As the complexity of the medical coding process increases with the transition to ICD-10 and annual CPT code updates, there is a need for revenue cycle management solutions that will promote accurate billing. The demand for healthcare services is growing with the aging population, concomitantly driving the demand for medical coding services. According to the U.S. Bureau of Labor Statistics, the demand for medical coding is expected to grow by 15 percent in the coming years. However, recent reports say that low coding quality is a major issue that healthcare providers have to deal with.
According to a report published by USInsure Quotes in March 2017, 66 percent of the respondents in a 2016 HIM Benchmark survey said quality was the biggest issue they faced with their coding vendors, up from 34 percent of respondents who identified quality as their main issue the previous year.
Poor coding practices can affect revenue cycle management in many ways:
- Increased accounts receivable days
- Higher denial rates
- Increasing days not final billed
- Inadequate revenue capture due to undercoding
The USInsure Quotes report is about how Sacramento-based Sutter Health addressed its coding related revenue cycle issues through outsourcing to a Health Information Management (HIM) service provider. Here is a brief summary of how outsourcing helped Sutter Health strengthen its revenue cycle, decrease the rate of denied claims due to coding errors and protect its bottom line:
- Improved coder retention: Sutter Health strengthened its coding workforce by developing its own internal coding school. They are also planning to offer coding training for the outpatient, ED and inpatient service lines.
- Revamped department models: As a departure from its practice of outsourcing medical billing and coding to several vendors, Sutter Health chose a managed solution involving HIM oversight with ongoing quality assurance and education. This reduced coding backlog and enhanced coding quality. The healthcare provider now has one enterprise-wide coding department led by a director to streamline employed coder onboarding, training and oversight of outsourced coders. A survey showed that such a reorganized staffing model can help hospitals achieve a 3 percent average increase in coding accuracy or a $6 million increase in annual revenue.
- Regular performance audits: By conducting regular performance audits with the help of the medical coding outsourcing company, Sutter Health set up a dedicated auditing team to monitor and improve coding quality on monthly basis. This helped identify inefficiencies on a more detailed level so that timely action could be taken. According to a survey conducted by the service provider, such ongoing performance audits can help hospitals achieve a return on investment of up to 10 to 1, increase annual revenue by $2 million, and reduce under-coding by 42 percent.
- Ongoing coding education: This is something that all reliable medical coding companies have in place. By developing individual education programs for each of its coders, Sutter reinforced quality and improved employee retention. Ongoing coding education benefits both the health system and individual employees.
Sutter’s experience shows that partnering with an experienced medical coding outsourcing service provider is the best way for medical practices and hospitals to improve revenue cycle management. With a skilled team of AAPC certified coders up to date in ICD-10, CPT and HCPCS coding, a reliable outsourcing company can ensure error-free coding practices to maximize reimbursement and minimize denials.
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