Why Is Coding Important?

Coding is the basis for revenue and reimbursement for healthcare facilities. When a health record is coded based on quality documentation, then that should allow for the maximum reimbursement by the third party payer to the facility. If the medical codes are entered correctly, the procedure or treatment is medically necessary, and preauthorized according to the insurance company then the claim should be approved. For example if a health record is coded for gram negative pneumonia and the documentation supports this code, then the claim should be approved. This requires that the medical record is documented to the greatest level of specificity possible in order to achieve the maximum reimbursement. Coding for the maximum reimbursement is actually encouraged by CMS. This
According to the Journal of AHIMA “accurate documentation and complete and compliant coding impacts almost all areas of quality reporting and, ultimately, provider reimbursement”. (DeVault, Easterling, & Huey, 2017, p. 52-55) Coding can also have a negative effect on the reimbursement that a facility receives. There are several reasons why a claim can be rejected for coding errors. A coder must look at all of the necessary documentation in order to get the correct codes. If a coder becomes lazy and only skims the record, then this could lead to coding the record wrong. A coder could also succumb to the stress of productivity goals and instead of using the official resources, they could just google the correct codes without reviewing all of the documentation. Using outdated codes could also be a source for incorrect coding. Codes can only be