Your Medical Billing & Coding Salary Guide

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Medical billing and coding is a stable, in-demand job that can be perfect for those who enjoy working in an office setting with the potential to work remotely. As a medical coder, you’ll play a vital role in healthcare, ensuring patients are billed accurately and insurance claims are filed appropriately. But what does it take to become a medical coder? What’s the salary like? Learn everything you need to know in our comprehensive guide to becoming a medical billing and coding professional. You’ll learn about topics like

What is medical coding?

Medical coding is the process of translating procedures, diagnoses, prognoses, medical services, and medical equipment into codes using numbers and letters. These codes are used by medical professionals, healthcare administrators, and insurance companies to properly process invoices and accurately bill the appropriate parties for medical costs.

Because the job involves specialized knowledge, such as an understanding of different codes and how to use them, most medical coders need some formal education in the field. Usually, this education can be completed as a career diploma or certificate within a little more than a year. Once you’re working in the field, you may also be required to pursue continuing education on a regular basis to stay up to date with the newest codes, policies, and medical procedures.

While you don’t necessarily need experience in the medical field before becoming a medical coder, many coding professionals start out as nurses, medical office assistants or managers, or in other healthcare jobs before transitioning to coding. If you don’t have experience in the medical field before working as a medical coder, earning your certification can help you stand out when applying for jobs.

Becoming a medical coder can be a rewarding job for those who want to work in healthcare but don’t want to work directly with patients. Medical coders can find jobs in doctors’ offices, hospitals, healthcare systems, insurance companies, and more! Since the day-to-day job of medical coders is more administrative than clinical, many in the field also work from home on flexible schedules.

Medical coding vs. medical billing

Often used interchangeably, medical coding and medical billing are very different jobs. While medical coding involves translating information from medical records into code, medical billing uses those codes to properly and accurately create invoices and bills for insurance companies and patients. Together, both jobs play a vital role in ensuring that the revenue side of healthcare runs smoothly!

If you’re trying to decide which career is right for you, consider a few factors like

• Whether or not you want to work with patients. Medical coders rarely, if ever, work with patients, while billers will interact with patients for billing and insurance reimbursement purposes.
• How much math plays a part in your work. Medical billers use math much more than a coder would since they’re tasked with calculating billing statements and other financial documents.
• Certification. There are different types of certifications for billers versus coders, as well as certifications that cover both specialties.

You can also narrow down your career choice by doing a quick job search for both positions. Are there more medical coding jobs in your area? Or more remote work options? How many medical billing jobs are available near you and what kind of environment would you be required to work in? Understanding the job outlook in your area can help you make a clear decision about which role might be the best fit for you.

Watch Jaime Nguyen, MD, MS, MPH and Director of Allied Health at Penn Foster, explain why now is a great time to become a healthcare professional. Plus, she uncovers some of the top healthcare jobs for 2022!

Medical billing and coding salary

Medical billing and coding professionals can make a competitive starting salary! Salary for medical coders and billers can vary based on education, the state they work in, where they work, experience, and certification.

The average medical billing and coding salary is around $47,200 per year.

What are the highest paying states for medical billers and coders?

The salary for medical billing and coding professionals can vary by state. This is due to the demand for medical coders, the overall economy of the state, and other factors such as the number of jobs available in the field. The five states that offer the highest salary for medical billers and coders include

1. District of Columbia. Washington, D.C. has the highest medical billing and coding salary nationwide. Medical billing and coding specialists can earn an average of $70,843 per year.
2. Massachusetts. In Massachusetts, the average medical billing and coding salary is $67,260.
3. Hawaii. Medical coders and billers in Hawaii can earn an average yearly salary of $66,902.
4. Maryland. Most medical coders in Maryland can earn an average salary of $66,310 per year.
5. California. In California, medical coders earn an average salary of $66,224 per year.

What type of healthcare facility pays the most?

Your salary as a medical billing and coding professional is often determined by the size and type of your employer. Larger employers will often be able to offer higher wages and more competitive benefits over smaller employers. The highest paying employers of medical coders include

1. Healthcare systems. Health systems are organizations that are comprised of institutions, people, and services that provide a wide variety of care to patients in the community. Generally, this would include hospitals, doctors’ offices, clinics, and laboratories all operating under the umbrella of a larger organization. Within healthcare systems, medical coders have more options for jobs and can find jobs that pay well. In 2021, coders working for health systems earned an average yearly salary of $57,862.
2. Hospitals. Medical coders will be kept busy in a hospital setting and paid accordingly! Whether coding or working on billing for inpatient or outpatient procedures, medical billers and coders can earn a competitive salary. The average salary for medical coders working in hospitals in 2021 was $55,437!
3. Large group practices. In large group practices, several physicians own part of the organization and share an office. With a few different doctors seeing patients, there’s plenty of work for skilled medical coders and medical billers. In a larger practice, medical coders can expect to earn around $54,967 per year.
4. Small and medium group practices. Smaller and medium-sized practices may not bring in as much revenue as larger practices and hospitals and may have less need for skilled medical coders. With that in mind, smaller practices offer smaller salaries with the average medical coder earning around $48,641 per year.

Learn how Silvia Moreno used her online Medical Billing and Coding diploma to make a career change from receptionist in an optometrist office to a claims processor.

How to increase your salary as a medical coder or biller

While average starting salaries vary for medical coders, there will almost always be opportunities to increase how much you earn! Most often, you can qualify for raises two ways: experience and certification.

Experience is the most common way to earn a higher salary in any industry! The longer you stay with a particular employer, the more you’ll know about how they run their business, different policies, and how to best use your medical billing and coding skills on the job. By proving that you’re dedicated to your work and to learning and growing in the field, you can increase your salary over time. And, if you decide to look for a coding position elsewhere, the experience you’ve gained in your previous coding jobs could help you stand out from other applicants and qualify for a higher starting pay.

Certification can also be a great path towards earning more money as a medical coder. While certification isn’t required for an entry-level job as a medical billing and coding specialist, it can show potential employers that you really do have the necessary skills to be successful on the job. The most common certification for medical coders is the Certified Billing and Coding Specialist (CBCS) exam offered by the National Healthcareer Association (NHA).

After becoming certified, you have the potential to earn significantly more than someone who doesn’t have a credential on their resume.

Average medical billing and coding salaries by state

Medical billing and coding specialists can earn the most if they live and work in Washington, D.C., bringing in an average of $70,843 per year, or $34.06 per hour.

Medical Billing and Coding Salaries by State

Medical coder salary by education

While a degree may not be necessary to start an entry-level job as a medical coder, the more education you have, the more you’re likely to earn. In fact, those coders with a bachelor’s degree can earn almost 10% more per hour than those with no college degree. Medical coders with a master’s degree can earn as much as 305% more per hour than those without a degree or higher education.

Besides being able to earn a higher salary, having an educational background in a related field can increase your chances of standing out when you’re applying for medical billing and coding jobs.

Medical Billing and Coding Salaries by Education Level

Average medical billing and coding salary by workplace size

Another factor in determining your potential salary as a medical coder is the size of the practice or business you work for. Larger practices or medical facilities are likely to pay more for experienced coders than smaller practices due to the revenue they bring and the increased workload you may be expected to take on.

Medical coders who work for larger healthcare systems can expect to earn more than someone working for a small doctor’s office with an average annual salary of $57,862.

Medical Billing and Coding Salaries by Practice Size

Medical billing and coding salary by experience

As with any profession, the more experience you have in the field, the more money you’re likely to earn. For medical billing and coding professionals, salary levels increase about $5,000 for every four years of work experience you have on average.

Medical Billing and Coding Salaries by Years of Experience

How to become a medical coder

To become a medical coder, you first need a high school diploma or GED. These are necessary for taking the next steps toward a rewarding, in-demand career in healthcare. From there, you’ll want to pursue a diploma or certificate program in medical billing and coding.

Note: A high school diploma increases your potential to earn more income*. If you haven’t earned yours yet, it’s never too late! Learn more about our self-paced, online high school diploma.

Medical billing and coding involves understanding medical terminology, diagnoses, diseases, and the proper codes used to bill insurance companies and patients. While you’re not expected to memorize every medical code and term, knowing how to properly use them and look them up is vital to being successful on the job.

Besides technical skills like understanding and translating codes, a successful medical biller or coder needs to have soft skills such as being detail-oriented, adaptable, and personable.

According to Jaime Nguyen, MD, MS, MPH and Director of Allied Health Programs for Penn Foster, in order to be a great medical biller and coder “you have to really enjoy detail and like communicating with people. And like communicating with different parties, and really wanting to help people. If I’m a patient and I’m ill, one of the most stressful pieces of [the process] is understanding the financial piece of it. How much is my insurance going to cover, how much am I going to owe for this medical bill?

A great medical biller or coder should be able to explain what is covered by the patient’s insurance and what the patient is responsible for.”

Further, a great medical biller or coder should love learning and be willing to be a lifelong learner! Says Nguyen, “Many of the code sets get updated every single year. You have to be up to date on them and the regulations and willing to learn them. Otherwise, you may not be billing for medical services correctly and be either underbilling or overbilling.”

In addition to training and education, earning industry-recognized certifications can be beneficial to your career. While certification isn’t required for the job, “I can’t imagine a potential employer hiring someone without certification,” Nguyen said.

Medical billing and coding requirements

The requirements for becoming a medical biller and coding include both soft skills and career-specific technical skills. Soft skills are things that every employer looks for and can be transferrable to any career or job.

Hard skills, or job-specific skills, are those things you need to know for the specific role you’re working in.

Soft skills for medical coders

Successful medical billers and coders should have the following soft skills to be successful on the job:

• Communication skills. Medical coders need to have strong verbal and written communication skills in order to effectively do their job. On a regular basis, coders will need to communicate with physicians, medical providers, patients, and insurance company representatives in order to ensure codes and bills are processed properly and accurately.
• Customer service skills. While medical coders don’t necessarily work directly with patients on a regular basis, there may be times when you’ll need to speak with patients or insurance company representatives to discuss billing and procedures. Strong customer service skills can make the process much easier!
• Detail-orientation. When working with complicated coding procedures, being detail-oriented can help you keep everything in order and process codes and bills correctly.
• Adaptability. Being able to adapt to different environments and working processes is important when you’re a medical coder. It’s especially vital because codes are updated each year and successful coders need to be willing to adapt to these new codes as soon as they can.

Industry-specific skills for medical coders

Medical coders need a certain set of skills to do their jobs effectively. These skills include

• Knowledge of medical terminology and body systems. In order to properly code medical procedures and diagnoses, you need a strong understanding of medical terminology and the body systems that doctors and medical professionals will be referring to.
• Understanding of codes and medical coding. Medical billers and coders need to know ICD and CPT codes in order to properly do their jobs.
• Understanding of medical office procedures. Whether or not you work in a medical office or work from home, you’ll need to know basic medical office procedures such as using certain office software, scheduling software, and more.
• Knowledge of electronic medical records and how to use them. Electronic medical records are used to record patient histories and have a shareable record that physicians and other healthcare providers can reference. As a medical coder, you’ll need to understand how to access and update electronic medical records with billing information.

Is medical coding hard?

Yes, medical coding can be hard. With the amount of knowledge you need to work in an entry-level position, learning how to become a medical coder can seem daunting. And the learning doesn’t stop when you finish your diploma or training program. With codes and policies being updated every year, you’ll have to be prepared to relearn some codes and learn new ones regularly.

But if you’re interested in working in the healthcare industry, the hard work is worth it! Skilled, certified medical coders are in-demand so learning what you need to start a career in the field can be difficult, but in the end it’s something that can help you find the job you love.

Learn how working, single mom Amanda Boucher went back to school for her Medical Billing and Coding Career Diploma.

How long does it take to become a medical coder?

It can take anywhere from several months to almost two years to become a medical coder. The length of time it takes you to prepare for this career can depend on several factors, including where you decide to earn your diploma and whether or not you are planning to become certified.

Generally, taking an online medical billing and coding training program can provide the quickest route to becoming a professional medical coder. With a program like Penn Foster’s Medical Billing and Coding Career Diploma, you can work through your online coding classes at your own pace, around your schedule. That means, if you have the time, you can work on your studies every day and complete your program faster than the average 12-16 months it usually takes students.

After completing your program, you can go right into preparing for and taking your certification exam! Once you add your diploma and certification to your resume, you’re ready to start applying for jobs.

How to get into medical coding

The best way to get your foot in the door as a medical coder is to get the right education, earn certification, and find an entry-level healthcare job. Many medical coders may not even start their careers by working in medical billing and coding; they get their start by working as a medical office assistant, transcriptionist, or another position. From there, with the right training and experience, they can move into a coding role.

For those who do begin their career in a medical coding role, they’ll often find themselves in very entry-level positions.

“To enter the field, most people have to start at entry-level and that usually means a medical office,” advises Jaime Nguyen.

“Being a medical biller and coder in a medical office is different from working in a hospital. Often, the natural trajectory when starting a career in the field for a medical biller or coder is in a medical office and then going into a larger healthcare system or hospital.”

Do medical coders work from home?

More than 50% of full-time medical coders currently work from home, with only 17% reporting that they worked completely on-site in an office or hospital setting. Since most of the work of a medical coder is administrative and doesn’t involve directly working with patients, there’s a lot of flexibility in where you work.

However, a medical coder new to the field may not have the option to work from home – at first. Generally, unless you are hired as a remote worker, it may take time and experience for you to be able to work remotely if your employer offers that option. But because of the use of electronic health records and advances in technology, the number of coders working from home can only be expected to grow.

“With experience, many medical billers and coders are able to work remotely, which attracts a lot of people to the field. With electronic health records, we now have secure access to patient’s medical records and are able to work from home. In fact, many billers and coders do work remotely in different settings, including hospitals and outsourcing companies,” Nguyen said. “But it all comes down to gaining enough work experience to have the privilege and responsibility of working from home.”

Is there math in medical coding?

There is some math involved in medical coding, but not nearly as much as other healthcare roles. Most of the math you’ll do is focused on calculating billing invoices and updating medical records with billing information.

While there’s software that can calculate bill totals, there are occasions when you’ll need to manually calculate or verify billed amounts, payments, and what an insurance company will cover for a procedure.

Medical billing and coding certification

While we’ve mentioned that certification isn’t absolutely necessary to work as a medical billing and coding professional, many employers require it for entry-level jobs in the field. Besides meeting employer requirements for jobs, being a certified coder or biller can help you earn more money and advance your career as a medical billing and coding specialist.

There are several different certifications you can pursue to strengthen your resume and show employers you know your coding and billing. These certifications include

• Certified Billing & Coding Specialist (CBCS) exam offered by the National Healthcareer Association (NHA). The CBCS exam is an industry-recognized certification. To sit for the exam, candidates must have a high school diploma and have completed a training program in medical billing, medical coding, or medical records management.
• Certified Professional Coder (CPC) exam offered by AAPC (American Academy of Professional Coders). The CPC exam is another industry-recognized credential that can be beneficial to starting a medical coding career. The most popular coding certification, the CPC exam is right for coders who are interested in working in an outpatient setting. To sit for the exam, it’s recommended that you have at least two years of experience in the field, have taken an applicable training course, and you’re required to be a member of the AAPC.
• Coding Associate (CCA) exams offered by the AHIMA (American Health Information Management Association). The CCA exam is perfect for those who want an entry-level credential. The exam tests for coding competency in a hospital or physician’s office. To sit for the exam, you need to have a high school diploma or equivalent and apply to sit for the test through AHIMA’s website at least 6 weeks in advance of your preferred testing date. Although not required, AHIMA recommends you have at least 6 months of on-the-job experience and have completed a recognized training program.

To sit for any certification exam, you’ll generally need to pay for the test and, depending on your level of skill and knowledge, any practice tests you need to prepare. Most exams range in cost from $200-400. For those who complete Penn Foster’s Medical Billing and Coding Training, the cost of the CBCS exam and practice exam is included in the cost of your tuition.

How to decide with coding certification is right for you

With several certification exams to choose from, you may be unsure which coding certification is the best one to take to reach your career goals. The best way to narrow down your options is to consider the pros and cons of each exam. You’ll want to consider things like

• Exam cost. Certification exams in any industry aren’t cheap. When deciding which exam is best for you, make sure you know how much each exam costs. Most range from $200 to $400 dollars for each exam. If you fail an exam, you’ll need to pay the same amount to retake it.
• Exam requirements. Do you meet the requirements for the exam you want to take? Some require you to have only a high school diploma while others require documented work experience, formal education in medical coding, or membership in the organization that offers the exam.
• Your career goals. Different exams can suit different career goals. Determine where you see your medical coding career path going. Do you want to work for physician’s offices, or would you prefer to work in a hospital or larger healthcare system?

Is medical billing and coding right for you?

Medical billing and coding is an in-demand career that’s expected to grow over the next decade. If you’re looking for a career in the medical field that is focused more on administrative duties and less on direct patient care, becoming a medical coder could be the perfect job for you.

Medical coding is a great fit for people who

• Like administrative work. Medical coding is an administrative role that involves paperwork, following office procedures, and other administrative tasks.
• Want to work in an office. If you want to work in an office setting, one in which you aren’t expected to be on your feet constantly, becoming a medical coding professional could be a great fit. Medical coders will often work at a desk for their entire shift.
• Want to work a steady schedule. Unlike other healthcare jobs that require more flexibility in scheduling, most medical coders can be confident they’ll work a steady 9-5 schedule. This schedule could be ideal for those who have a family to care for or just want to know what their work schedule will look like each week.
• Want the ability to work from home. Not all healthcare jobs will offer the opportunity to work remotely. However, as a medical coder, you might be able to work from home. Generally, once you’ve gained experience and your employer approves, you can begin working from home!
• Want to avoid patient care. If you want a healthcare job that allows you to help others without having to see patients, handle blood or other lab samples, or complete clinical duties, becoming a medical coder could be the right path for you. As a medical coder, you’ll deal with patients only in the context of billing and payments and many coders don’t have to interact with patients at all.

Become a certified medical coder with Penn Foster

If you know medical billing and coding is the right fit for you, the next step is to get the training you need to prepare for a career as a certified medical coder or biller. With Penn Foster’s online Medical Billing and Coding Training Program, you can learn the basics of medical terminology, electronic health records, and ICD and CPT codes on your schedule, from home. You’ll also prepare for the CBCS exam to become certified! To learn more about becoming a medical coder or to get started on your career journey today, reach out to our expert Admissions Specialists at 1-888-427-6500!

*Source: U.S. Bureau of Labor Statistics