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6 Types of Medical Coding Classification Systems

This guide explores six medical coding classification systems, empowering healthcare facilities to optimize efficiency and enhance patient outcomes.

In the bustling world of healthcare, where up to 40% of healthcare workers struggle to find essential medical data, the role of medical coding becomes crucial. 

Acting as the silent hero, medical coding organizes records, ensures smooth operations, improves patient care, simplifies billing, and can even anticipate outbreaks. To harness the full potential of medical coding, healthcare facilities must grasp the types of medical coding systems available.

This guide explores six classification systems, empowering healthcare facilities to optimize efficiency and enhance patient outcomes.

What are Medical Coding Systems?

Medical coding systems are tools used to translate descriptions of diagnoses and procedures into standardized codes. These codes are a universal language for communicating medical information across healthcare facilities, insurers, and other stakeholders. They help ensure accurate billing, streamline administrative processes, and support public health planning. 

Outsourcing medical coding has become a common practice among healthcare facilities seeking to reduce operational costs and improve coding accuracy. By delegating this task to specialized companies, healthcare providers can focus more on patient care while benefiting from the expertise of certified medical coders.

6 Different Types of Medical Coding Systems 

In the modern healthcare system, six types of medical coding systems are used to categorize diagnoses, procedures, and services.

The ICD-10-CM (International Classification of Diseases, Tenth Revision, Clinical Modification) is a system that healthcare providers use to categorize and assign codes to diagnoses, symptoms, and procedures conducted during hospital care.

1. ICD-10-CM

It helps healthcare providers accurately document and communicate diagnoses, supports medical billing and reimbursement processes, and aids in tracking and analyzing health data for research and public health purposes.

Elements of ICD-10-CM Codes

ICD-10-CM has a total of 71,932 codes. It consists of 3 to 7 characters and has the following code structure:

  • Character 1 is a letter (except U).
  • Character 2 is a number.
  • Characters 3 to 7 are either letters or numbers.
  • Decimal can be used after the first three characters.
  • The placeholder “x” can be used.
  • Letters are not case-sensitive.

How are ICD-10-CM Codes Used?

Generally, healthcare professionals like physicians, coders, and nurses rely on ICD-10-CM to store and retrieve diagnostic information and compile national mortality and morbidity data. These codes offer detailed information that manual systems may not efficiently document.

2. CPT

CPT (Current Procedural Terminology) is a standardized set of codes essential for billing purposes and is used alongside diagnostic codes like ICD-9-CM or ICD-10-CM during electronic medical billing. 

Elements of CPT Codes

CPT codes consist of three categories:

  • Category 1 (Procedures and Contemporary Medical Practices) Category 1 includes commonly performed medical procedures and modern practices. These are five-digit numeric codes approved by the FDA and well-supported by evidence.
  • Category 2 (Clinical Laboratory Services and Emerging Technologies) The Category 2 CPT code set consists of additional tracking codes used to measure performance and collect data on the quality of care. 
  • Category 3 (Services and Procedures) – Unlike Category 1 codes, Category 3 codes identify services that might not be commonly performed, lack FDA approval, or lack proven clinical effectiveness. These codes are reserved for services or procedures involved in ongoing or planned research. 

How are CPT Codes Used?

Healthcare providers can use CPT codes to accurately bill insurance companies, government programs, and patients for services provided while offering a standardized method for documenting procedures and services during patient encounters. Additionally, healthcare facilities can also use these codes to track and measure the quality of care provided to patients.


HCPCS (Healthcare Common Procedure Coding System) codes are used in the healthcare system to identify and bill various products, supplies, and services not included in other coding systems like CPT. These codes are crucial for reimbursement strategies and ensure patient access to new technologies and treatments. 

Elements of HCPCS Codes

HCPCS is categorized into two levels:

  • HCPCS Level I These are CPT codes that primarily cover procedures and services rendered by physicians and other healthcare providers in various clinical settings. They’re widely used for billing purposes, reimbursement, and statistical analysis in healthcare.
  • HCPCS Level II – These codes utilize alphanumeric codes and typically cover products, supplies, and services beyond those found in CPT. 

How are HCPCS Codes Used?

In today’s healthcare system, HCPCS codes are crucial for navigating reimbursement complexities and ensuring patient access. They identify specific products for billing, classify healthcare items for data collection, and help determine reimbursement rates, especially for durable medical equipment. 


SNOMED CT (Systematized Nomenclature of Medicine – Clinical Terms) is a standardized vocabulary healthcare providers use to exchange electronic health information worldwide. Managed by SNOMED International, it contains over 360,000 medical concepts, including diseases, procedures, and anatomy. 

Elements of SNOMED CT Codes

SNOMED CT codes consist of various components: 

  • Concepts – These concepts range from health conditions to biological entities. 
  • Descriptions – These descriptions link words to concepts, offering different ways to describe the same idea. 
  • Relationships – SNOMED CT establishes connections between related concepts, providing formal definitions and attributes for each.
  • Reference Sets – Reference sets are versatile tools for customization, such as language preferences. 

How are SNOMED CT Codes Used?

Healthcare providers can rely on SNOMED CT to record patient interactions precisely, improve communication among medical professionals, aid in making clinical decisions, and ensure that various healthcare systems and databases can work together seamlessly.

5. ICD-11

ICD-11 is the global standard for recording, analyzing, and systematically comparing mortality and morbidity data. This latest revision results from extensive collaboration among healthcare experts worldwide, ensuring its usability by clinicians, statisticians, and IT specialists. 

Elements of ICD-11 Codes

ICD-11 features about 17,000 distinct codes and more than 120,000 terms available. Some of ICD-11’s components include:

  • Digital Health Compatibility – ICD-11 easily works with digital health systems, making data recording simple and compatible with other terminology systems. 
  • Application Programming Interface (API) – These tools let users access ICD-11 programmatically, allowing search, coding, and output functions online and offline.
  • Translation Tool – This feature in ICD-11 helps translate the classification into different languages, promoting collaboration and accessibility across various language groups.

How are ICD-11 Codes Used?

With ICD-11 codes, healthcare facilities can harness technological advancements to organize health data into over 17,000 categories. They have a multilingual design and user-friendly interface, helping healthcare workers accurately record diagnoses, procedures, and billing processes. 

6. ICD-10-PCS

ICD-10-PCS (International Classification of Diseases, 10th Edition, Procedure Coding System) is crucial for accurate health information management, especially with the widespread use of electronic health records. It replaced the ninth revision in 1993 and provides a detailed method for recording various health interventions in inpatient care settings. 

Elements of ICD-10-PCS Codes

ICD-10-PCS codes consist of the following structure:

  • The codes range from 3 to 7 characters, including numbers and letters.
  • Character 1 indicates the medical practice area, like surgery or measurement.
  • The following characters specify details such as the body system, operation, body part, approach, and device used.
  • Characters 1 to 3 are found in the ICD manual for guidance.
  • Character 7 provides additional details.

How are ICD-10-PCS Codes Used?

ICD-10-PCS codes are used in various healthcare settings for tasks like reporting, tracking health data, and managing billing. They’re essential for preserving care quality, aiding data-driven decisions, and securing financial stability in today’s healthcare setting. 

Medical Coding System FAQs

What are medical codes used for?

Medical codes are used to classify diseases, injuries, and medical procedures for various purposes, such as billing, insurance claims, and statistical analysis. They help streamline healthcare operations and ensure accurate documentation of patient care.

What is the difference between CPT and ICD codes?

CPT codes describe medical procedures and services performed by healthcare providers, mainly for billing and reimbursement purposes. On the other hand, ICD codes classify diagnoses and diseases, helping to identify the reason for a patient’s visit and guide treatment decisions.

Why is it important to know medical coding?

Healthcare facilities need medical coders who understand coding well to ensure accurate recording and billing of medical services, reducing errors and increasing revenue. Proficient coding also helps facilities comply with regulations, avoiding penalties and legal problems.

What are the benefits of medical coding and billing programs?

Medical coding and billing programs benefit healthcare facilities by ensuring accurate documentation of medical services and timely reimbursement from insurance companies. They streamline administrative tasks, reduce errors in billing, and improve overall financial efficiency.

Trust VISAYA KPO for Seamless Medical Coding Solutions

In today’s healthcare landscape, maintaining accurate medical records is essential for ensuring effective patient care, operational efficiency, and compliance with regulations.  Medical coding helps achieve this by translating medical information into standardized codes.

At VISAYA KPO, we specialize in providing comprehensive health information management services tailored to the unique needs of healthcare organizations. With expertise in medical coding practices and a commitment to the Filipino value of ‘malasakit,’ we empower healthcare providers to optimize their operations, enhance patient care outcomes, and ensure compliance with industry standards.
Connect with us today to discover how VISAYA KPO’s seamless and reliable solutions can elevate the standards of healthcare delivery for your organization.

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