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What Costs Are Involved When You Stop Coding In-House?

in-house coding

Apart from the actual clinical services you provide, well managed billing, including outsourcing or coding in-house and supportive documentation, is your single most important process. After all, revenues are the lifeblood of your homecare agency. Unless these processes are optimized and streamlined, reimbursements will lag and your organization will struggle to survive. Maybe it’s time to consider what many of your competitors already know, the majority of medial coding is accomplished with outsourcing!

Are You Still Coding In-House?

Do you have stellar processes and certified homecare coders in place? Have you researched outsourcing costs as compared to costs of coding in-house? Isn’t it always cheaper to ‘do it yourself’ rather than to hire someone?
ANSWER: Not necessarily, and in the case of ICD coding, not usually.
If that answer seems a bit too rosy, consider this. A professional company dedicated to a single task, handling great volumes day after day gains the experience to do that task more efficiently and saves on overhead expenses. This is as true for medical coding services as for any buying contract. As examples of costs savings, consider costs for a:

  • Factory-made aquarium vs. constructing one from scratch
  • Buying a Tootsie Roll vs. making your own ‘confectionery treat’
  • Engaging an outsourcing company vs. in-house coding

 Costs Factors When Coding In-House VS. Outsourcing

Below, we compare the cost factors involved when coding in-house vs. outsourcing. Consider which option works best for your organization!

  • Hidden costs of paying in-house coders.Total costs include much more than salary. Consider all benefits including insurance, paid vacation/sick leave, and holidays. Remember, each time any employee leaves your agency it costs $3,000 to $6000 to secure a replacement. Other coding in-house costs include finding, purchasing and the upkeep of software systems and required technologies. Most industry experts agree, for most small to mid sized agencies, paying a third-party provider to handle all coding/billing is the best and cheapest choice.
  • Agency start-ups or those in transition. Start-up agencies and those unable to find certified coders or who recently lost a coder, are in a venerable position. Temporary outsourcing makes sense! Also the risk of losing revenues or slowing cash flow due to coders who quit, get sick, or go on vacation is very real. Remember, these threats are nonexistent for the organizations relying on an outsourcing firm.
  • Agencies showing signs of coding inefficiencies. Complete and accurate coding backed up by specific documentation is essential to maximize reimbursements. Coders at outsource companies are trained specifically for home health and hospice coding. These coding experts will:
    • Maximize case-mix weights
    • Prevent claim delays, denials, and re-work
    • Process claims quickly
    • Ensure your cash “flows” freely instead of stagnating
    • Bottom line: You earn more when you outsource, more than offsetting the cost of the service.                                                                                     
  • Allow your managers to focus on managing instead of coding. Doing what managers are trained and hired for instead of coding causes a ripple effect throughout the organization. Managers have time to mentor and educate their teams. Comprehensive monthly performance reports provided by the outsourcing company makes existing documentation problems more visible. This allows managers to target clinicians needing retraining and time to provide education, thus eliminating issues.
  • Outsourcing eliminates ongoing coder re-training costs. Coding and documentation requirements are always in a state of change. Reimbursements will inevitably suffer unless those coding in-house remain fully up to date. Coding certification/re-certification is not optional to ensure maximum returns and adds up to a significant expense. But education and retraining for outsourced coders is not your responsibility. As fully trained experts, professional coders immediately implement all new CMS developments and complete training on ‘their dime.’

Next Steps For Coding In-House VS. Outsourcing

Coding in-house is a “knee-jerk reaction” for many, but there are numerous reasons why outsourcing is superior to in-house coding. The bottom line with all costs are the dollars left at the end of the day. Boiled down, outsourcing results in maximized reimbursements, lower overhead expenses, a reliable cash flow, and a more focused managerial team.
If you are considering outsourcing your agency’s medical coding, Kenyon HomeCare Consulting has a comprehensive program called Coding Plus. Let us maximize your reimbursements and minimize your stress! Contact us today to learn how our clients often see a 29% to 48% increase in their case-mix/reimbursement rates.

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