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Pros and Cons of Outsourced Healthcare Coding


Pros of Outsourced Healthcare Coding

Healthcare coding is a daunting task that requires a comprehensive knowledge on ICD (International Classification of Diseases), HCPCS (Healthcare Common Procedure Coding System) and CPT (Current Procedure Terminology). CPT codes fall into three categories which include Category I, Category II, and Category III.


  • Category I: Category I codes are five digits and feature descriptors which correspond to a certain services or procedure. These codes range from 00100-99499. An example of a Category I code is 47350 which stands for “management of liver hemorrhage; simple suture of liver wound or injury.”
  • Category II: Category II codes are alphanumeric tracking codes which are optional and used to measure execution. An example of a Category II code that stands for postpartum care visit is 0503F.
  • Category III: Category III codes are intended for new and ever-evolving technology, services, and procedures. These codes help collect data and assess new services and procedures. 0123T is a Category III code that stands for the fistulization of sclera for glaucoma through ciliary body.

Healthcare providers are seeing more audits and red tape to cross when it comes to coding. Having someone handle the coding in-house, whilst having to stay on top of all the rules, and also having other responsibilities, is time consuming and allows for more mistakes to be made which can result in rejections. Deciding to outsource your coding alleviates these burdens and ensures that your coding is being done by an educated professional. Using a professional company to solely focus on your coding will result in shorter wait times for reimbursement. This will all give you peace of mind knowing that your coding is being handled by educated coding professionals. Using an outsourced company means that you are only paying for work that is done instead of paying an employee at salary rate.

Cons of Outsourced Healthcare Coding

So, what are the cons involved in the outsourcing of coding? For one, outsourcing can be risky due to the many different specialty types in healthcare. When outsourcing coding, making sure the company you choose understands your organization’s needs and state specific requirements is paramount. Choosing a company that isn’t diverse in the many different specialties of healthcare can result in rejections. Monitoring outsourced coding can be a bit more difficult then in-house coding. It will require you to communicate with someone that is not located within your own practice.

The cost of using an outsourced company is also something to consider. Outsourced companies typically charge a percentage of collections rather than a flat fee. Considering the size of your practice, the cost of outsourcing vs in-house, and the amount of time saved will help you determine whether outsourcing is cost-effective for your organization.

Contact us today to learn more about pros and cons of outsourced healthcare coding