In-House Medical Coding Post-Pandemic: Is it Worth the Effort?

By AGS Health

October 6, 2022

COVID-19 tested the resiliency of our healthcare resources. According to the American Hospitals Association, U.S. hospitals will continue to face financial hardships. During this unprecedented public health crisis, the U.S. healthcare system confronted many challenges, including historic volume and revenue losses, PPE shortages, treatment capacity, loss of skilled labor, and skyrocketing expenses.

This crisis has prompted clinicians, administrative professionals, and executive leaders to reconsider how they can provide high-quality care at a reasonable cost to patients. At the same time, healthcare organizations need to address the pressing concern of a stagnating revenue stream in a high deductible private insurance landscape.

In-House Medical Coding: Outlining the Challenges

Does My Hospital Need CACDI (Computer-Assisted CDI)

The operational and financial burden of the pandemic on healthcare providers has laid the focus squarely on billing and coding procedures. Medical Coding is the key to extracting billable information from patient records into claim submissions and reimbursements in today's value-based care ecosystem. As a result, maintaining a healthy revenue stream necessitates accurate and comprehensive coding procedures. Any errors can have significant financial ramifications.

Maintaining in-house coding, even though critical, can often turn out to be a cumbersome affair. The primary challenges are:

  • Liabilities: Any deviation from the strict coding procedures can hurt the organization, resulting in reimbursement delays or denials, long processing times, and insurer audit or over-coding charges.

  • Management Issues: Even the absence of a single member of an in-house coding team can have a major impact on coding volumes, causing operations to stall and impacting cash flow.

  • Additional Workload: In-house training of coders can add to the already strenuous initial workload of the employees. This may lead to errors and omissions, which can prove costly.

The cost of keeping an in-house coding team varies depending on the type and size of the organization. When compared to a large group practice, hospital, or full-fledged health system, the cost per coding professional is usually lower in smaller practices of up to 10 physicians. However, the average yearly salary of an in-house medical coding professional can range anywhere from $ 48,000 to over $57,000 – a heavy expense for smaller organizations.

There are three typical approaches for hiring in-house coders:

  • Internal HR Recruitment: Your HR team and hiring managers are charged with rigorous hiring practices, including job postings, numerous interviews, negotiations, and new employee onboarding that can last for numerous weeks, if not months. All internal employment costs, including salary, employment taxes, Medicare tax, training, and vacation days, are covered by payroll.

  • Staffing Agency: If your practice hires a staffing agency to find skilled coding professionals, you'll need to follow an expense structure similar to the in-house recruitment model, plus pay a commission fee to the staffing agency.

  • Outsourcing: This is the least expensive of the three models, requiring only the cost of outsourcing. Minimal onboarding is required and resources can be scaled rapidly based on demands.

The pandemic added to the complexity. Numerous medical coding guideline changes were released in response to the coronavirus outbreak and subsequent medical care. Telehealth and telephone visits also contributed to the complexity with inconsistent payer rules, a general lack of pay parity and accuracy, and documentation issues.

Coder Responsibility Expansion

Medical coders are evaluated on four key metrics as part of the revenue cycle in a value-based care model:

  1. Charts reviewed
  2. Claims coded
  3. Claims submitted
  4. Denials appealed

The traditional role of the medical coder is rapidly changing. Roles and responsibilities now include a variety of business-related duties, such as:

  1. Appealing Denied Claims
  2. Billing
  3. Conducting audits/ internal review
  4. Filing Claims
  5. Performing compliance-related activities
  6. Querying clinicians on documentation

It's no surprise that many healthcare organizations are struggling to maintain a steady revenue stream through meticulous coding systems. Inaccurate coding practices are the leading cause of claim denials, resulting in major financial losses and reducing overall service quality (QoS).

Why AGS: Partnering for Success

As hospitals and healthcare providers are burdened with growing challenges, optimizing resources becomes more critical. Healthcare organizations can leverage technological advancements to improve the efficacy and efficiency of their medical coding. Partnering with a technology-enabled services provider can go a long way in countering challenges.

And here is where AGS can help.

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AGS Health


AGS Health is more than a revenue cycle management company—we’re a strategic partner for growth. Our distinctive methodology blends award-winning services with intelligent automation and high-touch customer support to deliver peak end-to-end revenue cycle performance and an empowering patient financial experience.

We employ a team of 12,000 highly trained and college-educated RCM experts who directly support more than 150 customers spanning a variety of care settings and specialties, including nearly 50% of the 20 most prominent U.S. hospitals and 40% of the nation’s 10 largest health systems. Our thoughtfully crafted RCM solutions deliver measurable revenue growth and retention, enabling customers to achieve the revenue to realize their vision.

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