No place like home: faced with a shortage of clinical coders, some healthcare providers are finding that developing home-based opportunities can aid staff retention and improve their bottom line - Feature Story

Healthcare Financial Management, July, 2003 by Teresa Benavidez, Beth Friedman

Short on clinical coders these days? You're not alone. The national vacancy rate for clinical coding and billing personnel is nearly 20 percent, according to a 2001 American Hospital Association study. That's even higher than the vacancy rate for nurses.

For those affected by this workforce shortage, the financial toll can be substantial. As the first step in the revenue cycle, coders directly affect billing, payment, and accounts receivable. When coder vacancies occur, charts remain uncoded, days waiting on discharged-not-final-billed (DNFB) claims climb, and revenue is left sitting in the medical records department. What's more, organizations forced to rely on inexperienced coders risk missed revenue opportunities and face an increased likelihood of improper coding.

The American Health Information Management Association recently implemented a coding credential to increase coder ranks and is actively promoting coding as a healthcare career for tomorrow's professionals, promising some relief for the future. However, in the meantime, hospitals need to alleviate current shortages and avoid subsequent revenue-cycle problems.

The Challenge

The Seton Healthcare Network, a multifacility healthcare system consisting of eight hospitals in central Texas, couldn't get its coding under control. The health information management (HIM) department, which is responsible for coding about 300,000 visits per year for five acute care hospitals in Austin, experienced ongoing shortages in coding staff. The result was very high contract labor expenses and reliance on various outsource coding companies. Furthermore, the organization was paying a high hourly rate for as-needed coding positions. Although the DNFB claims pending code assignments were being maintained at a somewhat constant level, this level was below Seton's targeted goal.

A Home Remedy?

To more easily recruit and retain coders, Seton considered implementing a home coding program in late 2001. By allowing coders to telecommute, the organization believed it could retain its existing coding staff, fill its coding vacancies with high-quality coding staff (home coders average 14 years coding experience), decrease coding costs by eliminating the need for outsourced coding services, and ultimately reduce DNFB days. (a)

Home coding can be supported in three ways:

* Making photocopies of the records and mailing or faxing them to the coder's home

* Providing coders with remote access to a complete electronic medical record (EMR)

* Implementing web-based coding

The health system evaluated all of these options. Photocopying or faxing had significant security risks and would result in extensive labor costs for additional clerical personnel. Although a complete EMR is one of the organization's long-term goals, this solution is still several years away. This predicament is not unusual. In 2002, only 13 percent of hospitals had an electronic or computer-based patient record, according to the 2002 HIMSS Leadership Survey.

Seton tentatively determined its best option would be web-based coding. With web-based coding, a scanning technician scans the record to make a copy available by Internet. This process is less labor-intensive and paper-intensive than photocopying or faxing. Also, little training would be required to transition a file clerk within the department to the scanning technician position. Once scanned, the images are encrypted and sent via the Internet to an application service provider (ASP) host computer and stored in an encrypted format. With a few mouse clicks, the coding manager or supervisor assigns the records to a coder and a digital certificate is applied to further secure the records. Using the Internet and a home computer workstation, the coder logs into the system, views the records, and assigns the codes. Encryption and digital certificates are used again at the coder's home workstation to ensure authentication of the coder and maintain security. Audit logs are also available to monitor access by the rem ote coder and ensure printing has not occurred.

Costs versus Benefits

Seton's next step was to create a cost-benefit analysis that compared current expenses with the expenses the application entailed. Current costs were calculated based on a 42 percent vacancy rate, and proposed system costs were based on all positions filled and 10 coders working from home.

With a 42 percent coder vacancy rate, the primary goal was to fill the empty coding positions and retain the existing staff by offering them a work-from-home option. Five coders who had previously worked for Seton were re-hired, and four of them were set up to work from home almost immediately. In addition, five existing in-house coders were transferred to a home setting.

Current costs included:

> Annual total outsource coding cost, including travel expenses

> Annual cost of coder recruitment

> Annual average hourly rates for hospital-based coders with benefits

> Annual average hourly rate for as-needed (PRN) coders

> Current value of an accounts receivable (A/R) day