The effectiveness of automated coding system on reducing health insurance claim denials: A case study of outpatient Department at Songklanagarind Hospital
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Abstract
Background: Revenue management directly influences the financial stability of hospitals, particularly income derived from healthcare funds. One major cause of claim denials is coding error in disease and procedure codes. This study aimed to evaluate the effectiveness of an automated outpatient disease and procedure coding system in reducing claim rejections from healthcare funds at Songklanagarind Hospital.
Methods: This retrospective study utilized 49,497 outpatient visit summary records from Songklanagarind Hospital in 2023, all of which failed the reimbursement conditions according to the hospital information system (HIS). An automated disease and procedure coding system was developed using a rule-based technique aligned with the System Development Life Cycle (SDLC). The system included a coding database, rule repository, and matching algorithms. System performance was assessed by examining changes in claim denial rates, workflow efficiency, and operational costs. Evaluate the system’s performance using the confusion matrix, accuracy, sensitivity, false positive rate (FPR), and area under the curve (AUC).
Results: Implementation of the automated coding system significantly reduced the claim denial rate by 26.5% (p-value = 0.003). The system successfully processed 50.2% of outpatient coding tasks automatically and demonstrated increased system stability over time, with the standard deviation of rejection rates decreasing from 11.7% to 3.9% during the latter half of the year. Annual operational costs were reduced by 168,733 Thai Baht. The system achieved an overall accuracy of 84.4%, sensitivity of 65.5%, FPR of 2.0% and AUC of 81.7%.
Conclusions: The automated disease and procedure coding system enhanced coding efficiency, reduced workload and human error, and achieved measurable cost savings. Continuous system development and wider implementation across other hospitals are recommended to strengthen financial management and coding accuracy within the healthcare sector.
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