Clinical Coding Theory Questions and
Answers | Latest Version | 2025/2026 |
Correct & Verified
What is the primary purpose of ICD coding in healthcare?
✔✔To standardize diagnosis reporting for statistical, billing, and clinical purposes
What does CPT coding primarily describe?
✔✔The procedures and services performed by healthcare providers
What is the difference between ICD-10-CM and ICD-10-PCS?
✔✔ICD-10-CM codes diagnoses, while ICD-10-PCS codes inpatient procedures
Why is accurate clinical documentation critical for coding?
✔✔It ensures proper reimbursement, legal compliance, and quality reporting
What does HCPCS Level II coding describe?
✔✔Supplies, medications, durable medical equipment, and services not in CPT
1
,What is the function of a primary diagnosis code?
✔✔It identifies the main reason a patient received care during a visit
Why are secondary diagnosis codes important?
✔✔They provide additional context for comorbidities, complications, and severity
What is the role of a DRG in hospital billing?
✔✔It classifies inpatient cases for Medicare reimbursement based on diagnosis and procedures
What is a “modifier” in CPT coding?
✔✔A code that provides additional information about a procedure without changing the main
code
What is a complication vs. a comorbidity in coding terms?
✔✔A complication arises during hospitalization; a comorbidity exists prior and affects care
Why must coders understand medical terminology?
✔✔It ensures accurate translation of clinical documentation into proper codes
2
,What is the difference between “excludes1” and “excludes2” notes in ICD-10?
✔✔Excludes1 means the conditions cannot be coded together; excludes2 allows coding together
if relevant
Why is sequencing of codes important in claims submission?
✔✔Proper sequencing determines payer responsibility and accurate reimbursement
What is the significance of upcoding in medical billing?
✔✔It is illegal and involves coding a higher level service than provided, leading to fraud
What is downcoding, and why can it occur?
✔✔Coding a lower-level service than provided, often due to payer denial or documentation
issues
What is the purpose of a Z code in ICD-10-CM?
✔✔To report factors influencing health status and contact with health services
3
, Why must coders be aware of payer-specific rules?
✔✔Because insurance carriers may have unique documentation and coding requirements for
reimbursement
What is the difference between outpatient and inpatient coding?
✔✔Outpatient coding focuses on evaluation, management, and procedures, while inpatient
coding includes principal and secondary diagnoses for hospital stays
What does E/M coding represent?
✔✔Evaluation and management services performed by providers for patient visits
Why are CPT codes organized by sections?
✔✔To categorize procedures and services for easy reference and accurate billing
What is the importance of a principal procedure code in inpatient coding?
✔✔It identifies the main procedure performed that consumed the most resources during a
hospital stay
4
Answers | Latest Version | 2025/2026 |
Correct & Verified
What is the primary purpose of ICD coding in healthcare?
✔✔To standardize diagnosis reporting for statistical, billing, and clinical purposes
What does CPT coding primarily describe?
✔✔The procedures and services performed by healthcare providers
What is the difference between ICD-10-CM and ICD-10-PCS?
✔✔ICD-10-CM codes diagnoses, while ICD-10-PCS codes inpatient procedures
Why is accurate clinical documentation critical for coding?
✔✔It ensures proper reimbursement, legal compliance, and quality reporting
What does HCPCS Level II coding describe?
✔✔Supplies, medications, durable medical equipment, and services not in CPT
1
,What is the function of a primary diagnosis code?
✔✔It identifies the main reason a patient received care during a visit
Why are secondary diagnosis codes important?
✔✔They provide additional context for comorbidities, complications, and severity
What is the role of a DRG in hospital billing?
✔✔It classifies inpatient cases for Medicare reimbursement based on diagnosis and procedures
What is a “modifier” in CPT coding?
✔✔A code that provides additional information about a procedure without changing the main
code
What is a complication vs. a comorbidity in coding terms?
✔✔A complication arises during hospitalization; a comorbidity exists prior and affects care
Why must coders understand medical terminology?
✔✔It ensures accurate translation of clinical documentation into proper codes
2
,What is the difference between “excludes1” and “excludes2” notes in ICD-10?
✔✔Excludes1 means the conditions cannot be coded together; excludes2 allows coding together
if relevant
Why is sequencing of codes important in claims submission?
✔✔Proper sequencing determines payer responsibility and accurate reimbursement
What is the significance of upcoding in medical billing?
✔✔It is illegal and involves coding a higher level service than provided, leading to fraud
What is downcoding, and why can it occur?
✔✔Coding a lower-level service than provided, often due to payer denial or documentation
issues
What is the purpose of a Z code in ICD-10-CM?
✔✔To report factors influencing health status and contact with health services
3
, Why must coders be aware of payer-specific rules?
✔✔Because insurance carriers may have unique documentation and coding requirements for
reimbursement
What is the difference between outpatient and inpatient coding?
✔✔Outpatient coding focuses on evaluation, management, and procedures, while inpatient
coding includes principal and secondary diagnoses for hospital stays
What does E/M coding represent?
✔✔Evaluation and management services performed by providers for patient visits
Why are CPT codes organized by sections?
✔✔To categorize procedures and services for easy reference and accurate billing
What is the importance of a principal procedure code in inpatient coding?
✔✔It identifies the main procedure performed that consumed the most resources during a
hospital stay
4
