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The Importance of Accurate Diagnostic Coding

To understand why accurate diagnostic coding is important, it is a good idea to look at what it actually is. When a patient visits a healthcare provider presenting with a range of symptoms, the doctor will typically evaluate the symptoms based on a series of questions and answers. It might be necessary to perform a physical examination or to order specific tests to confirm the suspected diagnosis.

Once the doctor has a diagnosis, he or she will enter this on the patient file. This will then be translated into code by a medical coder. The diagnostic code is important because it is used by insurance companies to explain why certain treatments or procedures were carried out.

If a coder uses an incorrect diagnosis code, the insurance company might reject or deny the claim as it will appear as though the wrong services were provided, or that specific services were provided for no reason.

Consequences of Coding Errors

Staff at insurance companies and government agencies such as Medicare or Medicaid will assess claims forms sent to them by medical providers. Their job is to ensure that the right treatments were provided by the facility and that the patient is covered for these treatments. As mentioned above, they will look at the initial diagnosis code to determine the individual’s illness, disease, or injury before checking to see what treatments or services were provided by the facility.

If the treatments provided are not typically provided for the type of condition the patient is deemed to have, the payer will send the claim back to be amended and resubmitted, or the claim might be denied. This will have an impact on the medical facility as it will delay reimbursements and could end up negatively affecting cashflow.

Diagnostic coding errors can also have an impact on patient care. For example, if an incorrect diagnostic code is used on a file, the patient might not receive the correct care at another facility. For example, entering an incorrect character on a code could mean that a patient is given an MRI scan on the wrong arm.

There are other consequences of inaccurate diagnostic coding. Whether intentional or not, coding errors can result in fines and federal penalties. If it is deemed that the medical facility is submitting false claims, a monetary penalty might be applied.

How to Ensure the Correct Code is Used

According to the folk at Find-A-Code.com, there are easy ways to find the right code for the information in a medical record. Coders can use the relevant coding book that contains lists in alphabetical and tabular forms. There are also online databases that allow for quick and easy diagnostic code lookup. It is important to check the coding instructions too. For example, additional characters are often required to denote parts of the body or a specific stage of illness or disease.

Note that the first three characters of ICD 10 codes relate to the general category of the illness. It is followed by two characters that denote the subclassification to further explain the location, cause severity, or type of disease or illness. The last character is the extension which describes the type of encounter (i.e., the initial visit or follow-up visit). The first character of an ICD code is always an alpha, the second is always numeric, and the following 3-7 characters can be alpha or numeric.


Accurate diagnostic coding is especially important in terms of patient care, funding for the medical facility, and to prevent violations of The False Claims Act (FCA). It is therefore necessary that coders are aware of how to find the right code using coding books or online databases.

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