Medical Coding Market Size, Share, Growth, Trends, and Global Industry Analysis: By Classification Type (International Classification of Diseases (ICD), Current Procedural Terminology (CPT), Healthcare Common Procedure Coding System (HCPCS), Diagnosis Related Groups (DRG), Others), By Mode of Delivery (Web-Based, Cloud-Based, On-Premises), By End User (Hospitals and Healthcare Providers, Diagnostic Centres, Insurance Companies, Others) and Region Forecast 2020-2031

Medical Coding Market size was valued at US$ 19,200 million in 2024 and is expected to reach US$ 35,800 million by 2031, growing at a significant CAGR of 9.4% from 2025-2031. Moreover, the U.S. market is projected to grow significantly, reaching an estimated value of US$ 11,600 million by 2031. The market refers to the segment of the healthcare industry focused on the transformation of medical diagnoses, procedures, equipment, and healthcare services into standardized alphanumeric codes. These codes are critical for accurate billing, insurance claims processing, compliance with regulations, and maintaining healthcare records. The market encompasses solutions, services, software platforms, and trained professionals that ensure the integrity and efficiency of healthcare data management.

The market is witnessing steady growth, driven by the increasing digitization of healthcare, rising demand for accurate healthcare data for insurance and reimbursement purposes, and stringent regulatory requirements worldwide. The adoption of advanced coding systems such as ICD-10 and CPT, along with the integration of AI and automation tools, is improving coding accuracy and reducing operational inefficiencies. Growing healthcare expenditure, expanding patient volumes, and the need for efficient revenue cycle management are further fueling market demand.

Facts & Figures  

• ICD-11, released by WHO in 2022, includes over 17,000 codes and is used by more than 35 countries for health data reporting.
• All 194 WHO member states are required to use the latest ICD version to ensure consistent global health statistics.
• ICD-11 supports digital integration with EHRs and is available in multiple languages to improve interoperability and accessibility worldwide.

Key Developments  

• In February 2025, the World Health Organization (WHO) released the latest update to the International Classification of Diseases, 11th Revision (ICD-11). This update reflects new medical knowledge and coding best practices, ensuring the system remains relevant and accurate for global health reporting and clinical documentation.
• In May 2025, the adoption of cloud-based billing solutions in the medical coding industry continued to grow, offering healthcare providers enhanced flexibility, security, and seamless integration with electronic health records. These platforms are increasingly favored for their scalability and efficiency in managing coding and billing processes.

Medical Coding Market Segmentation

Based on the classification type 

• International Classification of Diseases (ICD)
• Current Procedural Terminology (CPT)
• Healthcare Common Procedure Coding System (HCPCS)
• Diagnosis Related Groups (DRG)
• Others

Among the classification types, the International Classification of Diseases (ICD) segment is anticipated to lead the medical coding market, driven by its global acceptance and mandatory use in healthcare systems. ICD codes serve as the universal language for recording diagnoses and medical conditions, making them critical for patient records, insurance claims, and compliance with regulatory standards. The transition to updated versions such as ICD-10 and the upcoming ICD-11 has further expanded its importance, offering greater specificity and improved data analytics. Increasing patient volumes, growing chronic disease cases, and the emphasis on accurate reporting strengthen ICD’s dominant market position.

Based on the mode of delivery 

• Web-Based
• Cloud-Based
• On-Premises

Among the modes of delivery, the cloud-based segment is anticipated to lead the market due to its scalability, cost-efficiency, and flexibility. Healthcare organizations are increasingly adopting cloud platforms to streamline coding operations, access real-time updates, and integrate seamlessly with electronic health records across multiple locations. Cloud-based systems also enhance data security and compliance while reducing the need for heavy on-site infrastructure. The growing trend of remote work and outsourced coding services has further boosted the demand for cloud deployment. Its ability to support AI-driven tools and analytics makes it the most preferred and fastest-growing delivery model.

Based on the end user 

• Hospitals and Healthcare Providers
• Diagnostic Centers
• Insurance Companies
• Others

Among the end users, hospitals and healthcare providers are expected to dominate the medical coding market, as they handle the largest volume of patient data and medical procedures. Hospitals require extensive coding for inpatient and outpatient services, diagnostic tests, surgeries, and treatments to ensure accurate billing and compliance with insurance and regulatory standards. The increasing adoption of electronic health records and advanced coding systems within hospitals further strengthens their market position. Additionally, the rising number of hospital admissions, chronic disease cases, and the need for efficient revenue cycle management make this segment the primary driver of demand for medical coding solutions.