How Artificial Intelligence is Redefining Medical Coding and Billing

How artificial intelligence is used in medical coding? What are the challenges this technology is solving at scale? And how does an AI medical coding tool work? Learn everything in our blog.

Why Medical Coding and Billing is a Nightmare (And Why You Should Care)

Every diagnosis and treatment has a web of codes-ICD, CPT, and HCPCS. These codes tell insurance companies about the services provided to the patients. That may sound simple, but it is difficult to translate every procedure into code. Here is why. 

1. A Never-Ending Game of Catch-Up

Codes change all the time. For instance, last year's ICD-10 updates added over 1,000 new codes. For a human to remember so many codes is next to impossible. Add payer-specific guidelines into the mix, and coders are left scrambling to keep up.

Here's what happens usually: A coder might assign a medical code for a routine procedure, but a minor update might require a modifier they're unaware of. The result? A denied claim. Multiply this by hundreds of claims, and the financial hit is significant, not to mention the frustration it causes for everyone involved. 

2. The Human Cost of Mistakes

Errors don't just cost money; they cost trust. A rejected claim delays the patient's surgery, an insurance call that takes hours, and a provider's unpaid bill. With the average error costing $118 per claim, those mistakes add up quickly.

3. Heavy Workload Leading to Burnout

With staffing shortages at an all-time high, coders often have to work more than their capacity, resulting in physical and mental burnout. This burnout brings errors, and the cycle repeats. 

Also Read: 7 Ways AI Healthcare Chatbots are Improving Patient Experience

How Artificial Intelligence is Helping Medical Coders

As AI expands its horizons in healthcare, simplifying diagnosis and bringing personalization to patients' treatment, it's not surprising to see its usage in medical coding. Here is a short brief of how this technology is actually helping coders. 

1. Keeps You Ahead of Code Updates (So You Don't Have To)

Instead of spending hours deciphering the latest ICD-10 revisions or payer rules, AI tools like 3 M's CodeFinder or Optum360 automatically integrate updates.

What this means for you:

• Coders no longer have to memorize changes. They get real-time prompts for updates.
• Compliance issues were reduced to near zero.

2. Speeding Up Coding Without Sacrificing Accuracy

Even an expert medical coder struggles to assign codes accurately when processing hundreds of records. AI can assist like a real human assistant by analyzing medical records with Natural Language Processing (NLP) and identifying the right codes to assign.

For example: A cardiologist mentions "acute myocardial infarction" in notes. AI recognizes this as a heart attack and applies the correct ICD-10 code in seconds.

3. Prevents Errors Before They Happen

Medical billing mistakes are common and often stem from mismatched codes or missing modifiers. What if you can analyze claims in real time and spot discrepancies before submission? This is possible by using AI for medical coding. 

Why this matters:

• There are thousands of medical records processed daily. You need a tool to process them quickly. 
• Submitting the claims correctly in the first attempt speeds up reimbursement cycles.

4. Decoding the Mystery of Multi-Payer Rules

Every patient has ties with a different insurance provider. Dealing with each insurance provider is like speaking multiple languages at once. AI learns the "dialect" of each payer, ensuring codes align with their requirements.

What's more? AI medical coding tools adapt quickly to payer rule changes, keeping your claims compliant and your revenue cycle uninterrupted.

5. Giving Coders Their Time Back

Routine tasks like assigning codes or error-checking are exhausting. AI automates these, giving coders time to focus on higher-value work.

3 Reasons You Should Adopt AI for Medical Coding Now

The healthcare industry is embracing AI for administration tasks, even if there are challenges related to its implementation. The reasons behind this quick adoption are exploding data volumes, stricter regulations, and costly errors eating up the revenue. 

Holding off on AI adoption means:

• Losing revenue to denied claims.
• Overburdening your staff to the point of burnout.
• Falling behind competitors who are already reaping AI's benefits.

You must use artificial intelligence for medical coding to avoid all these mistakes. 

Working of an AI Medical Coding Tool

An AI medical coding tool simplifies and speeds up the process of assigning medical codes in the following steps:

• Access patient records from the healthcare provider's electronic health records (EHR) system.
• Scans the records to identify key details such as diagnoses, treatments, and medications. 
• Store the key details in an organized format. 
• Analyzes the data and recommends suitable medical codes (e.g., ICD-10, CPT, HCPCS) based on the information found.
• Send the code to the human reviewer with necessary details like modifiers, and confirm accuracy. 
• Send back the code to the EHR system for billing and documentation.

How to Get Started with AI in Medical Coding and Billing

If you're ready to take the leap, we have an approach for AI implementation:

• Identify which part of your revenue cycle needs the most help. Is it coding accuracy, denial management, or payer compliance?
• Invest in AI tools designed for healthcare or hire a software development partner experienced in healthcare and AI. 
• Because the healthcare industry is full of non-technical people, training the staff in artificial intelligence tools is essential. 

Final Thoughts

Though Medical coding and billing seem like administrative tasks, they're the backbone of healthcare's financial health. A weak backbone puts the healthcare organization at major risk, mostly its patients, who trust it. Embracing artificial intelligence for medical coding helps maintain that trust, serve patients without any delays, speed up reimbursement, and improve your organization's financial health. 

Softude is revolutionizing the healthcare industry with software and AI solutions tailored to meet diverse challenges. Reach out to our expert consultants today to explore how our services can empower your organization and drive meaningful change.