Why is Proper Medical Coding in RCM Solutions Necessary?

From: Plutus Health Inc. , Posted Date: May 29th, 2022

Medical bills can run high. With so much money on the line, you want to ensure that your practice generates accurate medical bills to encourage prompt payments and avoid denials. Revenue cycle management or RCM solutions can help by providing proper medical coding.


How common are medical coding and billing errors in the industry? For starters, over 80 percent of medical bills have errors in them. A report by Medical Billing Advocates of America says,  three out of four medical bills reviewed have error in them. As for medical billing AR denials, the rate steadily rose to 20 percent throughout the second quarter of 2020 since 2016. This means that 10.8 percent of claims are denied upon their first submission. In the third quarter, the rate of national denials reached 11 percent, resulting in a 23 percent increase since 2016.


What is medical coding?


Medical coding is a crucial aspect of the healthcare industry’s revenue cycle management. It involves alphanumeric procedure and diagnosis codes for communicating critical information on medical conditions and treatments quickly and efficiently. Proficient medical coders are responsible for translating medical terminology into a standardized format. With their help, information is accurately and professionally transmitted between the healthcare provider and insurance companies.


Why is medical coding essential?


Medical coding is crucial in RCM solutions as it helps healthcare facilities save time and money. Professional medical coders review medical records to assign codes and ensure proper reimbursement for healthcare providers. These specialists also understand government regulations and private payer policies for compliant and accurate billing and coding practices.


The need for medical coding in RCM


One of the reasons to invest in reliable medical coding is to prevent medical billing AR denialsMedical coding errors make up 4.8 percent of the reasons for denials, with registration and eligibility topping the list at 26.6 percent. The other reasons for denials include missing or invalid claim data, service not covered, untimely filing, and provider eligibility.


Proper coding also facilitates timely payments from insurance companies to minimize interruptions in your practice’s revenue cycle management process. This way, you can boost your practice’s revenue and prevent hefty financial losses.




Investing in the right RCM solutions with medical coding can improve the financial health of your practice while ensuring smoother and correct services and treatments for patients. It can reduce denied claims, speed up payments, boost cash flow, and improve your collections rate.


Plutus Health provides custom RCM solutions to fit your practice’s medical coding needs and address pressing issues, such as, medical billing AR denials. We’re committed to helping you save money, and if necessary, we could work with your existing software and provide a revenue growth action plan with optimized and automated processes.