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Coding and Billing Procedures in Healthcare

In order to comply with Medicare rules and federal regulations, medical institutions often implement several coding and billing regulations. The Health Insurance Portability And Accountability Act (HIPAA) refers to the necessity to maintain patient privacy and implement specific codes for patient diagnosis (Peregrin, 2021). In contrast, the Healthcare Common Procedure Coding System (HCPCS) is a set of procedure codes utilized by the American Medical Association’s Current Procedural Terminology that classifies various items and services offered by the organization (Kliethermes, 2017). After that, Diagnosis-Related Groups (DRG) is a classification system that refers to inpatient treating, which separates the available procedures focusing on the client’s diagnosis and purpose of payment (Lee et al., 2020). This regulation suggests separate codes from HIPAA and disregards medical devices coding as suggested by HCPCS. Finally, the Hospital-Acquired Condition Reduction Program (HACRP) is billing legislation that evaluates the hospital’s treatment techniques, which might result in payment modifications and reimbursements (Lee et al., 2020). However, only HCPCS and DRG are commonly applied to prospective payment systems, as they are based on a predetermined amount of finances to be paid for a particular service.

Both HCPCS and DRG can significantly affect the health care organizations’ reimbursement procedures, determining which services and funds will be compensated. While HCPCS can alleviate the losses for medicine and electronic devices, DRG concerns the duration of the patient’s stay, covering the expenses for received treatment and medication (Bauder et al., 2017). Therefore, these regulations can substantially influence the reimbursement funds received by the medical organization, decreasing or increasing the finances paid for client therapy and purchased equipment.

I believe that the coding and billing systems are highly efficient for maintaining a proper level of organization in medical institutions. These regulations establish productive communication between providers and suppliers. Nevertheless, as reimbursement and appropriate billing hinges on accurate coding procedures, which become substantially more complex with years, numerous expense coverage complications may arise (Bauder et al., 2017). Sophisticated rules and strict bureaucracy are considerable challenges for healthcare organizations.


Bauder, R., Khoshgoftaar, T. M., & Seliya, N. (2017). A survey on the state of healthcare upcoding fraud analysis and detection. Health Services & Outcomes Research Methodology, 17(1), 31–55. Web.

Kliethermes, M. A. (2017). Understanding health care billing basics. Pharmacy Today, 23(7), 57–68. Web.

Lee, S. J., Venkataraman, S., Heim, G. R., Roth, A. V., & Chilingerian, J. (2020). Impact of the value-based purchasing program on hospital operations outcomes: An econometric analysis. Journal of Operations Management, 66(1–2), 151–175. Web.

Peregrin, T. (2021). Managing HIPAA compliance includes legal and ethical considerations. Journal of the Academy of Nutrition and Dietetics, 121(2). Web.

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StudyKraken. 2022. "Coding and Billing Procedures in Healthcare." August 24, 2022.


StudyKraken. (2022) 'Coding and Billing Procedures in Healthcare'. 24 August.

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