Medical Coding Vs Medical Billing: What’s The Difference?

While medical coding and medical billing often operate behind the scenes, they play pivotal roles in the financial health of medical practices, hospitals and healthcare facilities.


Yet the two areas aren’t necessarily mutually exclusive. In other words, in a medical practice, you won’t choose between medical coding vs medical billing when managing the finances of your facility. Though separate in their responsibilities, they are intertwined, working in tandem to ensure the smooth operation of the healthcare revenue cycle. 


What Is Medical Coding?



Medical coding is the systematic process of converting complex medical information into universally recognized alphanumeric or numeric codes. These codes are used to document and classify various aspects of patient care, including diagnoses, medical procedures and treatments. 

medical coding vs medical billing

The coding system primarily relies on standardized code sets such as the International Classification of Diseases (ICD) and the Current Procedural Terminology (CPT) code sets, among others.


Medical coders, who are highly trained professionals, play a crucial role in the healthcare industry by reviewing patients’ medical records and transforming the information within them into these specific codes. 


When a patient visits a healthcare provider, during the encounter, healthcare professionals create detailed medical records. These records include information on the patient’s symptoms, medical history, physical examination findings, diagnoses, procedures performed and any prescribed treatments.


To extract pertinent information, trained medical coders review the patient’s medical records, which involves analyzing these clinical notes, laboratory results, imaging reports and other relevant documents. Medical coders often must have an extensive knowledge of medical terminology.


Based on the information in the medical records, coders assign specific codes using standardized code sets for medical procedures. These codes are alphanumeric or numeric and serve as a universal language in healthcare.


Coding not only simplifies the extensive clinical data but also ensures accuracy, uniformity and compliance with regulatory requirements. The coded information is then utilized for several purposes, from medical research to insurance claims processing and even healthcare analytics.


Medical coding can be handled in-house or by a professional medical billing and coding company. Working with a medical billing and coding service can offer medical practices many benefits, including:


  • Increased revenue
  • Cost savings
  • Improved focus on patient care
  • Reduced administrative burden
  • Access to expertise and tools
  • Compliance with regulations


You can read more about these advantages to your healthcare facility in our blog article, 6 Benefits Of Outsourcing To A U.S.-based Medical Billing And Coding Service.


Accurate medical coding is vital for healthcare providers since it directly affects reimbursement from health insurance companies and government programs, as well as the overall integrity of the healthcare system. It serves as a bridge between healthcare services rendered and the financial transactions that occur in the healthcare industry, making it an indispensable component of medical practice management.


What Is Medical Billing?



Medical billing is a fundamental component of the healthcare industry that involves the process of submitting and managing claims for reimbursement of medical services provided to patients. 

medical coding vs medical billing

This process includes tasks associated with translating healthcare services into financial transactions and ensuring that healthcare providers receive payment for the care they deliver. 


Here’s how medical billing works:


  • Patient Registration: The billing process starts with patient registration, where essential demographic and insurance information is collected. This information is crucial for billing and verifying the patient’s eligibility for insurance coverage.
  • Verification of Insurance: Medical billers verify the patient’s insurance coverage, including checking for co-pays, deductibles and other insurance-specific details. This step ensures that the healthcare provider bills the correct insurance company and that the patient’s financial responsibility is accurately determined.
  • Coding Review: Medical billers receive coded information from medical coders. They review this coded data to ensure accuracy and completeness before proceeding with the billing process. If there are any discrepancies, they may need to work with coders to resolve them.
  • Claim Generation: Using the coded data and patient information, medical billers create insurance claims. These claims detail the services provided, associated diagnoses, and the cost of these services. The claims are formatted in compliance with the requirements of the patient’s insurance company.
  • Claim Submission: The completed claims are submitted to the appropriate insurance companies, whether private insurers, government programs like Medicare and Medicaid, or other relevant entities. This can be done electronically (e-billing) or through paper forms, depending on the insurer’s preferences.
  • Adjudication: After receiving the claims, insurance companies review and process them. This involves verifying the accuracy of the information, determining the covered services and calculating the reimbursement amount. The insurance company may also request additional information or documentation if needed.
  • Payment Posting: When the insurance company approves a claim, they issue payment to the healthcare provider. Medical billers are responsible for posting these payments to the patient’s account in the provider’s financial records.
  • Patient Billing: If there is a patient responsibility portion (co-pays, deductibles or services not covered by insurance), medical billers generate patient statements for these amounts. These statements are sent to the patients for payment.
  • Follow-Up on Outstanding Balances: Medical billers monitor outstanding balances, follow up with patients for payment, and may engage in negotiations or payment plan arrangements to settle unpaid bills.
  • Reconciliation and Reporting: Regular reconciliation of accounts is conducted to ensure that all services are accurately documented, claims are processed and payments are received. Billing departments often generate financial reports to analyze the revenue cycle.


Medical billing is crucial for the financial health of healthcare providers and facilities. It ensures that they receive payment for the services they render, enabling them to continue providing quality care. Effective medical billing also demands compliance with regulatory requirements, accuracy and a thorough understanding of insurance processes.


Like medical coding, your billing can be handled by your in-house medical billing team or by medical billing services that can help relieve some of the pressure that comes with processing claims at lightning speed.


How Do Medical Coding And Medical Billing Work Together?



Medical coding and medical billing are two distinct but closely intertwined processes within the healthcare revenue cycle management. Their seamless collaboration is essential for healthcare providers to receive proper reimbursement for the services they render. 


Here’s a closer look at how medical billers and coders work together:


  • Coding precedes billing. The process begins with medical coding. After a patient receives healthcare services, medical coders review the patient’s medical records and translate the diagnoses, procedures and treatments into standardized codes. These codes are the foundation of the billing process.
  • Accurate codes are essential for claims. The coded data, which includes diagnosis codes (ICD) and procedure codes (CPT), is shared with the medical billing department. These codes are crucial in accurately representing the medical services provided and are used to generate insurance claims.
  • Claims are generated: Medical billers use the coded information to create insurance claims. They incorporate the coded data, patient demographics and other necessary details into the claims. This step ensures that the claims submitted to insurance companies accurately reflect the healthcare services.


The collaboration between medical coding and medical billing is vital to the financial well-being of healthcare providers and facilities. Accurate coding is the foundation for generating precise claims, while efficient billing practices ensure timely and complete reimbursement for the services provided. 


This collaboration ensures compliance with regulatory standards and insurance requirements, reducing the risk of claim denials or delayed payments.


medical coding vs medical billing

Submit Your Comment

Recent Blogs

2 min read

7 Reasons Why You May Need To Outsource Medical Billing Now

Whether your practice is facing financial strain, grappling with regulatory changes or working to enhance patient care, you’re not alone if your practice is constantly struggling with navigating the complex U.S. healthcare system.   Yet, amidst these challenges, there is some hope. Medical billing services can offer a strategic solution that offers benefits NOW and … Continue reading "7 Reasons Why You May Need To Outsource Medical Billing Now"
2 min read

Coding For Medical Billing: 5 Tips For Accuracy

Industry reports show that a whopping 20% of all medical billing claims are denied.   While medical practices can resubmit claims after errors are corrected, reports show that as many as 60% are never resubmitted to insurance companies.   Insurance claims can be denied for several reasons, from coding errors to insufficient documentation and eligibility … Continue reading "Coding For Medical Billing: 5 Tips For Accuracy"
2 min read

Why Credentialing For Medical Providers Is Ongoing

With the arrival of a new doctor at your medical practice, fresh expertise and perspectives are brought into the fold. Your office can now expand, accommodating more patients and ensuring better access to healthcare in the community.   Yet behind the scenes, administrative gears churn, signaling the need for a critical process to take place … Continue reading "Why Credentialing For Medical Providers Is Ongoing"