Fast Track Your Patient Coding Strategy

A “How To” Guide for Today’s HIM Professionals

5 Reasons to Assess Your Patient Coding Strategy

Whether your organization chooses outsourced coding services or has a completely in-house team, new requirements for effective coding performance have emerged alongside greater quality coding expectations. HIM directors and coding managers are experiencing new challenges and changing priorities, creating pressure to assess existing coding solutions.

  1. Improved coding accuracy supports denial prevention and quality improvement. Specialty coding knowledge and experience are not preferred—they’re required. These qualifications are not always available internally. By tapping on a coding partner, you have access to multiple coding experts for each specialty.
  2. OCR activity around breaches and investigations is on the rise. Since 2016, the challenges for managing business associates (BAs) have become more complicated. The OCR is increasing efforts to clamp down on noncompliance of patient data handled by BAs.
  3. Rising payer scrutiny leads to increased volume of coding denials. It’s no surprise that your team might be getting hit with an increase in coding denials. Even the best coding accuracy efforts can’t thwart increased scrutiny from insurance companies. As the volume of coding denials steadily increases, you need a proactive approach to manage and prevent denials rather than accepting them and writing them off.
  4. EHR challenges put workload pressure on your coding staff. For example, a recent EHR implementation at Penn State Health required additional bandwidth and services to clean up backlogs and work-queue errors.
  5. Annual coding rules are subject to continual updates and changes. What busy HIM director or coding manager can keep up? Outsourced services support both hospital and professional fee coding.

“Our coders became half as efficient immediately following go-live as thousands of new edits appeared and cases couldn’t be billed.  All facets of our business were impacted and new coding resources were required until we could get the new edits back under control.”  Matt Hoeger, Director, Revenue Integrity, Penn State Health Milton S. Hershey Medical Center

Hot to Assess Your Current Patient Coding Strategy

Think outside the box. Forget traditional mentality about how you accomplish coding with your current strategy. Identify your current needs and challenges, then determine what solution will address those needs and challenges in the most cost-effective manner. Reviewing your current strategy, ask yourself the following questions.

What is it like to use? Is it…

  • Flexible enough to handle upcoming changes?
  • Budgeted properly to deliver on KPIs?
  • Delivering the right level of coding accuracy to minimize denials?
  • Compliant with recent changes in HIPAA privacy and security rules?
  • Providing you with the proper coder training and expertise
  • Allowing you and your staff the time to address other HIM, non-coding tasks?

How well is it performing?

  • Is your coding department challenged to stay on budget?
  • Are you frequently behind on your DNFB goals?
  • Is reworking denials a challenge for you?
  • Do you struggle to provide timely education to your staff?
  • Are you able to manage your company’s growth or acquisitions?
  • Do coding staff LOA and PTO cause problems?

How would you summarize the experience?

  • What would I like to change?
  • What is working?
  • What is not working?
  • What new challenges are coming?

After this complete self-examination, it’s time to take what you learned, organize your priorities, and start looking at your options.

What are your Patient Coding Strategy Options?

OPTION A: In-house Coding Team


  • Communication between management and clinicians is hands-on and face-to-face.
  • Internal guidelines and policies minimize issues with HIPAA privacy and security.
  • Staff strengths and weaknesses are completely understood.
  • Ad hoc meetings are easy to organize.


  • Static budget does not allow for fluctuations or growth in patient volume.
  • Training, meetings, and informal discussions take away from productivity.
  • Budget and DNFB goals can be compromised by LOA and PTO issues.
  • Staff vacancies can be difficult to fill with local recruiting.

OPTION B: Outsourced Medical Coding Services

An outside coding service company can be used for backlog, staffing, PTO, and LOA needs as a backup to in-house coding staff.


  • DNFB challenges are alleviated.
  • Your LOA and PTO issues are covered.
  • Staff shortages are minimized or eliminated.
  • No long-term financial commitment required.
  • You only pay when you use the coding service.
  • No geographical restrictions to providing coding talent.


  • Backup staffing may not be immediately available.
  • Onboarding new coders may take too long for your needs.
  • You are not familiar with the quality and experience of the coders they assign.
  • Remote coding creates new HIPAA privacy and security challenges that must be closely monitored.

OPTION C: Integrated Coding Partnership

An outside coding service company takes total responsibility for all coding, hires existing coding staff, augments coding staff with its own coders, and takes full accountability for DNFB, denials, edits, etc. The healthcare organization’s HIM director and team can focus on other HIM priorities.


  • All revenue cycle KPIs are the responsibility of the partner.
  • Your staff will be hired and mentored, and receive ongoing training and education.
  • Flexible staffing by the partner will eliminate any DNFB issues caused by fluctuating patient volumes, LOA, or PTO.
  • Dashboard reporting will keep you and your team fully apprised of coding performance.
  • You and your team can focus on other priorities. 


  • Selection process for picking the right coding partner.
  • Uncertainty around whether your current in-house staff will want to work for them.
  • Creating a process to guarantee that the partner will deliver on KPIs.
  • If you are not happy with the coding partner solution, you must deal with the challenges of recruiting your coders back.

How Do You Decide?

Review the goals and priorities from your brainstorming, look at each option available to you and determine the best fit. Depending on which option you choose, you will need to determine how to overcome related challenges.

Option A:  In-house Coding Team

You think that an in-house staff is the way to go but you need to ensureyour coding staff remaines productive. KIWI-TEK performed a three-month productivity study across three large clients, comparing our coders to theirs. The coders used the same workflow and coded the same types of charts during the same time period. The only difference was that the KIWI-TEK coders were paid by the chart and the client coders were paid by the hour. The KIWI-TEK coders were 25 to 30 percent more productive. Hourly paid coders are less incentivized to maximize their productivity. If you continue with an in-house coding team, you will need an incentive plan that rewards productivity as well as accuracy.

Option B:  Outsourced Medical Coding Services

You think that a coding service strategy is the way to go but you need to solve the challenges that are mostly related to service and performance. Every coding service recognizes the need to meet or exceed the performance of your in-house staff. Otherwise, you won’t need their services. Competition forces people to do their best. Here are four steps to take:

  • Develop performance goals based on productivity, accuracy, and turnaround time.
  • Create regular reporting on those goals to compare and share.
  • Measure the vendor against your own staff.
  • Share the results with both teams to promote healthy competition and motivate all to do their best.

Option C:  Integrated Coding Partnership

You are convinced that an integrated coding partnership is the best strategy for your organization, but you need to solve challenges involving partner selection, budget restrictions, and delivering on KPIs. Identify several candidates among reputable coding companies and contact their references to discuss how they have met expectations. If you choose a partnership:

  • Ensure the coding partner’s compensation is linked to their performance on delivering to your goals and KPIs.
  • Create an “out” clause to reclaim your coders if performance parameters are not met.
  • Keep the option to phase in other vendors on your own.

Build a Patient Coding Strategy That Works for You

There’s no one-size-fits-all solution when it comes to a patient coding strategy. Every organization is unique, from case mix to code sets to QA process. Allow your coding department the time and effort to undergo a comprehensive examination of your current strategy. Identify changes that need to occur, and why. With the tips provided in this guide, you should be able to create a roadmap of your coding strategy. Rest assured that challenges listed for your preferred option can be resolved with teamwork and creativity.

For the best health information management solution, think outside the box and forget the traditional mentality of coding process and strategy. Here’s a helpful guide on how to prepare health information management resources for the future.

Coding Consultation

If you’re interested in learning about KIWI-TEK’s integrated coding partnerships, ask to speak with a client or request a HIM coding consultation.