Diagnosis coding is also called as medical coding. It is carried out by medical coders. These coders follow medical coding guidelines to assign medical information such as medical procedures, equipment, medications etc. with alphanumerical codes. The following are the reasons that diagnosis coding or medical coding is important:

• Universal Codes
Majority of the alphanumerical codes fall into categories such as ICD, CPD, HCPC etc. These categories are based on the different types of medical procedures and equipment’s present and thus, the codes are assigned accordingly. These codes are universally consistent. That is, at any part of the world, a particular code would denote the same medical procedure, medication, equipment etc. This would make it convenient for patients to secure healthcare at any part of the world without the risk of wrong diagnosis. Since the codes remain the same across the globe, the patient's ailment will be handled effectively once the medical codes are interpreted.

• Filing Claims
All the clinical information on a medical claim will be filled in the form of medical codes. The clinical information filled onto a claim includes patient medical diagnosis, medical equipment used, medications provided and such. When the claim is submitted to the medical insurance provider, they acknowledge the coded information to conclude the payment coverage for the patient's medical bill accordingly. This decision is made based on the patient's medical insurance plan. For a medical claim to be accepted upon submission, all the medical codes must be accurate and specific. The codes must adhere to the strict medical coding guidelines to be accepted.

• Documenting Patient Medical Information
Medical codes make it easier to store patient medical details. These documents can be stored online as well as offline. Sorting this data is easier and healthcare providers can track the trends in ailments affecting different age groups, geographies etc. Since these codes are universal, the healthcare system all over the world can utilise patient medical data to conclude current healthcare trends and equip it for future medical cases. Storing medical histories and using this information is made easier due to medical codes.

• Bettering Patient Satisfaction
Medical coding contributes in ensuring a hassle-free medical assistance for the patients. If the medical codes are coded accurately, the patient will not be charged extra for any procedure. The chances for fraud decreases and also, the patient can get treatment anywhere across the globe because of the universal medical codes. This will better the patient's experience with the healthcare provider.

Medical codes help enhance communication between different healthcare providers. It plays a major role in the medical billing process since without it, claims would be denied and storage of patient health information would turn challenging. To ensure accurate medical coding, healthcare providers choose to outsource their physician billing services to third party vendors. These third-party physician billing services ensure that the medical codes are specific and adhere to the stringent classification system. Ultimately, outsourcing can help healthcare providers in maximising their revenues through better revenue cycle management.