Getting medical coding right is crucial for the financial health of hospitals and physician groups. Yet, nearly 15% of all claims sent to private payers get denied at first, even those that were preapproved. Specifically, 15.7% of Medicare Advantage and 13.9% of commercial claims face initial denial.

These mistakes can cost healthcare organizations a lot, due to delays or lost revenue. A 2021 American Medical Association (AMA) report estimates that denied claims cost the U.S. healthcare system between $262 billion and $686 billion each year.

Besides the financial hit, coding errors can lead to compliance problems with regulatory bodies and mess up the accurate recording of patient care data. This can create a domino effect, affecting everything from resource allocation to developing effective treatment plans.

The Power of Medical Coding Audits

A strong medical coding quality assurance (QA) program is essential for ensuring your coding practices are accurate, compliant, and financially sound. This proactive approach catches and corrects coding errors before they lead to denials and disrupt cash flow.

More Than Just Reducing Denials

A well-organized medical coding QA program offers benefits beyond just reducing claim denials:

  • Financial Stability: Fewer denials mean faster and fuller reimbursements, which boosts financial health.
  • Compliance Confidence: Regular audits and following coding guidelines reduce the risk of penalties, letting organizations focus on quality care.
  • Accurate Patient Care Representation: Precise coding ensures healthcare data accurately reflects services provided, leading to better patient outcomes and informed care decisions.
  • Enhanced Communication: Consistent coding standards help clear communication between healthcare providers, payers, and patients, reducing confusion and frustration.

Building a Rock-Solid Coding System

Setting up a successful medical coding QA program requires a strategic and multi-faceted approach. Here are some key steps:

  • Regular Coding Audits: Conduct random or targeted audits by certified coders to spot errors and assess accuracy. A stratified sampling approach ensures a representative sample of charts is reviewed.
  • Ongoing Coder Education: Consistently train coders on complex cases, coding updates, and best practices through workshops, webinars, and online modules.
  • Leverage Coding Software: Use software for automated audits, compliance checks, and real-time coding help to improve efficiency and accuracy.
  • Track Performance Metrics: Monitor coding accuracy rates and identify areas for improvement using data analysis. Key performance indicators (KPIs) like clean claim rate and denial rate track progress.


By ensuring your practice has a consistent, repeatable coding audit infrastructure, or selecting a qualified partner to support your coding efforts, you can drive down your coding-related denials, missed billings and cost to collect.

Our customers enjoy denial rates less than 5%. Contact Us today to find out how we can help give you back control and transparency to your revenue cycle.