What is medical coding? Medical codes assign a numeric value to medical diagnoses, procedures and surgery, signs and symptoms of disease and ill-defined conditions, poisoning and adverse effects of drugs, complications of surgery and medical care.

The clinical coding systems currently used in the United States are ICD-9-CM and HCPCS (Level I CPT codes and Level II National Codes). The International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) diagnosis codes are used by all health care settings including hospitals, physicians, nursing homes, home health agencies and other providers. ICD-9-CM procedure codes are used to collect hospital inpatient procedural data. The Healthcare Common Procedure Coding System (HCPCS) is used to report hospital outpatient procedures and physician services.

These coding systems serve an important function for physician reimbursement, hospital payments, quality review, benchmarking measurement and the collection of general medical statistical data.