How Medical Coding Shape the Modern Revenue Cycle?

Medical coding makes a more definite contribution to modern revenue cycles than ever before. The value-based care model of today’s healthcare system has significantly brought this change to healthcare. The model upgrades medical reimbursement standards from quantity to quality. Patient outcomes and their experiences have been given more importance. Therefore, proper diagnosis is the utmost necessity in today’s healthcare sphere. And it is only possible with the right medical coding practices.

What seems minor in the beginning may give rise to a big problem. Therefore, medical coders, who strictly adhere to value-based care models, tend to avoid any expensive setbacks. This empowers the need for and influence of appropriate medical coding and expertise. Otherwise, the wave of distortion will eventually impact your revenue cycles.

In this blog, we will essentially look at how medical coding services are transforming healthcare. And how the quality of RCM improves by medical coding specifically.

The Need for Medical Coding in Today’s Healthcare Sphere

You know, what’s behind the increased dependency on medical coding for improved RCM? Well, the Affordable Care Act (ACA) is one factor aligning the motive of value-based care. It has substantially uplifted medical coding to a great extent.

Delveinsight’s 2022 report estimates the medical coding market at USD 16.23 billion. With a CAGR of 10.91%, it is anticipated to reach USD 30.17 billion by 2028. These statistics are fueled by the increasing demand for coding services. The medical world is looking toward medical coding for the following reasons, mainly:

• Global rise in chronic diseases and hospitalizations
• Increase in insurance claim fraud and misinterpretations
• More demand for optimized hospital billing processes
• Increased dependence on the adoption rate of modern healthcare solutions

No other reason is more powerful than the above two for increased demand for medical coding. Healthcare practices need a universal language for documenting diagnosis. Extensive alphanumeric medical coding systems serve the purpose. Overall, the report estimates the expansion of medical billing and coding until 2028.

Impact of Medical Coding Services on the Revenue Cycle

Medical coding impacts the revenue cycle of your medical practice in multiple ways. Let’s see how!

• Claim submission accuracy
• Fewer claim denials
• Fast claim processing
• Better reimbursements
• Higher revenue return

Claim Submission Accuracy

Accurate claim submission is the key to successful medical billing and coding. Otherwise, the clearinghouse will deny the claim in no time. Therefore, the use of the right medical codes is an ideal practice to avoid any issues. Once their claim is submitted and it’s accurate, revenue collection becomes easy. Simply put, insurers review the codes and check if the services fall under the coverage plan.

Fewer Claim Denials

As mentioned above, as soon as insurers locate any faulty code, they immediately send it back. It’s called a denied claim now, for which we need an effective denial management strategy. However, accurate medical coding minimizes the chance of claim rejection or denial.

Fast Claim Processing

When the claims are submitted correctly the first time, the practice’s income also boosts. Overall, the process speeds up. Revenue collection time decreases in return.

Better Reimbursements

Fair healthcare reimbursement depends on accurate medical coding. Thus, it ensures practitioners are appropriately paid for their services.

Higher Revenue

Don’t let denials drain your profits! Let’s talk numbers as the statistics speak volumes:

20% of claims face rejection, and a staggering 60% of returns are left in the dust, never resubmitted. So, the financial burden is real—practices tackle a $25 average per claim, but hospitals face an eye-watering $181.

The use of incorrect medical codes, especially during treatments, can have serious consequences for insurance coverage. The right code can mean a significant difference in revenue, with potential variations ranging from $20 to $2000. The Medical Group Management Association’s (MGMA) survey revealed a concerning 17% increase in denials in 2021 among professionals in the field.

Conclusion

Medical coding has a considerable influence on revenue cycle performance. Therefore, patients must obtain the correct diagnosis. Amid the revenue cycle, the invisible work of medical coding is completed. Charges are handled more quickly when done correctly, and claims are successfully investigated in the least amount of time. You can effectively manage your revenue cycle by selecting the right medical billing partner, such as P3 Care.