Profee Coding: Dynamic Changes Bring Big Challenges

by | Jul 6, 2022

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As the HIM and healthcare revenue cycle priorities evolve along with the entire healthcare industry, some unique challenges have emerged with professional fee coding.

Until recently, most hospitals and health systems either did not have financial responsibility for the physician groups that supported them, or those physician professional groups were organized as separate business entities under the same corporate umbrella. Those groups typically had disparate EHR systems, billing systems and their own executive reporting structures.

What Changed?

In the last several years there has been a slow but significant change to that business model for a number of reasons:

  • Due to economic and financial pressure, providers, facilities and physician groups can benefit from merging their business enterprises to reduce expenses and maximize entitled reimbursement.
  • The implementation of ICD-10 code sets in 2015 made it more difficult for professional practices to discern and properly apply the new coding rules in their business.
  • New EHR implementations and upgrades have created a common documentation, coding and billing platform that presents an opportunity to improve patient care, increase accuracy in the patient record and create opportunities in information sharing.
  • Instead of two different business entities and two different reporting structures, all facility and professional fee coding is under the same HIM umbrella, reporting to the same senior executive.

Why Is this a Challenge?

This shift to a common revenue integrity business model with facility and professional fee coding reporting to the same management team means that performance for both is measured by the same key performance indicators (KPIs). The new reporting structure includes all coding under the supervision of the enterprise HIM director, VP or director of revenue cycle, VP of finance or CFO. This new point of contact is only one to two levels removed from the CFO. This puts much higher scrutiny on the quality and accuracy of the professional fee coding.

Facility coding, completed in the HIM department, demands high standards from the coding staff—certification, years of experience in the patient types they code, annual education on coding updates and emphasis on following CMS coding standards. Their coding is also scrubbed for accuracy by the facility billing or patient financial services department. Coding may be done concurrently with CDI staff. Though professional fee coding may involve a certified experienced coder, the coding and billing functions are typically performed by the office manager, billing clerk and sometimes by the physician.

In this new revenue cycle system, the financial metrics and compliance expectations applied to professional fee coding have not changed on the facility side.

As a result, major KPI differences come to light:

  • Compliance exposure due to poor training
  • Huge backlogs of unbilled patient encounters
  • High percentages of denied claims
  • Denials written off instead of being reworked and resubmitted
  • Lack of coding depth resulting in overcoding or undercoding
  • Questionable compliance with release of information (ROI)

The challenges for a traditional HIM coding staff can seem overwhelming when you consider increased payer scrutiny, lower Medicare payment schedules, the move toward value-based care and the emphasis on social determinants of health (SDOH).

Why Is this Difficult to Resolve?

A facility HIM department coding staff lacks the specific knowledge to take responsibility for the professional fee coding. Here are significant differences between the two:

  • Professional and facility services are submitted on different claim forms and may even be submitted to different entities for processing, depending on payer requirements.
  • Facilities report services on the UB-04 (or electronic equivalent). All services for the same patient at the facility must be submitted on a single claim. Each service line must include a revenue code, service date, units and charges. Most lines also include a HCPCS Level II/CPT® code. Diagnosis codes are not tied to claim lines but are applicable to the entire claim. The UB-04 has a large amount of information at the header level of the claim.
  • Professionals report services on the CMS-1500 (or electronic equivalent). Claim service lines include the “from” and “to” dates of service, place of service, procedure code, modifiers, diagnosis pointers, charges, units and the rendering provider’s information. In general, professional services represent the knowledge and skill of the practitioner, whereas facility services represent the resources consumed. Professional fee coding can require extremely complex knowledge in that specialty area.

Typically, a professional fee coder is only proficient in a specific specialty area. Can a dermatology coder also code neurology? Can an endoscopy coder also code ophthalmology? HIM facility coders do not have this specific expertise.

In addition, many physicians want a direct line of communication to their coders. They want to discuss complex cases and ask for guidance on improving documentation. And the physicians are directly watching the codes—the relative value units (RVU).

What’s the Solution?

At first, the challenges seem insurmountable—unacceptable performance on revenue cycle KPIs, unqualified individuals coding and billing on professional fee businesses, unfamiliar coding processes and rules for HIM staff, lack of specialty patient encounter knowledge by your coders, and more. Your solution is to engage a coding partner who has the experience and the coding staff expertise to resolve all of those issues. The right coding partner has access to a national network of coding specialists.

Look for a partner who:

  • Has documented experience solving this dilemma for other health systems
  • Has numerous references you can contact to confirm their expertise and capabilities
  • Has demonstrated both coding compliance and HIPAA privacy and security compliance
  • Is prepared to share responsibility for meeting your KPI goals


The recent trend of consolidating the coding and billing functions of both facility and professional fee encounters under one umbrella has caused myriad challenges for HIM and revenue cycle departments. Key performance indicators such as DNFB, denial rates, compliant coding and appropriate revenue capture have been difficult to achieve. The right coding partner can resolve those issues, but the selection process is critical.

That partner must have the required experience and expertise and be prepared to take full responsibility for the segments of coding with which they are entrusted to meet financial goals and organizational expectations.

The new challenges facing your organization can be resolved only by engaging a business partner that offers the necessary professional fee and facility coding skill sets along with the ability to keep pace with your organization.

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