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How Do I Evaluate My Agency On ICD Coding?

ICD Coding

Like a ship without a compass or carpenter without a tape measure, homecare agencies often have no way to evaluate ICD coding performance. By optimizing ICD coding for accuracy, specificity, turnover time on submission to CMS, your agency stands to both boost its revenues and improve cash flow.
OK… So, how does your agency know if it is doing this well or not? And in light that evaluation, how do you decide between in-house and outsourced coding?

Use KPIs to “Score” Your Homecare Agency on Diagnosis Coding

Key Performance Indicators (KPIs) are provided by CMS to help you measure and track how well you are doing with ICD-10. Do a “self-test” of your agency, and test again after efforts to make improvements and meet quantifiable goals has been determined. Here are some questions based on the CMS KPI system:

  • How many days between service date and claim submissions?
  • What percentage of claims/claim-dollars are typically denied, diminished, or delayed?
  • What is the average reimbursement for each specific service? how does that compare to the industry average? How does it compare to the maximum possible reimbursement?
  • How productive are my coders? How many records are coded per hour?
  • How often must coders return documentation to clinicians because it is inaccurate, non-specific, or incomplete?
  • How often do coders fail to link clinical documentation and Oasis to proper code? How often do they struggle to do so?

Pros and Cons of Outsourcing vs. In-house Coding

Once you have evaluated the agency’s diagnosis coding, the question is how to improve? There are ways to improve in-house coding, but on the other hand, outsourcing might make more sense in your situation. Here are the pros and cons:

In-House Coding: Pros and Cons

Coding in-house gives more direct control, lets you work directly with employees, and allows managers to quickly interact with the coding office whenever it is needed. However, risks of sudden loss of coder, neglect of appealing denials, and sloppy submissions squelching your revenues are all higher in-house. Cash flow problems often occur in smaller offices during busy periods or when even one employee is sick or on vacation. Though some money may be saved upfront, in-house is generally less cost-effective overall in the long run.

Outsourcing: Pros and Cons

Some homecare managers may see outsourcing coding as a “loss of control” or fear it will be more expensive. In reality, a good outsource partner is able to increase reimbursement rates making out-sourcing more cost-effective than coding in-house. A client-focused outsourcing agency keeps you informed as well. A poor outsourcing group might “leave you in the dark,” but this need not be the case. Many ICD-10 coding providers are highly transparent about your billing and take time to answer all your questions. Outsourcing takes the coding “monkey” off clinician’s backs. This allows management a focus on case management instead of coding and clinicians to focus on client care.


Diagnosing your performance on ICD-10 diagnosis coding is a first step to optimizing coding. Follow-up action involves continuing education for in-house coders, documentation training for clinicians, or simply outsourcing all coding. At Kenyon HomeCare Consulting, we offer top-of-industry coding outsourcing and on-site training to homecare providers. To learn more about our services, call us at 206-721-5091.

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