Risk Adjustment

3 Questions to Ask Before Signing a New Coding Vendor

The Risks

Health plans and healthcare organizations that work with coding vendors can recognize that they are many factors that go into vendor selection. On-boarding a new vendor is never easy, particularly in healthcare (and risk adjustment specifically) as the process is all about minimizing risk, and ensuring the vendor is aligned to the needs and requirements of the health plan and its members.

Poor-quality diagnostic coding poses myriad risks to health plans, including:

  • Presenting members’ true health conditions inaccurately:
    Correct coding provides visibility into individuals’ overall health, which enables payers to improve quality of care by enrolling members in the appropriate disease management programs
  • Decreasing financial integrity:
    Correct coding is key to accurate reimbursement to pay for the programs and health care that members need
  • Increasing audit risk (RADV or OIG):
    Compliance is a key component of medical coding; to be compliant, diagnoses must be supported by documentation

Key Questions to Ask

When deadlines are a concern, and your current coding vendor is not meeting your expectations, it’s time to find a new coding vendor. The questions below serve as a reminder of basic questions to ask to determine whether a vendor is up to par.

1. What is the vendor’s overall coder capacity, and can they demonstrate scalability? (If project volume is known, how many coders will be assigned to a project?)

With the deadline nature of Risk Adjustment programs, ensuring a project has the right amount of resources to complete a chart review is crucial. When vendors can’t guarantee they have adequate resources, work stoppages are a risk. Also, pressure on coders to increase their productivity increases the potential for coding errors.

2. Coder Training and Experience

It’s important that coders have the proper training in Risk Adjustment coding in addition to Risk Adjustment (HCC) experience. As far as training, payers will want to find out if a vendor’s coders have CPC, CRC, or CCS certifications through either (or both) AHIMA or AAPC. Additionally, payers can ask whether a vendor’s coders are educated on the specifics of Risk Adjustment coding, in addition to anatomy, physiology and general diagnostic coding concepts. Using medical coders with experience in other coding specialties, but who do not have HCC experience, is not strategic.

3. Is Continuous Improvement built into the vendor’s processes?

This element is two-fold. It refers to internal Quality Assurance (QA) as well as training or educational programs that become necessary because of regulatory updates.

  • Internal Quality Assurance (QA)
    QA processes must be built into coding processes. How often is the coder’s work QA’d? What is the passing error rate, and is there an error-threshold cap, meaning if a coder’s performance falls below it, they will be retrained and their performance monitored? Do senior coders review a coder’s work?
  • Regulatory Updates
    What is the process of informing coders of new Coding Clinics, new coding models and CMS notifications? Are there internal training/educational programs for coders to enhance their knowledge of changes within Risk Adjustment payment models?

Knowledge is power, and once health plans have this knowledge, they will be able to hire a coding vendor who truly will partner with them to return comprehensive HCC coding.


We simplify the management of member programs by making it radically more efficient, and increasing value to healthcare organizations and their members

Presentation @ RISE VBC: Effective Collaboration Strategies Between Payer & Provider