How to Start a Home-Based Medical Coding Business
Medical coders that work from home are frequently self-employed independent contractors. Between working as an hourly employee and running your own firm, this kind of labor falls.
A person who has a contract with a larger organization and receives work from the organization for a predetermined fee is known as an independent contractor. These independent contractors gain from being able to work from home, have a flexible schedule, and earn a consistent and regular income without having to shoulder the high overhead costs and liabilities that come with small businesses.
The contract signed by the organization and the home-based medical coder certification in San Antonio should include details like:
Number of provided/coded charts, payment, and accuracy requirements
Responsibilities for Hardware and Software
A coder’s coding specialization, expertise, desired pay, and time commitment may all affect the amount of charts they can contract for.
Since rates differ by specialization, it’s critical to understand the industry average for your particular specialty and whether your rates fall within it.
When negotiating a rate in their contract, home-based medical coders can utilize the following rough projection:
Coding Specialist I: 250 outpatient and ER records or 45 inpatient records per day at a rate of two minutes per chart. 130 daily ambulatory surgery records, or 3.5 minutes per chart.
Coding Specialist II: 250 outpatient and ER records or 32 inpatient records every day at a rate of two minutes per chart. 120 ambulatory surgery records each day or 4 minutes per chart
Coder II: 23 inpatient charts per day, 3 minutes per chart, or 160 outpatient and ER charts per day. 80 ambulatory surgery records each day or 6 minutes per chart
Coder I: 120 outpatient and ER records or 15 inpatient records every day at 4 minutes per chart.
8 minute charts or 60 day records for ambulatory surgery
Medical coders working from home who wish to be independent contractors must also bargain their compensation rate. This is typically a flat fee that is specified in the contract. Then, this rate is given out per chart.
Geographical location, coding specialization, experience, and the state of the economy all have a big impact on pay rates. The following might be used as a rough guide to aid home-based medical coders in contract talks regarding compensation rates.
Outpatient Professional Coding: $.60 to $.75 per chart. Inpatient Facility Coding:.70 -.85 per chart Combination Coding:.90 to 1.50 per chart for both inpatient and outpatient services
The two key factors determining a home-based medical coder’s revenue are the rate of charts coded and the rate of compensation. It’s crucial to accurately determine the chart commitment and pay rate and balance these with how long the task will take to complete.
For instance, a medical coder may agree to contract for 875 patient charts each week at a cost of.65 cents apiece. The medical coder will need to set aside 35 hours of work time each week (875/25=35) if the commitment for the week is divided by the typical rate of 25 charts per hour. The medical coder’s weekly salary would be $568.75 (875 x.65) and “hourly” average would be $16.25 ($568.75 / 35 hrs) if they were paid.65 per chart.
Speed and accuracy are crucial for maintaining a lucrative home-based medical coding profession. The medical coder will be able to work less hours while earning more money if they work faster. Even if working only 20 hours per week, it is feasible to make “full time pay,” but this takes time and accuracy must also be maintained.
Most businesses that use medical coders from home include a requirement in their contracts that the coder uphold a particular accuracy standard. This standard typically has an accuracy of 94% to 98%. The independent contractor’s charts that are coded and submitted are frequently checked to make sure they are being coded correctly. The accuracy percentage was generated by this audit. The organization may end the contract if accuracy is not upheld.
Before becoming an independent contractor, a home-based medical coder must also think about benefits and taxes.
Since you are regarded as self-employed, benefits like medical, dental, 401K contributions, vacation, and paid time off are typically not offered. The majority of contracting companies do permit its coders to use their sick days and vacation days, but because these are typically unpaid, they must be budgeted for in advance.
Additionally, taxes differ for independent contractors. Payments are typically distributed by the company that the medical coder contracts with in a manner akin to a regular salary. However, these payments are made in gross earnings.
The home-based medical coder is in charge of deducting taxes from each check and saving the money for year-end tax payments to the government. Instead of a W-2 at the end of the year, the company will send the coder a 10-99, and the independent contractor should file a schedule 1040 when paying their taxes.
A schedule 1040 enables a medical coder working from home to itemize and deduct certain expenses, including office supplies, computers, internet connections, and books on medical coding. When it comes to taxes, keeping track of business-related spending is crucial and advantageous.
However, items supplied by the contracting company might not be eligible for a deduction. The services offered by an organization and the duties of a home-based medical coder differ from one organization to the next.
The medical coder may be required to acquire the medical coding books by some organizations, while at other organizations they may be provided. However, giving independent medical coders access to medical coding software, a firewall, email, and some technical help is the most widespread practice across organizations.
Typically, the home-based medical coder is in charge of setting up a suitable computer system, medical coding manuals, an internet connection, and regular working supplies (paper, pens, etc.)
The organization’s software, firewall, and email are typically the only things that receive technical support. Such things as hardware breakdowns, lapses in internet connectivity, and similar things are typically the responsibility of the independent contractor.
A medical coder is ready to find a company that provides such opportunities if they have all the information they need and are ready for the particular responsibilities that come with home-based medical coding and independent contracting.
Avoid using terms like “work from home medical coding jobs” when looking online; instead, use terms like “remote medical coding jobs” and “independent contractor medical coding jobs.”