How are Medical Coding Systems Reducing Occurrence of Insurance Frauds?

The rising prevalence of insurance frauds in the healthcare industry is propelling the demand for medical coding solutions around the world. These insurance frauds cause huge financial losses amounting to billions of dollars, according to the observations of the National Health Care Anti-Fraud Association (NHCAA). In the U.S., nearly $3.6 trillion was spent on various healthcare services including expenditure for healthcare services and goods, net cost of health insurance, public health activities, and investments related to healthcare, in 2018. 

The adoption of medical coding solutions and billing standards allows medical billers to create uniform checklists that are to be strictly followed as per the process claims. Moreover, the presence of various irregularities and inconsistencies in these checklists allows medical billers to spot frauds before the submission of the document to an insurance firm. Apart from the growing incidence of insurance frauds, the rising requirement for modernizing hospital billing procedures is also propelling the worldwide demand for medical coding solutions. 

The adoption of medical coding systems, particularly the current procedural terminology (CPT) medical code, is making the medical billing procedures highly effective. This medical code has been created by the American Medical Association (AMA) for helping standardizing and facilitating medical billing procedures. This coding system consists of alpha-numerical codes that are developed for describing the various services and treatments offered by a healthcare facility. These code sets are put into a database which is then used for billing insurance companies.

This billing system allows medical professionals to keep a track of their financial records and payments better. Due to these factors, the demand for medical coding systems is growing sharply across the world. This is, in turn, fueling the expansion of the global medical coding market. According to the forecast of P&S Intelligence, a market research company based in India, the market valuation will grow from $15.2 billion in 2019 to $42.4 billion by 2030.

Furthermore, the market is predicted to advance at a CAGR of 9.6% between 2020 and 2030. Diagnostic centers and hospitals are the major end users of medical coding solutions and systems. Between the two, the requirement for medical coding systems is predicted to soar sharply in hospitals in the coming years, due to the surging number of hospitals and the rising incidence of chronic diseases. In hospitals, medical coding procedures are adopted as part of the facilities’ revenue management process.

Across the globe, the demand for medical coding solutions is predicted to surge sharply in Asia-Pacific (APAC) in the forthcoming years. This will be a result of the increasing digitization of the records of patients in the regional countries such as South Korea and India and the growing adoption of health insurance services by a large number of people in the region. Furthermore, the presence of numerous hospitals is massively boosting the demand for medical coding solutions in this region.

Hence, it is safe to say that the demand for medical coding systems will explode all over the world in the upcoming years, mainly because of the rising incidence of insurance frauds and the ballooning requirement for modernizing hospital billing procedures.