Code Ahead: Key Issues Shaping Clinical Terminology and Classification

by Margaret M. Foley, PhD, RHIA, CCS, and Gail S. Garrett, RHIT

Coding is changing quickly. HIM professionals can keep a step ahead by following eight issues shaping clinical terminology and classification.

Coded data go farther and do more than ever before, making it imperative that HIM professionals stay abreast of many rapid changes. One of the biggest changes is the expansion of coding from its traditional role of translating narrative clinical text into diagnosis and procedure codes. Coding must now meet an emerging need to capture healthcare data in a standard format that has universal meaning and can be applied both at the individual and aggregate levels.

With this expansion come additional new responsibilities, such as entry of health information into a database and the need to understand how the quality and accuracy of the data are represented in code sets. HIM professionals are in a leadership position for the collection and reporting of healthcare data. They must plan now for transformational changes in clinical terminology and classification systems.

To this end, AHIMA’s volunteer Clinical Terminology and Classification Practice Council identified key issues in clinical terminology and classification. They are:

  • Expanded uses of coded data
  • Compliance and reimbursement
  • State of traditional coding systems
  • Interoperability of the electronic health record (EHR) and the role of clinical terminologies
  • State of mapping
  • Computer-assisted coding
  • Work force
  • Education

These issues are summarized below.

Expanded Uses of Coded Data

While many individuals working within the healthcare industry only recognize coded data as the source for determining reimbursement, HIM professionals have always understood the myriad important uses of coded data. Historically, some uses of coded data included quality management activities, case-mix management, planning, marketing, administrative, and research activities.

In the last decade the uses of coded data have expanded to include pay-for-performance initiatives, patient safety monitoring, the development of clinical decision support tools, and public health surveillance. HIM practitioners must continue to monitor the many uses of coded data and must provide information of the highest quality for all reported information, not just for reimbursement-related data.

Compliance and Reimbursement

The healthcare field is highly regulated by a complex statutory and regulatory scheme. Coded data play an important role in ensuring appropriate reimbursement for healthcare services rendered for institutional or provider claims. This importance continues to increase as prospective payments have evolved to include other treatment settings, such as inpatient psychiatric facilities. HIM professionals are uniquely qualified to interpret and implement policies that govern reimbursement. They can provide leadership within organizations to ensure that clinical documentation is accurate and appropriate to support the diagnoses and procedures selected for reimbursement.

Healthcare fraud is a major weakness in the US healthcare system, and it affects the ability to provide quality care and enhance patient safety. It is important to consider the impact classification and terminology assignment has on both data quality and compliance to federal and state rules and regulations. In order to address the issue of healthcare fraud, a robust data quality and compliance program is of the utmost importance in the respective areas of classifications and terminologies.

State of Traditional Classification Systems

An understanding of CPT, ICD-9-CM, ICD-10-CM, ICD-10-PCS, HCPCS, and evaluation and management guidelines is essential to the coding body of knowledge. Whenever code sets and classification systems undergo revisions, the work done by HIM professionals must change. Workflow and procedures developed for paper records are no longer relevant when electronic records are used. As more terminologies and code sets are employed in the EHR, version control and software updates become a challenge and can add overhead costs.


CPT provides a reporting mechanism for physician and hospital outpatient services. Two new categories were developed to extend its function. Category II codes (performance measurement) facilitate data collection of services and test results that are agreed upon as contributing to positive health outcomes and quality patient care. They are considered a set of optional tracking codes for performance measurement. Category III codes (emerging technology) facilitate data collection and assessment for new technology, services, and procedures in widespread use or in the FDA approval process.

Evaluation and Management Guidelines
Hospital Use

Since the inception of the Medicare hospital outpatient prospective payment system in August 2000, hospitals have reported clinic and emergency department visits using the same CPT codes as physicians for reporting health services. However, these evaluation and management (E/M) codes were designed to describe professional services, not the services provided by the facility. In response, the Centers for Medicare and Medicaid Services (CMS) has allowed facilities to develop unique internal guidelines to report clinic and emergency department services by mapping them to the levels of effort represented by the existing CPT codes. As a result, each hospital has its own E/M method, although hospitals within the same health system may have the same or similar methods.

The American Hospital Association and AHIMA convened a panel of experts to develop standardized E/M code definitions and guidelines for use by facilities. CMS feels that the guidelines require additional testing to provide hospitals with the least burdensome standard for achieving uniformity and to yield more accurate, meaningful information for appropriate payments. CMS will ultimately make proposed standardized guidelines available through its Web site and allow ample time for public comment, education on use of the guidelines, and required system modifications.

Physician Use

In 1994 CMS released documentation guidelines that divided each E/M code into key and contributory components. They are commonly referred to as the 1995 Documentation Guidelines. However, the guidelines were problematic for some specialties, and in 1997 CMS published a revision. Different problems were identified with the 1997 set. Presently, CMS allows use of either the 1995 or 1997 guidelines. Thorough understanding of both sets is essential for correct assignment and validation of E/M codes.

In 2002 CMS turned the E/M guideline project over to the American Medical Association, which works through its CPT editorial panel. The panel is revising the E/M code descriptors and hopes to enhance the functionality and utility of the codes so that separate documentation guidelines are not necessary for accurate code assignment.


ICD-9-CM is used in the United States to code and classify diagnoses for inpatient and outpatient records, other healthcare encounters, and inpatient procedures. Although diagnostic and procedural coding for statistics and research were the original functions of the system, ICD-9-CM has also been used for reimbursement since 1983. Updates to ICD-9-CM are made each October 1. Regulatory provisions also allow updates every April 1, although this provision has not yet been used.

ICD-10-CM and ICD-10-PCS

ICD-10-CM is the US clinical modification of the World Health Organization’s International Classification of Diseases, 10th revision. ICD-10-CM was developed as a replacement for volumes 1 and 2 of ICD-9-CM for diagnosis coding. ICD-10-PCS (procedure coding system) was developed to replace ICD-9-CM volume 3, used by hospitals to report inpatient procedures.

Legislation calling for the implementation of ICD-10-CM and -PCS in the United States by October 1, 2009, is currently being considered. The change will affect every healthcare provider, payer, and user of healthcare data. In addition to the logic behind software systems such as encoders, editors, compliance systems, and decision support systems, all other software that uses coded data must be revised to accommodate the change. Educating users of coded data will pose another major challenge.


CMS maintains Healthcare Common Procedure Coding System (HCPCS) Level II codes to identify products, supplies, and services not in the CPT code set maintained by the American Medical Association. The codes are used for billing items such as durable medical equipment, prosthetics, orthotics, supplies, and ambulance services. They are alphanumeric codes with a single alphabetic letter followed by four numeric digits. The national codes are published annually and become effective at the beginning of each year. Temporary HCPCS Level II codes are implemented quarterly.

Medicare’s voluntary program to report evidence-based, consensus quality measures-an important step toward supporting higher quality physician care-uses a dedicated set of HCPCS G-codes. These codes will supplement the claims data doctors currently submit to CMS with clinical data. The clinical data will then be used to measure the quality of services provided to Medicare patients.

Interoperability and the Role of Clinical Terminologies

For healthcare systems to be interoperable-to exchange data in a uniform format that can be integrated automatically-they require medical terms that are universally understood. Standardized clinical terminologies supply that framework.

There are a number of initiatives driving the adoption of standardized, interoperable EHRs. The president has called for the availability of EHRs for all US citizens by 2014, and he created the Office of the National Coordinator for Health Information Technology. The Consolidated Health Informatics project brought together federal healthcare agencies to review clinical terminologies and recommend their use in standardizing many clinical domains. The agencies then adopt these standards into their EHR projects.

Outside the federal government, health information exchange initiatives are working to network patient data so that complete and accurate information is available for treatment wherever and whenever the patient requires it. Improved data exchange can help identify bioterrorism and public health threats, facilitate outcome and quality improvement research, and provide ongoing information for clinical decision support. Work is under way to create regional health information organizations (RHIOs) and a nationwide health information network to serve as the framework for exchanging data. RHIOs will require policies, procedures, business rules, technical standards, and implementation guides for the accurate and secure exchange of data. HIM professionals must be involved in the development of RHIOs and other health information exchange projects.

Other initiatives include the EHR Collaborative, a group of private-sector organizations moving to rapidly adopt information standards for healthcare. The Health Information Technology Standards Panel, working under a contract from the Department of Health and Human Services, has brought together US standards development organizations and other stakeholders to develop, prototype, and evaluate a harmonization process for achieving a widely accepted and useful set of health IT standards that support interoperability among healthcare software applications, particularly EHRs.

Messaging standards, content standards, and terminologies in EHRs today include the Continuity of Care Record, the Health Level Seven (HL7) messaging standard, the HL7 clinical data architecture, the HL7 EHR functional model, LOINC, SNOMED CT, and the National Council for Prescription Drug Programs standards.

Standardized clinical terminologies are the data structures for the EHR, promoting data quality and enabling data to be uniformly understood by all internal and external users. HIM professionals must continue to learn about EHRs and the clinical terminologies that will be used to standardize the data since they have the clinical and coding expertise necessary to help adopt these standards in their organizations.

State of Mapping

Mapping is the linking of content from one terminology or classification to another. It is a key element in maximizing the benefits of an EHR. As hospitals strive to maximize productivity, employing the clinical data being entered through automated coding practices will avoid duplication of data capture and increase productivity. Providing interoperability through mapping functions will also speed up the widespread use of SNOMED CT.

Mapping SNOMED CT to US administrative code sets such as ICD-9-CM and CPT will provide a link from physician documentation to the billing process. Maps developed between terminologies and classifications are designed differently based upon the intended use of the mapped data. For example, the current SNOMED CT to ICD-9-CM map can be used for epidemiological purposes. However, in order to use a SNOMED CT to ICD-9-CM map for reimbursement purposes, several coding rule-based instructions would need to be incorporated.

Computer-Assisted Coding

Computer-assisted coding (CAC) is the use of computer software to automatically generate medical codes from clinical documentation. An increasing amount of routine clinical coding is done by machine, saving time and human resources for more complex coding and data analysis.

CAC affects management of the coding process, although the applications do not fully automate the coding process because human review is still necessary for final code assignment. CAC increases coder productivity and makes the process more efficient. It has a significant impact on coding workflow and the responsibilities of the coding staff, as the coding professional shifts from a production role to one of an expert editor. Clinical coding tasks will no longer include time-consuming, repetitive code assignment, instead concentrating on tasks involving critical thinking, such as interpretation and analysis of documentation or aggregate data.

Work Force Issues

Increased recognition of coding’s importance and the need for trained, qualified, credentialed coders continues to fuel the demand for coders in excess of the current supply. The shortage of qualified coders has led to an exploration of staffing alternatives such as remote coding, permanent outsourcing, and interim staffing.

The industry is addressing recruitment and retention challenges by adopting technology that allows coding professionals to work remotely, accessing medical records in electronic format. Since this is becoming a more common practice, AHIMA and its members must be involved to facilitate successful implementation of remote coding.

HIM outsourcing can be either a permanent or interim solution for staffing shortages. Outsourcing is successful when communication is frequent and bidirectional, participants show flexibility, the outsource provider has expertise, and the client is a responsible stakeholder. A sound contract delineating responsibilities is essential. It is equally important for the client and the outsourcing provider to have adequate controls in place to ensure data quality.


There will be a great demand for educational programs to assist HIM professionals in their transition to the many new roles described above. HIM professionals will need to conduct gap analyses of their existing skills to determine the education they require to stay abreast of the many changes within the coding, clinical terminology, and classification systems. Educational offerings will need to take a variety of formats, such as new curriculum for new HIM professionals, in-person seminars, Web-based sessions, and published articles.

Healthcare data presented in a format that has universal meaning and can be applied at the individual level and in the aggregate healthcare delivery system are valuable assets. HIM professionals are in a leadership position for the collection and reporting of healthcare data because they understand the translation and categorization of data, regardless of the code sets or software applications. They are valuable because of their knowledge of the clinical care process and its relationship to wellness and disease. They are integral for the description of the time and effort of the care process in a few succinct codes that are machine readable for efficient automated storage and retrieval to meet multiple needs. Further, HIM professionals understand the structure and format of maintaining a legal health record that supports quality care.

HIM professionals must prepare for transformational changes in clinical terminology and classification systems. Implementing EHR systems that rely on code sets as a data resource for patient care and all other potential uses of the data that will support the individual, the community, and the healthcare delivery system is very much a part of the HIM domain.


Delena C. Bidwell, MA, RHIA, CCP, CPUR
Sue Bowman, RHIA, CCS
Bonnie S. Cassidy, MPA, RHIA, FAHIMA
Cheryl A. D’Amato, RHIT
Kathy Giannangelo, RHIA, CCS
Gail L. Graham, RHIA
Matthew J. Greene, RHIA, CCS
Candace L. Hall, RHIT
Mary A. Hanken, PhD, RHIA, CHP
Laurie Johnson, MS, RHIA
Tammy J. Mathewson, RHIA, CCS-P
Kathryn M. Perron, RHIA
Rita Scichilone, MHSA, RHIA, CCS, CCS-P, CHC
Mary Stanfill, RHIA, CCS, CCS-P
Susan Wallace, MEd, RHIA, CCS
Ann M. Zeisset, RHIT, CCS-P, CCS


Julie Beinborn, RHIA
Rhonda Butler, CCS
Kathy Johnson, RHIA
Cesar M. Limjoco, MD, CCS
Melanie S. Loucks
Bernice C. Ulrich, RHIA

Margaret M. Foley ( is clinical associate professor in the HIM department at Temple University. Gail S. Garrett (Gail.Garrett@ is assistant vice president, coding compliance, HCA. They served as co-chairs of AHIMA’s Clinical Terminology and Classification Practice Council.

[Editor's note: This article is a condensed version of "Key Issues Shaping Clinical Terminology and Classification" developed by the 2005 Clinical Terminology and Classification Practice Council of AHIMA. The full article is available in the FORE Library: HIM Body of Knowledge.]

Article citation:
Foley, Margaret M.; Garrett, Gail S.. "Code Ahead: Key Issues Shaping Clinical Terminology and Classification ." Journal of AHIMA 77, no.7 (July/August 2006): 24-30.