Background Paper

From Diagnosis to Payment: The Dynamics of Coding Systems for Hospital, Physician, and Other Health Services
January 25, 2002


Karen Matherlee


This background paper reviews the two principal coding systems used to describe health services in the United States: ICD-9-CM and HCPCS, a combination of CPT-4 and national and local codes. It probes the relationships of these coding systems to payment policy, administrative simplification under HIPAA, and other concerns. The paper also addresses four coding issues: governance of CPT; adoption of ICD-10-CM; the appropriateness, accuracy, and responsiveness to change of the codes themselves; and the degree of documentation needed to monitor health services and determine payment.

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