What Are the Key Medical Coding Terms and Vocabulary to Know?

by | Published on May 24, 2022 | Medical Coding

Key Medical Coding Terms and Vocabulary
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On-time reimbursement from insurers for any medical specialties mainly requires the services of skilled medical coders and billing specialists. They must be knowledgeable in the medical coding terminology that includes the names of conditions and illnesses, treatments and medications or procedures and vocabulary related to medical codes. An experienced medical billing and coding company in the U.S., our team is up to date with the changing coding standards. They are familiar with the coding and billing terminologies and vocabulary, diseases and their diagnosis, and treatment options.

Check out some medical coding vocabulary & key terms:


Current Procedural Terminology (CPT) is a medical code set to report medical, surgical, and diagnostic procedures and services. These codes are also used for administrative management purposes such as claims processing and developing guidelines for medical care review.

The CPT code set is divided into three Categories. Category I codes that describe medical procedures, technologies and services have descriptors that correspond to a procedure or service. Category II includes supplemental codes for performance management, and Category III is temporary alphanumeric codes for new and developing technology, procedures and services.


ICD or International Classification of Disease codes help classify diseases, injuries, and causes of death. These codes ensure proper treatment and correct charges for any medical services provided.

The ICD code set is maintained by the World Health Organization (WHO) and distributed in countries across the globe. In the U.S., ICD codes are overseen by the Centers for Medicare and Medicaid Services (CMS) and the National Center for Health Statistics (NCHS).The latest version of the ICD, ICD-11 came into effect on 1st January 2022.

When the healthcare provider submits claims to an insurance company for reimbursement, each service is described by a CPT code, which is matched to an ICD code. If the two codes don’t align each other, the company may deny payment.


Maintained by CMS, Healthcare Common Procedure Coding System (HCPCS) is a collection of standardized codes that represent medical procedures, supplies, products and services. The codes are used to facilitate the processing of health insurance claims by Medicare and other insurers.

HCPCS is divided into two subsystems, Level I and Level II. Level I HCPCS includes Current Procedural Terminology codes (CPT) for hospital providers, which consists of five numeric digits. Level II HCPCS codes include a letter followed by four numeric digits. These codes are used to report non-physician services like ambulance rides, wheelchairs, walkers, durable medical equipment, and other medical services. HCPCS codes include A-codes, C-codes, G-codes, J-codes, and Q-codes.

Evaluation and Management Codes

Evaluation and Management, or E&M codes are used to describe the assessment of a patient’s health and the management of their care. Reviewed on a periodic basis by the AMA, Evaluation and management codes are a part of the CPT-4 system. E&M codes range from 99201 – 99499.


Modifiers are two-character codes that are added to a CPT® or HCPCS Level II code to report any necessary changes in the definition of the procedure. CPT codes have numeric modifiers, while HCPCS codes have alphanumeric modifiers. Modifiers are added at the end of a code with a hyphen. It provides additional information about the medical procedure, service, or supply involved without changing the meaning of the code.

Listen to our podcast –
CPT Code Modifiers and How They are Used

Upcoding and downcoding

Upcoding is coding or reporting for a higher-level service or procedure than what is actually done, to increase the reimbursement rate. At the same time, downcoding is using a code that is of less dollar value than the actual procedure performed.

Also Read –
Bundling And Downcoding Issues In Dental Billing And How To Address Them


When used right, Z codes can improve claims accuracy and specificity, and help to establish medical necessity for treatment. These codes, found in Chapter 21: Factors Influencing Health Status and Contact with Health Services (Z00-Z99) of the ICD-10-CM code book, can be used in any healthcare setting. Z-codes describe circumstances outside of injury or disease that cause a patient to visit a health professional.

The Z codes (Z00-Z99) provide descriptions for a situation wherein the symptoms a patient displays do not point to a specific disorder but still warrant treatment.


When an insurer denies payment for any treatment provided, providers can appeal by objecting to the decision made and requesting to re-consider the claim.

Billing specialists at reliable medical coding companies can ensure that your practice has only fewer accounts receivable and unresolved dental claims.

Read our blog on –
Handling Dental Claim Denials or Rejections – How to Appeal

AR (Accounts Receivable)

In medical billing, accounts receivable refers to the outstanding reimbursement owed to providers for issued treatments and services, whether the financial responsibility falls to the patient or their insurance company.

AR management is a collection of processes such as identifying denied/unpaid claims, re-filing the corrected claims, minimizing AR days, and eliminating aged AR.

Advance Beneficiary Notice (ABN)

ABN isa notice given by a doctor or a supplier to Original Medicare beneficiaries to convey that Medicare is not likely to provide coverage in a specific case. It is used to get reimbursement for the services provided to the beneficiary of the Original Medicare Plan.

Explanation of Benefits (EOB)

An Explanation of Benefit (EOB) refers to a statement generated by a health insurance provider describing what costs they will cover for the medical care received by the patient. The EOB is generated when the provider submits a claim for the services rendered.

Medical coding and billing specialists play a key role in evaluating medical records and Charge Tickets to ensure completeness, accuracy, and compliance with the right ICD and CPT codes as well as correct modifiers. They should have good knowledge in medical terminologies, anatomy and physiology details, and state and federal Medicare reimbursement guidelines. Professional medical billing and coding companies providing medical coding services will make sure to provide their staff regular training in all regards.

Julie Clements

Julie Clements, OSI’s Vice President of Operations, brings a diverse background in healthcare staffing and a robust six-year tenure as the Director of Sales and Marketing at a prestigious 4-star resort.

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