How to Improve Medical Coding Accuracy

Accuracy in medical coding is essential for healthcare organizations, as it directly influences:

Billing accuracy

Reimbursement rates

Regulatory compliance

And ultimately, patient care. When medical coding is precise, it enables smoother billing processes, reduces the likelihood of claim rejections, and ensures healthcare providers are reimbursed accurately for their services. Accurate coding also plays a crucial role in compliance, helping healthcare organizations avoid costly penalties and audits.

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Medical Coding Accuracy and Efficiency Standards

The minimum standard for medical coding accuracy is 95%. Although no standards body ever enforced this standard, it was widely accepted after the advent of the ICD-9 coding standard in 1979 and has continued since the implementation of ICD-10 in 2015.

Medical coding accuracy is calculated by this formula:

Medical Coding Accuracy = Total Number of Records Reviewed – Total Number of Records With a Coding Error ÷ Total Number of Records Reviewed

In addition to maintaining high standards of accuracy, medical coders are generally expected to complete 15 to 18 patient records per day.

Common Medical Coding Mistakes

Medical coding can be complex, and even the most skilled coders may encounter issues that lead to errors. Here are some of the most common medical coding mistakes and how they impact coding accuracy:

Upcoding and downcoding

Upcoding (or overcoding) involves assigning codes that reflect a higher level of service than what was actually provided while downcoding (or undercoding) uses codes for a lower level of service. Both practices can lead to reimbursement issues, with upcoding potentially triggering audits or penalties and downcoding resulting in revenue loss.

Unbundling codes

Unbundling occurs when services that should be billed together under a single code are split into separate codes instead. This can lead to increased charges and may be seen as an attempt to inflate costs, resulting in denials or compliance penalties.

Incorrect use of modifiers

Modifiers are essential for providing extra information about a service or procedure, such as whether it was bilateral or required additional time. Using incorrect or omitted modifiers can lead to claim denials or incorrect payments.

Mismatched codes and documentation

If the coding doesn’t align with the physician’s documentation, it can result in claim rejections or the need for rework. Coders must ensure that documentation supports the codes submitted to avoid compliance risks and ensure proper reimbursement.

Incorrect diagnosis codes

Diagnosis codes determine the medical necessity of procedures, and using incorrect codes can lead to claim denials and potential delays in patient treatment. Coders must stay up-to-date with the latest codes and guidelines to avoid these errors.

Overlooking code updates

Medical codes and regulations change frequently, often annually. Failing to keep up with these updates can result in the use of outdated codes, leading to inaccurate claims, denials, and non-compliance.

Lack of specificity

General or unspecified codes can impact claim acceptance rates and reimbursement levels. When available, specific codes should be used to reflect the patient’s exact diagnosis or procedure to maximize accuracy and avoid potential delays.

Duplicate billing

Duplicate billing, where the same service is billed multiple times, can occur due to data entry errors or misunderstandings in coding. This error results in denied claims and may trigger audits if deemed excessive.

By recognizing and addressing these common coding mistakes, healthcare organizations can work towards improving coding accuracy, minimizing claim denials, and supporting compliance standards.

Steps to improve medical coding accuracy

Improving medical coding accuracy requires a structured approach that prioritizes training, technology, and a culture of compliance. Here’s a breakdown of essential steps healthcare organizations can take to boost accuracy rates and minimize errors.

1. Provide continuous training and education

“First, keeping up with changes to coding systems like ICD-10 and CPT is key. Codes are updated regularly, so I make it a point to do refresher courses or quick updates whenever necessary,” says nurse practitioner Jung Baccam of Atlas Ketamine.

Staying updated on medical coding changes, new guidelines, and medical terminology is vital for coding accuracy. Coders should have access to ongoing educational resources, such as certifications from the American Health Information Management Association (AHIMA) and the American Academy of Professional Coders (AAPC). These programs offer courses, workshops, and certifications that keep coders current on the latest practices and standards, equipping them to handle complex coding scenarios with confidence.

“Preventive care plays a big role in our approach, and I’ve emphasized this through regular staff training sessions on coding standards. This ensures streamlined electronic health records, reducing inaccuracies that could affect patient care and billing. By focusing on preventive measures and investing in continuous education, my team and I can decrease insurance claim rejections and improve coding practices significantly,” says Dr. Matthew Casavant of South Lake OB/GYN.

2. Implement a quality control and auditing system

“By regularly auditing our processes, much like doing regular quality checks, we improved diagnostic accuracy and patient satisfaction,” says Dr. Ryan Doyle, DDS of Capitol Dental.

Regular audits are crucial in identifying errors and maintaining high coding accuracy. Implementing both internal and external audits—such as random audits and focused reviews—enables organizations to identify coding patterns and address recurring mistakes. Quality audits should create feedback loops, allowing coders to learn from errors, receive retraining, and implement improvements over time.

“To make sure of the accuracy and enhancement, we will be using a mix of audit reports and feedback loops. We track key performance indicators: error rates, the number of claims denied or rejected due to coding errors, and how often codes need to be resubmitted. We can follow where the coders are excelling and where they may need additional training. Aggregated over time, these metrics paint a fine picture of overall improvement in accuracy,” says John Russo, a VP of Healthcare Solutions at OSP.

3. Invest in reliable coding software and technology

“Through our casework, we’ve seen that automated coding assistance tools, when combined with human expertise, can significantly improve accuracy. However, these tools should complement, not replace, professional judgment,” says Dioselvi Lora, of Freedland Harwin Valori Gander, a legal firm that specializes in medical malpractice claims.

Choosing a quality EHR (Electronic Health Record) systems also plays a key role by providing direct access to clinical data, reducing manual input errors. It’s essential to select software that integrates seamlessly with existing systems and aligns with compliance standards to support accurate, efficient coding workflows.

“One effective tactic is incorporating healthcare IT solutions to reduce manual errors. Implementing Electronic Health Record (EHR) systems can streamline data entry, leading to more accurate and efficient coding processes. For instance, hospitals using EHRs reported a significant reduction in medication errors, aligning with our efforts to improve accuracy,” says IT healthcare expert David Pumphrey, CEO of Riveraxe.

Many EHR systems let you use text shortcuts, often called dot phrases. These shortcuts allow you to type a short abbreviation that expands into a much longer and/or complicated phrase. These shortcuts can save you time and prevent typos, but the problem is that you can only use them inside the EHR and not in other apps like your email or note software.

TextExpander is a universal dot phrase tool that you can use in any app. TextExpander allows healthcare providers, medical coders, and administrative staff to create standardized Snippets for commonly used phrases, medical terminology, and coding entries. This saves time, improves consistency across patient records, and ensures that critical information is accurately and quickly documented.

Additionally, with the capability to customize Snippets and share them across teams, healthcare organizations can ensure that all staff members are using up-to-date, compliant language, which is essential for accurate coding, billing, and patient communication.

“Every keystroke saved, is time saved, which means I can do my job longer and see more children.” — Dr. Melanie Hsu

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4. Encourage clear and comprehensive documentation

“Also, when documenting, I try to be as specific as possible. The more detailed the notes, the more likely the coding will be accurate. I’ve also found that having templates or checklists for common diagnoses helps me avoid missing details or making errors,” says Baccam.

Thorough and unambiguous documentation from healthcare providers is foundational to accurate coding. Coders and clinicians should collaborate closely to ensure that all necessary details are recorded. Using standardized documentation templates can also help streamline information, reducing the risk of misinterpretation and ensuring that coders have the details they need for precise code selection.

“My approach to coding accuracy starts with well-established workflows. I ensure all relevant patient information is captured during consultations, which minimizes the need for later adjustments. In terms of protocol, I follow a structured routine where every code is reviewed for accuracy before it’s finalized. Regular team meetings and peer reviews also help cross-check codes and ensure no details are missed,” says Dr.Sham Singh, a psychiatrist at Winit Clinic.

5. Manage workloads and avoid burnout among coders

“I suggest that coders use time-tracking tools to measure their own performance and accuracy. It will not just balance your workload but will minimize burnout,” says Riken Shah, CEO of OSP Labs.

High workloads and repetitive tasks can contribute to burnout and lead to a decline in accuracy. To maintain performance, organizations should consider staff rotation, flexible scheduling, or hiring additional support during peak times. Balanced workloads help coders stay focused, minimizing errors and supporting long-term accuracy.

“Balancing my time between patient care and coding can be challenging, so I allocate specific weekly review sessions. These sessions help me ensure compliance and tackle any discrepancies early on. The combination of technology integration and continuous staff training has been invaluable in maintaining high standards in medical coding within my practice,” says Casavant.

6. Use real-time feedback mechanisms

“Real-time feedback is paramount for the coders to learn and improve quickly,” says Shah.

Real-time error alerts within coding software provide immediate feedback, allowing coders to correct mistakes as they work. Instant notifications for issues like incorrect code entries or missing modifiers support on-the-spot learning, reinforcing best practices and reducing the need for post-claim corrections.

“I keep track of claim denials and coding-related issues that pop up, as these are great indicators of where I might need to improve. If claims get denied or sent back due to incorrect coding, it’s a clear sign that something went wrong,” says Baccam.

7. Foster a culture of compliance and accuracy

Building a workplace culture that prioritizes compliance and accuracy is key to sustained improvement. Leadership can support this culture by promoting best practices, encouraging continuous education, and recognizing coders for top performance. Incentives and rewards for accuracy and compliance help motivate coders to maintain high standards and align with the organization’s goals.

Conclusion

Improving medical coding accuracy significantly benefits healthcare organizations, from increasing reimbursement rates and reducing claim denials to enhancing patient care quality and maintaining regulatory compliance. By investing in the accuracy of their coding practices, healthcare providers can streamline revenue cycles, avoid legal pitfalls, and support more reliable patient records, all of which contribute to better organizational outcomes.

For healthcare organizations looking to enhance their coding practices, a strategic investment in coder training, advanced technology, and supportive workflows is essential. Prioritizing these areas can lead to long-term improvements in accuracy, efficiency, and compliance. By fostering a culture that values precision and continuous improvement, healthcare providers can make a lasting impact on both financial and patient care success.