U.S. Medical Coding Market Size, Share & Trends Report

U.S. Medical Coding Market Size, Share & Trends Analysis Report By Classification System (ICD, CPT, HCPCS), By Component (In-house, Outsourced), And Segment Forecasts, 2021 - 2028

  • Published Date: Feb, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-3-68038-025-5
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2019
  • Number of Pages: 150

Report Overview

The U.S. medical coding market size was valued at USD 16.4 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 8.3% from 2021 to 2028. Insurance frauds and issues due to misinterpretations of medical documents is a major parameter driving the growth of this market. According to the National Health Care Anti-Fraud Association, healthcare fraud costs in the U.S. are USD 68.0 billion annually. Moreover, increasing usage of billing and medical coding procedures in revenue cycle management is estimated to bolster the market growth. There are frequent revisions in the classification systems for medical coding, which also drives the market growth. The ICD 11 was presented in May 2019 and will come into effect in January 2022.

The U.S. medical coding market size, by classification system, 2016 - 2028 (USD Billion)

ICD 11 code has several new chapters and is designed to support Electronic Health Records (EHRs). It has 55,000 codes for classifying diseases, disorders, deaths, and injuries. The spread of the novel coronavirus has adversely affected the sector. New codes were created for COVID-19. For instance, the World Health Organization created ICD 10 codes, which were brought into effect from April to September 2020.

According to the Bureau of Labor Statistics (BLS), the employment of medical records and health information technicians is projected to grow by 8.0% from 2019 to 2029. Moreover, the total number of jobs was 341,600 in 2019. According to the staffing firm Randstad U.S., certified medical coder or technician is one of the most sought after jobs in the U.S. High demand for medical coders due to the rising need for universal language in medical documents is driving the U.S. medical coding market growth.

The rising adoption of computer-assisted coding to speed up the medical coding process and increase accuracy is also driving the market. Moreover, it enhances productivity, increases transparency, improves accuracy and compliance, reduces costs, and provides traceability. According to a 3M Company survey, computer-assisted coding increased medical coder productivity by more than 30%. Moreover, the development of new technologies, such as Artificial Intelligence (AI)-assisted medical coding, is supporting market growth. For instance, in September 2019, Fathom, a U.S.-based startup, utilized Artificial Intelligence (AI) to automate medical coding and improve the speed and accuracy of coding.

COVID19 U.S. medical coding market impact: 13.1% increase in market

Pandemic Impact

Post COVID Outlook

The U.S. medical coding market increased by 13.1% from 2019 to 2020, as per earlier projections the market was expected to be over USD 14.4 Billion in 2020

The market is estimated to witness a y-o-y growth of approximately 7% to 8% in the next 5 years

Growing development of new codes for COVID - 19, changing reimbursement policies, and the imperious surge in COVID cases are among few pivotal factors responsible for the sudden growth in 2020

The COVID-19 pandemic has shifted the focus of the healthcare community towards the importance of documentation during any medical service transaction, which is expected to reduce the claim denial rate

Changing regulatory policies and new codes related to COVID - 19, created confusion among medical coders thereby contributing to an increase in claim denial rates in 2020

Automation is gaining traction in this industry, mainly owing to the shift of outpatient visits to telehealth in 2020. Healthcare leaders are investing automation of revenue cycle management and medical coding by using cloud-based software and artificial intelligence.

 

The rise in implementation of EHRs, mHealth, healthcare IT, and others is supporting market growth. For instance, according to the Centers for Disease Control and Prevention (CDC), 85.9% of the office-based physicians were using EMR/EHR, while 79.7% office-based physicians had a certified EMR/EHR system. In addition, the major impact of social media on healthcare is supporting the market growth potential. For instance, 51% of the population uses social media to find healthcare providers, according to a survey conducted in 2019 by Binary Fountain, an online reputation management company. Social media is used by the healthcare industry for managing appointments, seeking feedbacks, health promotion campaigns, patient education, etc.

Classification System Insights

The ICD segment held the highest market share of over 69% in 2020. This is attributed to the high usage of ICD codes by healthcare organizations. ICD 10 code has about 68000 codes and offers benefits such as fair pay and enhanced efficiency as compared to CPT 9, along with lesser fraud, and better health quality and performance monitoring. Moreover, the new implementation i.e. ICD 11 will be effective from 1st January 2022 and will have 13 parameters to address errors due to duplication and code confusion. Multiple revisions in the ICD codes is a major parameter driving the segment growth.

The CPT and HCPCS segments are estimated to register significant CAGRs over the forecast period. HCPCS is used by Medicaid, Medicare, and third-party insurance providers, which drives the segment growth. Moreover, the U.S. government has made the use of the HCPCS code mandatory under the Health Insurance Portability and Accountability Act (HIPAA). CPT is part of the HCPCS codes, which are used to describe surgery, tests, and any other procedures. These codes are used for billing and are also tracked by the government for assessment of parameters, such as disease prevalence and healthcare spending.

Component Insights

The outsourced component segment accounted for the highest revenue share of over 64% in 2020. The segment is projected to expand further at the fastest CAGR from 2021 to 2028. Medical coding requires knowledge about different codes, such as ICD, HCPCS, and CPT. There is a significant rise in the number of healthcare organizations outsourcing their revenue cycle management, including medical coding, to save time and streamline workflow. For instance, more than 80% of the hospitals outsource revenue cycle management to external vendors, as per a survey by RCI.

The U.S. medical coding market share, by component, 2020 (%)

Easy availability of skilled resources at competitive pricing is the major factor driving the segment growth. The majority of healthcare organizations are outsourcing their coding needs to countries such as India, China, Vietnam, and Mexico. The in-house component offers the advantage of retaining control of the entire coding operations. Moreover, in case of any errors, accessing in-house medical coders is easier. However, high costs associated with coding software and the requirement of skilled coders are some of the parameters restraining the segment growth. Moreover, benefits of outsourcing, such as reduced operating costs, minimized claim denials, and scalability, are hindering the growth of the in-house component segment.

Key Companies & Market Share Insights

Prominent companies are adopting various business strategies, such as partnerships and mergers & acquisitions, to strengthen their market presence. For instance, in February 2020, Verisk Analytics, Inc. collaborated with SCOR to launch an AI-enabled analytical platform for automated underwriting of life insurance. Some of the key players in the U.S. medical coding market are:

  • Startek Health

  • Maxim Health Information Services

  • Oracle Corporation

  • Verisk Analytics

  • Aviacode, Inc.

  • Precyse Solutions, LLC

  • Parexel International Corporation

  • Medical Record Associates LLC

U.S. Medical Coding Market Report Scope

Report Attribute

Details

Market size value in 2021

USD 17.9 billion

Revenue forecast in 2028

USD 31.4 billion

Growth Rate

CAGR of 8.3% from 2021 to 2028

Base year for estimation

2020

Historical data

2016 - 2019

Forecast period

2021 - 2028

Quantitative units

Revenue in USD million/billion and CAGR from 2021 to 2028

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Classification system, component

Country scope

The U.S.

Key companies profiled

Startek Health; Oracle Corp.; Maxim Health Information Services; Verisk Analytics; Aviacode, Inc.; Parexel International Corp.; Precyse Solutions; LLC.; Medical Record Associates LLC

Customization scope

Free report customization (equivalent up to 8 analysts’ working days) with purchase. Addition or alteration to country, regional & segment scope

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Segments Covered in the Report

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research, Inc. has segmented the U.S. medical coding market report on the basis of classification system and component:

  • Classification System Outlook (Revenue, USD Million, 2016 - 2028)

    • ICD

    • HCPCS

    • CPT

  • Component Outlook (Revenue, USD Million, 2016 - 2028)

    • In-house

    • Outsourced

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