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Download an in-depth summary of the Coding Precision for Enhanced Revenue Generation



Coding Precision for Enhanced Revenue Generation


Out of all the RCM processes, medical coding is the most vital step to streamline the finances of a healthcare organization. Accurate medical coding can increase healthcare providers' revenue by 20% while lowering the denial rate below 5%.  

Coding errors cost around $36 million annually to the healthcare industry. These figures are just the revenue impact on the healthcare providers. The effect of medical coding errors on RCM operation is even worse. In this whitepaper, our expert coders have used their 15+ years of experience to give you an in-depth understanding of medical coding and its impact on the end-to-end revenue cycle.    

This whitepaper highlights the problems healthcare providers experience due to medical coding errors and tips to overcome these challenges. Through a comprehensive exploration of industry best practices, technology-driven solutions, and real-world success stories, readers will understand how precise coding can revolutionize the revenue cycle management process.

Introduction to Medical Coding in Healthcare RCM

In modern healthcare, quality care goes hand in hand with finances. For all the healthcare providers willing to optimize their RCM process, mastering medical coding is the most important RCM step. Medical coders analyze and evaluate medical data post-patient discharge. They connect the provided healthcare services with codes related to procedure, professional & facility, fees, and diagnosis.  

The Significance of Medical Coding

When a patient connects with a healthcare provider for a particular treatment or service, providers note the services or visits in the medical records. Healthcare providers explain why procedures, services, or materials got supplied to the patient.

Role of Medical Coding in Revenue Cycle Management

Medical coding is not just about entering the codes related to services or diagnoses. It is a bridge between healthcare services offered to patients and reimbursement providers. Proper documentation plays a crucial role in reimbursements. According to American Health Information Management Association (AHIMA), accurate documentation is the key to accurate medical billing and coding.

"Do not code if it's not documented."  

Types of Medical Codes and Their Importance

In the complex revenue cycle management world, medical codes bridge all the clinical documentation, procedures, diagnosis, and reimbursements. Let's explore the three main types of medical codes and their importance.

ICD-10 Coding

ICD (International Classification of Diseases) captures patient conditions. These codes help healthcare providers to covey the diagnosed disease. The 10th edition of ICD codes, i.e., ICD-10 codes, facilitates accurate medical record-keeping and alignment of diagnoses with appropriate treatment plans and interventions.

CPT Coding

CPT (Current Procedural Terminology) codes are used to capture medical procedures and services rendered to the patient. These codes connect clinical actions to financial transactions. CPT codes help healthcare providers to communicate the complexity and scope of the care delivered efficiently.

HCC Coding

HCC (Hierarchical Condition Category) coding is the most important process for insurance payers and healthcare providers. HCC codes capture patients' chronic conditions and allot them with RAF scores. Accurate HCC coding directly influences reimbursement levels.

E/M Coding

Evaluation and Management (E/M) codes encompass a range of services where healthcare providers assess, diagnose, and manage patient conditions. These codes reflect the cognitive work involved in patient care, considering factors such as the history of the present illness, the level of medical decision-making, and the extent of examination performed.

Challenges in Medical Coding for RCM

Like all other revenue cycle management processes, medical coding has its own challenges that severely impact the organization's overall functioning.  

Documentation Deficiencies

Error-free medical coding depends on accurate documentation. Incomplete documentation or missing information can be a hurdle in coding. Incomplete or vague documentation fails to capture the full scope of patient encounters. Document deficiencies happen when physicians prioritize patient care over detailed documentation.

Skilled Staff Shortage and Training Issues

The shortage of (AAPC, AHIMA) certified medical coders is the biggest challenge for healthcare providers. A recent survey by American Hospital Association showed that 18% of the medical coding position remain vacant due to a lack of qualifications. Certified medical coders deeply understand coding guidelines, terminology, and regulations.

Evolving Coding Guidelines and Updates

The medical coding guidelines keep evolving. Constant changes in codes and modifiers are a challenge for healthcare organizations. Regulatory bodies like the American Medical Association (AMA) and the Centers for Medicare & Medicaid Services (CMS) keep updating coding rules and guidelines to reflect advancements in medical practices.

Strategies for Effective Medical Coding in RCM

Medical coding is the most important process of revenue cycle management. Whether the healthcare providers have high AR or denial rates or if they are not receiving reimbursement on time, the impact of increased coding quality can quickly surge practice collections. Medical coding helps to identify errors in clinical documentation and increases the clean claim ratio for an organization. Here are the top strategies healthcare providers can implement to increase coding efficiency.

Conclusion and key takeaways

Medical coding is complex, and healthcare providers need a team of skilled coders to benchmark the KPI results. Managing a team is always challenging as it demands lots of technological and intracultural development. Healthcare providers must consider outsourcing medical coding services to the best RCM company in the industry, like Plutus Health. Outsourcing medical coding will help to reduce coding errors, improve coding errors, and ultimately reduce coding denials. Plutus Health has a team of 1000+ specialty-based coders skilled to deliver all the results expected. We have worked for 800+ providers, bringing their denial rates below 5%. If you wish to know more about medical coding services by Plutus Health, you can connect with our experts.


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