Split Model Service Providers (Medical Coding Vendors with Offshore and Onshore Operations)

A troubling trend in the medical coding industry is a misleading split model where companies will have resources both onshore and abroad but not disclose which personnel are performing the services.  Some use their domestic resources almost exclusively for client facing interactions, such as sales and operations, but send all of the coding work to be performed offshore to reduce their costs.  This creates the illusion of a US based workforce, but it comes with the dangers of offshore medical coding.

The dangers of offshoring coding work are twofold: 1) accuracy, and 2) privacy.  Coding is a highly specialized cognitive function that cannot be commodified.  This isn’t bandages or simple repetitive tasks.  It is a service that requires a great deal of specialized knowledge and critical thinking that takes years of practice to hone and constant education to ensure that the coder is kept abreast of updates to their field.  As an external auditing provider, The Coding Network has audited a bevy of offshore coding vendors.  Our overwhelming experience is that offshore coding is suboptimal and greatly concerning for organizations that utilize their services.

Additionally, there are no HIPAA laws outside of the United States, raising privacy and security concerns.   A vendor might assure their clients that their overseas facility is secured, but if there is a breach of an organization’s PHI the only mechanism to protect themselves against the vendor would be a contractual claim, i.e. a breach of the terms of a BAA, not an enforcement action.  Trying to sue an entity that maintains most of its operations and assets offshore makes any recovery incredibly difficult and the likelihood of recompense murky at best.  You wouldn’t even know your information is leaked until it ends up in the wrong hands and since it would be impossible to trace without a candid engagement by the vendor, there is little that could be done.

Remember that the PHI in question is that of an organization’s patients.  What would the patients think if they discovered their personal information was being sent abroad for no other reason than to save the organization money.  This cost savings to an organization is nominal and more often than not the patients do not realize any of the savings in their billings.  From a public relations standpoint, this will likely not go over well with a practice’s patient base and could result in a loss of business and/or reputational harm.

Whenever dealing with a coding vendor it is important to make sure they are doing the work in the USA.  One tip is to ask for a clause in your contract that requires US-based coding.  Additionally, look out for pricing that seems too good to be true.  If you’re paying a bargain basement price for your coding work you will be getting bargain basement quality and security.

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