Medical Coding– What Is It And The place Are Its Points?

Reimbursement is a big a part of how hospital techniques generate income from payers (insurance coverage firms), and is what we name ‘the backend’ of healthcare. Medical coding, although much less seen to sufferers, helps physicians observe and justify therapies and prognosis for his or her sufferers; it’s the spine of how the healthcare system capabilities financially and contributes to methods in income cycle administration (RCM), a vital part to hospital success that’s equally on par to affected person care and outcomes on the frontend. As healthcare insurance policies evolve, RCM methods and medical coding techniques alter in parallel, and right here we check out the fundamentals of medical coding in addition to a couple of key downside areas and white areas. 

1) What’s medical coding? 

a) RCM- Income cycle administration; Steps embody:

i) Documentation

ii) Affected person details- demographics 

iii) Eligibility of insurance coverage claims verify (pre-authorization)

iv) Submitting of claims

b) Medical Coding Classifications:

i) ICD-11: latest classifications of prognosis codes equivalent to illnesses, irregular findings, signs, and many others, which might be used for shorthand medical billing 

ii) ICD-10-CM: medical modifications of the earlier model of coding system, specifically, the ICD-10, and extra used for outpatient functions because of extra outlined granularity of severity of illness and situations.

iii) ICD-10-PCS: a extra granular & detailed model of ICD-10, targeted on procedures, gear in inpatient settings.

iv) Present Procedural Terminology (CPT codes): procedural medical coding that’s extra surgically/medically targeted with its major objective to standardize communication for administrative makes use of. 

2) Issues within the space

a) Accuracy of coding- Lack of assets to file medical coding for every affected person has develop into a bigger downside, uncovered by conditions such because the COVID-19 pandemic inflicting medical overloads; Healthcare facilities depend upon workers ranges to deal with uptick in medical coding, and with suppliers and skilled workers stretched skinny at instances, accuracy of coding is among the first issues to fall by way of, inflicting declare denial and lapses in administrative capabilities of hospital income cycles.

b) Bloated documentation (aka “Word Bloat”) – happens when physicians notes embody redundant info, both because of strain of productiveness/copy pasting info, uncertainty about coding necessities, or danger mitigation/defensive note-taking; these could cause a myriad of issues surrounding inefficient coding evaluations, obfuscation of inaccurate medical findings, and result in poor affected person outcomes.

3) What could be accomplished? 

a) AI-ML leveraged error reduction- we’re excited to see firms that tackle aiding physicians in cleansing up affected person notes or leveraging expertise to make sure accuracy of assigning medical coding.

b) Automating RCM cycle- Whereas firms akin to Alaffia Well being (disclosure: Tau portfolio) have tackled the preauthorization a part of the pipeline, a lot must be accomplished within the house of seamless coordination between payer enrollment and collections division of the cycle; we at Tau are additionally very a lot thinking about full stack options of RCM for hospital techniques.

Word from Amit Garg: Major creator for this text is Sharon Huang. Initially printed on “Knowledge Pushed Investor,” am comfortable to syndicate on different platforms. I’m a Cofounder and Managing Accomplice of Tau Ventures with 20 years in Silicon Valley throughout corporates, personal startup, and VC funds. These are purposely quick articles targeted on sensible insights (I name it gl;dr — good size; did learn). Lots of my writings are at and I’d be stoked in the event that they get folks sufficient in a subject to discover in additional depth. If this text had helpful insights for you remark away and/or give a like on the article and on the Tau Ventures’ LinkedIn web page, with due thanks for supporting our work. All opinions expressed listed here are my very own.