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AI Special Report: The benefits of automated medical coding

Medical Economics JournalMedical Economics July 2023
Volume 100
Issue 7

Artificial intelligence has the potential to change medicine for the better

Medical coding and patient care likely don’t seem related. In fact, they may appear to be complete opposites. One is focused on billing and revenue, the other on people. A recent Physicians Practice® article highlighted this difference, arguing that caring must be prioritized over coding. But what if one was not more important than the other? What if caring and coding could work together synergistically? When you add automation to medical coding, that is exactly what happens.

Medical coding by AI: ©Pandpistock001 - stock.adobe.com

Medical coding by AI: ©Pandpistock001 - stock.adobe.com

Medical coding automation not only optimizes the coding process — lowering costs, improving accuracy and accelerating the revenue cycle — it also has a positive effect on patient care. Here is how it works.

Margins and patient care: Medical coding automation delivers both

When it comes to medical coding, many practice managers probably never consider how it improves margins and patient care. The truth is, achieving both is far less likely without automation.

First, let’s talk about how medical coding automation improves margins in three ways:

Improved accuracy: Medical coding automation is highly accurate and therefore results in fewer denied claims, rework and partial reimbursements.

Accelerated revenue cycle: Automation produces coding results in hours or minutes, not days or weeks. This speeds up the revenue cycle and leads to better cash flow, fewer accounts receivable days and less pressure on your practice.

Lowered costs: Many practices choose to outsource coding to offshore companies to lower costs. However, medical coding automation usually is the same price or less expensive than this option. When you combine the automation’s cost with its speed and accuracy, your practice reaps big savings.

Now, let’s consider medical coding in an entirely different way from the traditional thinking. Although it may be peculiar to think of coding automation in terms of patient care, this is exactly what it delivers. It is not that far-fetched when you think about it: medical coding completed more quickly and accurately frees up physicians’ time by lightening their workloads. They can dedicate this extra time to improving the well-being of patients. We will explore this idea in more detail later, but first, let’s examine how automation compensates for the limitations of human coding.

How medical coding automation helps doctors, human coders and patients

Human coding has been the status quo for decades. From a
quality-of-care perspective, it directly affects doctor and patient.

For doctors, human coding increases their administrative burden. It is no secret that physicians play an important role in the coding process. Their documentation of the patient-doctor interaction serves as the basis for assigning the appropriate medical codes. Medical coding automation helps improve the documentation process, identifies missing or incomplete information, and alerts physicians to areas that require more detail or clarification.

Not only does coding automation help doctors more efficiently document patient encounters, but it also improves the quality and accuracy of medical codes. This frees doctors from having to spend time reviewing and correcting coding errors, and completing potential appeals and resubmissions from denied claims. Instead, doctors can spend that time with patients to improve the quality of care.

Of course, doctors handle only a small portion of the coding process. Medical coding professionals are responsible for the bulk of the job. Yet as there is a shortage of human coders, medical billing for patients can be slow. Ultimately, this hurts the patient experience. Slow billing creates confusion and financial strain for patients as they may not accurately budget for the delayed bill, or they may forget it altogether. Frustration from such incidents may result in lower satisfaction with your practice. As medical coding automation is quicker, billing delays are less likely and patients won’t be surprised by a forgotten bill.

Three benefits of automated coding

Now that you understand the drawbacks of human coding, here is how automation significantly improves the process:

Higher physician job satisfaction and retention: People don’t become doctors to get bogged down with coding and administrative duties. Most genuinely want to help patients improve their health and life. When physicians’ time is freed up with automated medical coding, they can do just that — feeling less distracted, less stressed and more present with their patients. And when doctors are happy, physician retention increases as a natural side effect.

Improved revenue capture: As mentioned earlier, automated medical coding is highly accurate. It finds procedures that doctors and human coders may miss during review, and it more precisely determines acuity levels, leading to more accurate diagnoses and increased reimbursement as appropriate.

Easier practice management through near-instant updates to guideline changes: Guidelines for coding change every year or so. For providers, this means they must implement the updates and retrain their coding teams. These constant changes slow down human coders and increase the risk of inaccuracies. However, with autonomous coding, the model can be configured to reflect the changes, providing almost immediate updates when guidelines change. For example, emergency medicine faced a new set of evaluation and management coding guidelines at the start of 2023. Many providers are still incorporating the changes and retraining their teams, but organizations that had automation in place quickly adapted to the new rules.

How these benefits translate to improved patient care

Although these benefits improve a practice’s overall efficiency, they also produce major gains in patient care:

More engaged and available physicians equals a higher quality of care

As medical coding automation reduces both administrative work and stress for physicians, patients reap the benefit of a healthier, happier doctor who provides better care. This is notable, as burnout is becoming increasingly common in the medical industry. According to a Mayo Clinic study, physicians who showed signs of burnout were more than twice as likely to make a perceived medical mistake. In other words, a well-rested and more satisfied doctor will be more alert, clearheaded and able to provide the correct diagnosis and treatment.

Faster revenue cycle means more time dedicated to patients

Not only does automated medical coding help patients receive their bills faster, but its speed creates fewer administrative issues and optimizes the medical billing process. This pays dividends not only for the doctor but for the practice as a whole, which can dedicate more time and resources toward patient care. The results can lead to a quicker diagnosis and shorter wait times for patients.

Fewer coding mistakes means fewer medical errors, happier patients

Coding errors hurt a practice in more ways than delays and increased costs. They can also harm the patient. From a financial standpoint, patients may be billed for treatment they did not receive or that was not necessary. From a health standpoint, a missing two-digit modifier could cause a patient to receive imaging on the wrong area of the body, for example. These can all have a negative impact on a patient and damage your practice’s reputation. With coding automation, fewer errors will translate into happier patients.

Getting started: How practices implement medical coding automation

At this point, you may be wondering how to implement medical coding automation at your practice. Yes, the technology is based on artificial intelligence, which may sound overwhelming. But the truth is, its implementation is very similar to other IT projects. Below are some ways to get started.

Make a plan: Stephen Covey’s renowned book “The 7 Habits of Highly Effective People”provides a time-honored piece of advice that applies to any medical coding automation migration: begin with the end in mind. Think about what you want to achieve with the technology. Are you simply looking for improved patient and physician satisfaction, or are you also looking to reduce costs? Do you want only your coders and doctors to use the technology, or your entire practice? Answering questions like these beforehand improves your ability to accomplish your goals.

Involve your entire practice: Implementing any new technology can cause friction. Some employees may not like the idea, especially if it is unexpected. This is why it is important to involve stakeholders from the moment you decide to implement medical coding automation. Discuss the project with your doctors, coders, management, IT staff and other parties who will be impacted by the technology. With their buy-in, the implementation will be much smoother.

Create a test project: When adding new technology, the goal is to have a smooth migration. The reality is transitional problems are normal and to be expected. Issues can arise with compatibility, configuration and integration. However, if you start with a test project that involves a small portion of your practice, you can identify potential problems early and ensure they are minimized when you scale the technology throughout your practice.

Hire an experienced vendor: AI is cutting-edge technology. As such, it is highly advisable that you don’t implement it alone, even if you have an IT department. Vendors who specialize in medical coding automation help you with deployment, ensuring the process is as smooth as possible. What’s more, the vendor is there to answer your questions, adjust the coding technology to your unique needs and help maximize your practice’s return on investment from it. Bring a vendor in early, as they will help with all the above steps, training and support.

Improve patient care and your entire practice with medical coding automation

The decision to focus on coding or patient care no longer has to be a choice between one or the other. When you add automation, your medical coding not only improves your margins but also plays a key role in improving patient care. Overall, the technology has a positive impact and adds value to a physician’s practice, helping it become more efficient, more effective and more appealing to patients.

Austin Ward, MBA, is head of growth at Fathom, the leader in autonomous medical coding. He oversees the company’s go-to-market efforts and client analytics. He brings broad experience in health systems, technology and data science and has worked at Boston Consulting Group, the Bill & Melinda Gates Foundation and in venture capital. He holds an MBA from Stanford University, an MPA from Harvard University, and a BA from the University of Chicago.

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