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To Code Or Not To Code

​As a practicing physician, I was always meticulous in keeping my problem lists, allergy statuses and medication lists as current as possible, yet I was never excited about coding my visits for billing purposes. I considered it a necessary evil of sorts and learned to do it because it was a competency that I needed to master in order to practice my craft. In that regard, little has changed, although the stakes are rising.

As we move from fee-for-service to value-based payer relationships, we are increasingly being held to our quality as measured through the eyes of the payer. We can argue that the clinical record is a better repository of information and we can anticipate digital abstraction and artificial intelligence to harvest the information, but the reality is that given our current state as an industry, the preponderance of value-based care delivery in America today is done the old-fashioned way, using claims-based data.

So with that as our sobering truth, what is a doc to do to remain relevant - and thrive - in the ever-evolving landscape?


Learn to codify your care to accurately reflect the care and disease burden of your patients. 

If Risk Adjustment Factor (RAF) scores, Hierarchical Condition Category (HCC) codes and Medicare Star Ratings are foreign terms, I would suggest you engage to make them a part of your lexicon and your daily competency. Before you reach through the screen to push or fight back, let me explain the reasoning using Medicare Advantage as the example.

The insurance company has a pot of money and will give you just enough, as per their actuarial analytics, to care for your patient. How much they allocate to you is dependent upon how sick your patient is. A healthy patient does not need much money allocated, while a very sick patient may require a lot. The insurance company will look at the state of health or disease burden of your patients and will therefore write you a virtual check in that amount. If you spend less than they allocate then you keep all or some portion of the savings. If you spend more than they allocate, you lose and may even have to repay in some scenarios.

So how does the insurance company know how much to put in your bucket? Your coding. The sicker your patients are, the more care delivery money you receive. So coding determines the allocation amounts. 

Now you see the power of coding accurately: Healthy patients equal lower funding and sicker patients mean higher funding. 


Now before you go off thinking this is a game, let’s shed some light on the payer perspective. They, too, are trying to make a living and have two main levers to manage their company. They can try to limit the amount that is spent by supporting care management, preventive care services and other interventions to avoid costly hospitalizations. The other thing they can do is manipulate their premiums. Healthy people cost less and therefore the premiums they pay should also be less. By lowering the premiums, they attract people to join. For sicker people, the premiums are higher, as are the costs.

In both scenarios, everyone should be happy. The problem comes in when the patient appears to be healthy but is actually sick. How could that happen? Poor coding. If you do not accurately code the patient’s health or disease status, then they may appear healthier than they actually are. The premium they pay is mistakenly low but your expenses are unanticipatedly high – a recipe for financial disaster. So Risk Adjustment Factor scores, Hierarchical Condition Category codes and Medicare Star Ratings become surrogate measures of quality and therefore vehicles by which you tell the health or disease status of your patients, thereby enabling the proper premium, risk pool, and economic engine to work. 

So does coding matter? The answer is yes, until such time that the clinical part of the medical record can be abstracted to the same degree of specificity. While that may happen in our lifetimes, it is not the order of the day. 

Learn more about Risk Adjustment and Medicare Star Ratings in the below pdf. 

Risk Adjustment Methodology.pdf 

To Code Or Not To Code