Large hospitals employ medical coders who do what is known as inpatient medical coding. They must accurately code procedures, diagnoses, and treatments patients receive in order to submit that information to health insurance companies so the hospitals they work for are properly paid for the services they provide. When a person first enters the field of medical coding they will often start out as an outpatient medical coder. This just means that the medical coding they handle is for people who do not stay overnight in the hospital or who are seen at an outpatient clinic. Most people who seek a position as an inpatient medical coder must learn the skill over time through both classroom and on the job training because of the more advanced nature of the work.

Over the years as medicine has advanced and more and more patients are seen on an outcare basis there has been a decline in the need for medical coding for inpatients. For example gall bladder surgery used to require and 3 day stay in the hospital but now most people are sent home shortly after the procedure is completed. Because they did not stay overnight at the hospital their case is assigned to an outpatient medical coder. On the other hand open heart surgery requires inpatient medical coding.

The major difference between inpatient and outpatient medical coding is the complexity of the situations that they must code. Someone who needs stitches in their hand is a lot less coding work than someone who has multiple traumatic injuries sustained in a car wreck. Because there is so much more coding work to do, and it must all be accurate, for a patient with inpatient care needs the inpatient medical coding expert will have noticeably more expertise than their outpatient counterparts. It should be noted that hospitals employ both outpatient and inpatient medical coding workers because many hospitals visits do not require an overnight visit.