Why is it a Good Idea to Outsource Medical Coding and Billing?

Medical coding and billing are two especially important parts of the medical industry, as every piece of information on a patient file must be translated into code and then sent to the relevant organization for payment. The folk at say that without the right hcpcs code, CPT, and ICD codes, a claim is likely to be at best returned for correction or at worst, flatly rejected and payment denied.

If you are in charge of running a medical facility, you will be fully aware of the importance of these roles within your organization. Large medical facilities such as hospitals will usually have their own coding and billing department where they will have many individuals working to translate patient files and take care of the billing processing. But for smaller companies, outsourcing might be a better solution. So, what are the benefits of outsourcing your medical and billing processes?

Fewer Billing Errors

There is no denying that using a company that specializes in medical coding and billing is going to come with advantages, and fewer errors is one of them. Those who provide this service will ensure that their staff are fully qualified and up to date with the changes to codes, regulations, and guidelines. Since the staff that work at dedicated coding and billing companies will be constantly trained, they will be aware of changes and will, hopefully, avoid errors.

Improves Patient Care

When those in charge of running medical facilities remove the medical and billing service from within the organization, they can turn their attention to patient care, which is their main priority. Not having to worry about this administrative side of the business allows for more time to treat and care for patients, which will improve the medical facility’s reputation.

Saves Money

Although you will have to pay a coding and billing company to take care of this part of your business, you will usually find that it is more cost effective than paying individual salaries and the benefits that go with them. Furthermore, you will not have to worry about constantly training your medical coding and billing staff or providing an office in which they can work.

Improves Cashflow

As medical coding and billing companies typically have fewer errors, you are likely to see improvements in your cashflow. This is because accurate claims will be paid in a timely manner. You may have struggled with cashflow in the past due to delayed payments caused by even the smallest errors. Companies that specialize in coding and billing will usually ensure that claims are double- or even triple-checked before being submitted for payment.


Most large medical facilities have departments where coders and billers work to translate patient information into the relevant codes required by payers such as insurance companies and organizations including Medicare and Medicaid.

Smaller medical facilities such as clinics or private practices might prefer to outsource this part of the business to dedicated coding and billing companies, and there are many good reasons to do this. Firstly, companies that specialize in coding and billing will have fewer errors. It is in that company’s interests to ensure that files are coded accurately and that they are following the guidelines and policies of the relevant payer. Fewer coding errors means quicker reimbursement from the payer, which then improves cashflow for the medical facility.

By outsourcing coding and billing, medical providers do not have to worry about paying salaries or providing office space, so it is often more cost effective to outsource this part of the business.