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Implementing a comprehensive global sourcing strategy.

How can health institutions and physicians adapt to increasing complexity in our field and in medical coding? Fortunately, our industry is experiencing a plethora of creative solutions to some of our more difficult sourcing challenges. Where some see struggle, we see tremendous opportunity to lessen the procedural burden of medical coding.

With increasing costs (including medical insurance premiums), changes in reimbursement models for physicians and hospitals, quality reporting measures, and the new ICD-10 codes, healthcare providers are rightfully concerned with the quality and accuracy of the medical coding industry. If this wasn't enough, the 11th Revision of the International Classification of Diseases is due by 2018!

Today, there are many options to outsource medical coding to qualified, experienced staff located both domestically and abroad. While outsourcing has historically been more commonplace in other industries such as technology and customer service, it is now gaining importance and traction in healthcare due to the increased pressure to reduce cost.
Why do companies outsource?

According to the Deloitte 2016 Global Outsourcing Survey, the top
reasons that companies choose to outsource are to control cost, enhance
business operations, and to alleviate staffing concerns.

Cost Cutting Tool                          59%
Enables Focus on Core Business             57%
Solves Capacity Issues                     47%
Enhances Service Quality                   31%
Critical to Business Needs                 28%
Access to Intellectual Capital             28%
Manages Business Environments              17%
Drives Broader Transformational Change     17%

Source Deilotte 2016 Global Outsourcing Survey

Note: Table made bar graph.

International companies provide a comparative advantage as they employ a very highly skilled workforce at a much lower cost than traditional domestic firms. In addition, international companies invest heavily in education and infrastructure to further complement their offerings and guarantee quality. While domestic firms invest in many of these same important features, they also often compete with hospital systems and physicians for hiring resources, further exacerbating the already strained resource pool.

The decision to stay onshore or utilize international resources has become an important discussion for health systems. The trifecta of bolstering security, reducing cost, and maintaining quality has emboldened many healthcare facilities to now explore potential offshore opportunities for medical coding.

Data security

The biggest concerns when dealing with coding staff, whether domestic or international, are information security, HIPAA compliance, and disaster recovery. Onshore companies typically have a disparate employee base, with coders working from their homes, which allows employee flexibility but can easily compromise data security. Another concern is with coders employed in the same community as the health system for which they are coding. Seeing charts of people the coders may know personally (friends, family, neighbors, or even local celebrities) happens more often than people care to believe. One of the major benefits of having an international team is their indifference to the charts they are reviewing and the ability to monitor and videotape employees who work within a highly secure office environment. Companies employing an offshore solution have the capability to go "above and beyond" what is commonly acceptable in a domestic work place, to ensure a secure information environment.


Controlling costs is a necessity in today's environment. Providers incur tremendous expense to ensure their medical records are coded according to the ICD-10 guidelines that include an overwhelming 140,000+ codes. A recent Black Book survey shows that healthcare provider outsourcing has the highest growth rate of 32% from 2011 to 2016.

A large, dedicated workforce seems like a luxury. However, employing an international workforce will cost about half the cost of a domestic solution. This allows providers to incorporate a larger workforce to perform the medical coding and quality assurance functions, which are only increasing in complexity.

Often times, per-chart savings can be obtained internationally. Unlike the typical domestic hourly rate charges, per-chart pricing allows providers to pay based on actual work completed versus simply time spent coding. This is a clear alignment of interest between providers and coders. The time that must be dedicated to finding, interviewing, hiring, on boarding, training, and retraining coders is staggering. In addition, the cost of a seasoned domestic coder versus a new coder is close to 100% higher. Time is money, and the time and costs saved when using an outsourced model is a dual bonus.


Quality is the lifeblood of medical coding for both international and domestic firms. The following standards are very important in regard to quality:

* Coders continually receive training under the tutelage of credentialed auditors to stay abreast of the ever-changing coding rules and government regulations.

* Ongoing coder education is a core principle. Both domestic and international coders are often required to earn and retain AHIMA and AAPC certifications.

* Offshore coders have in-depth experience with multiple specialties including emergency medicine, radiology, pathology, anesthesia, cardiology, internal medicine, among others. In addition, inpatient and more complicated outpatient procedures are being outsourced internationally due to proven and sustained high quality scores.

* In many countries, such as India and the Philippines, medical coders generally hold supplementary credentials such as M.D. or R.N., or Master's degrees in life sciences, to achieve a 360-degree understanding of coding.

* 24-hour coding becomes a reality as overseas coders work during typical U.S. offline times.

* Many coding companies have begun implementing a hybrid model such that U.S.-based employees serve as coding auditors for their international coding team. This complementary solution allows for harnessing the strengths of both onshore and offshore workforces.

Smooth operator

Offshore medical coding has obvious benefits in cost savings, access to highly educated and qualified coders, and improvements in turn-around times. Additionally, with the growing demands of ICD-10 and the need to scale quickly and effectively, the discussion of having an offshore strategy becomes all the more crucial for the stakeholders involved.

By: April Langford Apr 26, 2017

By: April Langford
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Title Annotation:Offshore vs. Onshore Coding
Author:Langford, April
Publication:Health Management Technology
Date:May 1, 2017
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