In a previous blog post, I discussed the ways in which the current healthcare industry outsource coding model delivers a suboptimal result for hospitals. In that piece, I highlighted some of the underlying perceptions and realities of the traditional staffing model in comparison to a managed coding solution which I believed would provide a better way for facilities to meet their outsourcing needs. In January 2015, we launched Enterprise HIM as a solution for our clients. One year later, we have completed our first Enterprise HIM Case study which showcases the value a well-designed and executed managed coding solution can deliver to providers.
The traditional approach to outsourced coding has been staff augmentation. Staff augmentation is typically used to meet short term needs due to coder turnover, leaves of absence, or system conversions when the facility believes the need for additional resources is temporary. However, it is has been my opinion that the traditional staff augmentation model does not measure up to the rapidly evolving healthcare marketplace.
Demand for healthcare services continues to increase due to the aging U.S population and the impact of affordable care initiatives has increased the need for coding resources. Industry changes, such as the transition to ICD-10, continue to impact coder productivity which has exacerbated this issue. Simultaneously, a substantial amount of medical coders are entering retirement at a time when the demand for the medical coding labor force is expected to increase. Given this reality, it is evident that most facilities will need to maintain some level of outsourced coding over the long term.
When we surveyed HIM Leaders as part of our inaugural HIM Benchmark Report in September, approximately 60% of our respondents indicated that they outsource a portion of their coding needs. Given the tight labor market associated with coder demographics at that time, this was not unexpected. What was unexpected is that while nearly 50% of our respondents indicated they work with one or two vendors, an astonishing 45% work with seven or more.
When hospitals spread outsourcing needs across multiple vendors, quality can suffer. Consistency among vendor control, quality and management cannot be expected. Additionally, the vendor does not have the proper economic incentive to make meaningful investments to ensure success as the length of assignment is unknown. Therefore, they sub-optimize their investment to mitigate their risk. Short term engagements, like those that coincide with the traditional model, also mean that coders do not have adequate time to get up to speed in a new environment since even experienced coders need 45-90 days to reach full productivity and quality. Enterprise HIM was designed to address these challenges. Key deliverables in Enterprise HIM include a rigorous and disciplined knowledge transfer and coder onboarding process coupled with, continuous quality audits, and an HIM operations team who works with the coders to improve skills. All of this is part of a long-term agreement, ranging from 12-36 months. In return for this commitment providers are guaranteed productivity levels, quality scores, and coder availability while benefiting from improved unit economics.
Over the past year, we have implemented our Enterprise HIM offering in more than 15 health systems. The benefits of this approach, when compared to our standard staffing engagements, are clear. On average, our Enterprise HIM clients see Quality Scores of 98% compared to 96% with traditional staff augmentation. A combination of disciplined HIM management oversight and a more comprehensive audit approach creates greater visibility to coding performance, resulting in average quality scores which exceed those from our staff augmentation engagements. With a managed coding solution, Coding Managers can perform quality audits until coders meet client standards. This oversight results in high quality coding and reduces the number of claim denials which ultimately maximizes revenue for the facility.
Long-term agreements also mean that coders have time to reach full productivity and quality. Coders have the time to learn new systems, identify common coding scenarios, and learn the nuances of the particular hospital coding environment which also leads to increased quality scores.
Improved quality scores are just one of the benefits of a managed coding solution. We also found that our Enterprise HIM clients see decreases in coder turnover and the amount of time it takes to identify and hire qualified coders. You can learn more about these insights by downloading our full Case Study here:
What are your thoughts on this managed coding approach? I value your comments.