U.S. Medical Coding Market Size, Share & Trends Analysis Report By Classification System (ICD, HCPCS, CPT), Component (In-house, Outsourced), And Segment Forecasts, 2022 - 2030

Report Summary

The U.S. medical coding market size was valued at USD 17.9 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 8.0% from 2022 to 2030. Errors in billings, insurance fraudand misinterpretations of medical documents result in large losses. Healthcare fraud results in USD 68 billion each year in the U.S. Increasing losses due to ineffective medical billing and revenue cycle management is increasing demand for revenue cycle management including medical coding software and services. This in turn is estimated to drive the market growth.

High adoption of digital technologies such as electronic health records, revenue cycle management software, mhealth applications, telehealth, and increasing efforts towards digitalization of healthcare in the U.S. is positively driving the market growth. 85.9% of the physicians’ offices were using electronic health records in the U.S., as per the data provided by the Centers for Disease Control and Prevention. Additionally, the impact of social media on healthcare is significantly growing. For instance, according to Binary Foundation, 51% of Americans were looking for providers on social media in 2019. Social media is used for seeking feedback, managing appointments, health promotion campaigns, awareness of product recalls, patient education, and recruitment. There is increasing utilization of medical coding in the revenue cycle management process. New revisions are included in the codes to increase flexibility and scalability. New ICD 11 was implemented in January 2022. It has several new chapters and supports electronic health records. It has approximately 55 thousand codes for the classification of disorders, diseases, injuries, and deaths. Moreover, many new codes were created during the COVID-19 pandemic for COVID-19 and telehealth. The World Health Organization (WHO) introduced new ICD 10 codes which were taken into effect between April and September 2020. Thus, the introduction and revisions of codes are positively impacting the market growth.

The Bureau of Labor Bureau of Labor Statistics, Office of Occupational Statistics and Employment Projections, estimated that medical records and health information employees are estimated to grow by 9% between 2020 and 2030. Certified medical coders are one of the major sought-after jobs in the U.S., according to an article published by Randstad, a staffing firm. The increasing demand for universal language in medical documentation is positively impacting the demand for medical coders and the coding industry.

The increasing workload on healthcare staff and physicians for medical coding are increasing the adoption of various automation solutions. For instance, according to a survey conducted by Athena health, physicians are working overtime for an average of 90 minutes for coding. There is an increase in the adoption of computer-assisted coding solutions for rapid, accurate, and efficient medical coding. Computer-assisted coding can increase productivity by 30%, as per a survey conducted by 3M. Furthermore, the development of artificial intelligence-assisted medical coding is estimated to drive the growth of U.S. medical coding.

Healthcare spending in the U.S. is rapidly growing. Moreover, hospital administration costs are the highest in the U.S. Healthcare organizations are facing increasing pressure to provide quality care at reduced costs. Thus, healthcare providers are adopting medical coding software and outsourcing services to reduce administration costs and increase return on investment. This in turn is estimated to drive the market growth.

Classification System Insights

ICD held the highest market share of 69.5% in 2021 owing to the growing use of ICD codes by coders. ICD 11 which was effective from 1^st January 2022 is accurate and flexible. It allows health information to be utilized for multiple applications such as enhancement in patient outcomes; quality analysis; safety; integrated care; strategic planning; population health reporting; and delivery of health care services. The ICD 11 codes are easy to use. They allow embedding the coding tool into local digital records and information technology systems. This increases user compliance, as well as lowers the cost & time for training. Multiple ICD codes and multiple revisions to suit the rapidly evolving health industry are driving the segment growth.

The CPT segment is estimated to witness the fastest CAGR during the forecast period. CPT codes are a part of HCPCS codes. They are used for describing tests, surgery, and other procedures. They are used for medical billing. The government tracks the CPT codes for assessing disease prevalence and health spending. HCPS codes are used by Medicaid, Medicare, and third-party insurers. Usage of HCPCS codes is mandatory under the Health Insurance Portability and Accountability Act (HIPAA) in the U.S. This in turn is driving the adoption of the CPT classification system.

Component Insights

By component, outsourcing held the largest revenue share of 69.5% in 2021 and is estimated to be the fastest-growing segment during the forecast period. Healthcare providers are increasingly outsourcing their medical coding requirements to reduce administrative costs. Outsourcing helps in cost reduction, saves time, and streamlines workflow. Thus, healthcare providers can focus on quality patient care and patient engagement. According to a survey by RCI, 80% of hospitals outsource medical coding. Growth in onshoring and offshoring of revenue cycle management including medical coding are positively impacting the market growth. India and the Philippines are the major countries for offshoring due to the easy presence of a skilled workforce at competitive pricing.

The in-house component segment is estimated to grow at a CAGR of 6.9% during the forecast period. Through in-house medical billing, coding, and revenue cycle management, healthcare providers can retain control over the entire operations. Moreover, in case of errors, in-house coders are easily accessible. However, the high cost associated with in-house coding owing to the requirement of skilled coders, software, and infrastructure is increasing the adoption of outsourcing. The outsourcing component is the fastest-growing segment owing to its advantages such as reduction in operating costs, claim denials, and increased scalability.

Key Companies & Market Share Insights

Key stakeholders in the U.S. medical coding industry are introducing new products and services to increase their presence in the U.S. For instance, in March 2021, athenahealth, a provider of software and services to healthcare organizations athenaOne, is a medical coding solution.  The platforms provide complete support for medical coding and relieve the burden on hospital staff. Some prominent players in the U.S. medical coding market include:

• 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

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 2017 to 2030. For this study, Grand View Research, Inc. has segmented the U.S. medical coding market report based on the classification system and component

• Classification System Outlook (Revenue, USD Million, 2017 - 2030)

  • ICD

  • HCPCS

  • CPT

• Component Outlook (Revenue, USD Million, 2017 - 2030)

  • In-house

  • Outsourced