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Report: Key Insights on Outsourced Coding

Posted by Michael DiMarco

Last month, we launched the Inaugural HIM Benchmark Report which was designed to allow those in our industry to see the “big picture” in HIM.  The data we gathered from over 140 HIM leadership professionals has helped us evaluate the HIM marketplace more broadly so we can better inform you about current topics and trends and provide you with a benchmark of how your department compares to others across the country in a variety of key areas.

One of the key subject areas highlighted in our Benchmark Report is Outsourcing.  Healthcare providers have traditionally outsourced specific facets of the revenue cycle to drive efficiencies and improve margins.  This trend is expected to continue and was extremely evident in the race to prepare for the transition to ICD-10.

At the time of our survey, approximately 60% of respondents indicated that they outsource a portion of their coding needs.  Given the tight labor market associated with current coder demographics, increasing demand for healthcare services, and the transition to ICD-10 this is not an unexpected result.  What is surprising is that while nearly 50% of our respondents indicated that they work with one or two vendors, an astonishing 45% work with seven or more.

I spoke about the fragmented nature of the industry in March in an earlier blog post where I concluded that the current healthcare outsourced coding model delivers a suboptimal result for providers.  In that piece, I discussed the concern that many facilities have which is that they cannot rely upon any single supplier to fulfill their needs within a required timeframe.  It seems the transition to ICD-10 may have further magnified that concern; whether real or perceived.  Working with multiple vendors presents several challenges; namely in the areas of management and quality assurance.  With a higher number of vendors, providers must use internal resources to manage vendor relationships and performance issues if they arise creating a number of inefficiencies.

Now that the dust of ICD-10 is starting to settle, it is extremely important that providers begin thinking long-term. It is evident that most hospitals maintain some level of outsourced coding over the long haul. Consolidating work with fewer vendors ultimately leads to better unit economics for providers.  Unfortunately, the majority of coding vendors behave like temporary staffing organizations and not like healthcare outsourcing companies.  They do not have a managed coding solution or a strategic approach for full department outsourcing.

With a long-term managed coding solution, outsourced coders report into an HIM infrastructure overseen by the vendor themselves.  This relieves the provider of repetitive tasks such as informing coders of existing policies, conducting knowledge transfers, and completing the rigorous implementation process.  Long term contracts result in coders who can deliver higher quality and productivity as they have the opportunity to learn over a longer period of time.  Furthermore, vendors offering a managed coding solution perform internal audits to ensure coders meet mutually agreed upon standards of quality.

We launched Enterprise HIM in January 2015 to address the issue of industry fragmentation.  Since that time, we’ve been able to guarantee quality, productivity, and rapid implementation for a growing number of clients while freeing providers of management constraints.  We believe there is a better way to manage outsourced services and are constantly seeking innovative solutions to common industry problems.

Are you a HIM Director working with multiple coding vendors?  If so, we’d like to hear from you in the comments.  What are some of the common issues you face in managing multiple vendors?  How does your department compare to the data in the Benchmark Report? 

In addition to inquiring about Outsourcing in our Inaugural Benchmark Report, we also gathered data on CDI, ICD-10 Readiness, Off-shoring and more.  If you have not read the 2015 HIM Benchmark Report in full, I encourage you to do so.

You may download it here by clicking the image below:

2015 HIM Benchmark Report The Landscape of Health Information Management 

Topics: Outsourcing