT OF NETWORK rate based on the existence of a contract between that tax ID# and the insurance plan

2.     NPI:

  • The 10-digit number assigned to every individual professional or organization providing medical care, including their type of license

  • It identifies who exactly provided the service, as opposed as to who should receive payment (i.e. a RN employee’s NPI is listed as the actual provider of a service but the medical group employing her gets paid)


F. Common Coding Issues


1.     Incorrect coding due to simple oversight: Z instead of 2, O instead of 0

2.     Mismatched codes: procedure code and diagnosis code do not match, or place of service is inconsistent with the procedure

Example: Cholesterol lab billed with “breast cancer” or knee replacement surgery billed with “hip fracture” – “inpatient hospital” place of service with an outpatient MRI test


3.     “Unspecified” or too general:

  • insurances routinely consider a treatment or service for an “unspecified” diagnosis to be experimental or not medically necessary, and will reject the claim.

  • If more accurate codes are available listing the side of the body (i.e. left wrist), a more general code (fracture of wrist) may be rejected.

4.     Miscoding:

  • “not payable” or “inclusive” codes: for services deemed part of the main procedure, such as venipuncture (drawing of blood) billed with a lab.

  • Unbundling: Codes determined to be included with the general payment for the main procedure (i.e suturing as part of a surgery, or taking vitals before chemotherapy)

  • Missing units or modifiers: these additional codes indicate measures of time (one hour = 4 units for ABA therapy) or special circumstances (teledoc visit for example). Some CPT or HCPCS code require them to calculate payments.

Final Tip:

If your provider does not bill insurance, and provides you with an invoice instead, demand that it include all the codes listed here, as mere description of services and diagnosis will NOT be enough to get you reimbursed, nor would a missing Tax ID# or NPI.


Martine Brousse, the Medical Bill Whisperer, was a long-time Billing Manager before switching to the side of patients in 2013. The move has allowed her to apply her deep expertise and vast experience of the intricacies of resolving all types of medical bills and claim payment issues in ways that directly and positively impact her clientsʻ finances.

Her YouTube channel videos offer answers, insights and solutions, educating and empowering patients about the healthcare system.

(424) 999 4705 - F (424) 226 1330

@martine brousse 2024 @ the medical bill whisperer 2024

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