AI in Medical Coding: Transforming the US Healthcare System


Authors : Saifuddin Shaik Mohammed

Volume/Issue : Volume 10 - 2025, Issue 9 - September


Google Scholar : https://tinyurl.com/22rk2upy

Scribd : https://tinyurl.com/m7ekdtdk

DOI : https://doi.org/10.38124/ijisrt/25sep1014

Note : A published paper may take 4-5 working days from the publication date to appear in PlumX Metrics, Semantic Scholar, and ResearchGate.

Note : Google Scholar may take 30 to 40 days to display the article.


Abstract : The U.S. healthcare system struggles with heavy administrative burdens, with medical coding as a significant source of inefficiency and cost. This paper develops an analysis of the potential for artificial intelligence (AI) and automation to drive the evolution of medical coding methodologies. This paper discusses the underlying technologies, such as machine learning (ML), natural language processing (NLP), deep learning, and generative AI, that automate the assignment of code from unstructured clinical documents. The primary objective is to examine the impact of these tools on coding accuracy, coder productivity, revenue cycle management, and, in the process, regulatory adherence. By conducting an industry-based systematic review of peer-reviewed literature, industry reports, and recorded case studies, this paper identifies significant positive outcomes, including a substantial reduction in claim denial rates, increased coding throughput, and faster revenue velocity. It also examines what is wrong with it, including the persistence of algorithmic bias, major data privacy issues, extreme job displacement and evolution, and the urgent need for more flexible regulatory frameworks. The results provide evidence that AI represents a paradigm shift for medical coding: successful integration requires a strategic approach that addresses both technical and ethical considerations. From systematic and principled consideration of human-centered approaches toward data quality and data cleansing, the paper ends with the idea that AI-aided automation will revolutionize the human-coder dynamic toward a new role, moving coding from a role of repetitive task to one more complex in the case review, audit, and documentation integrity in clinical documentation system thus enhancing efficiency and quality of the processing of data, which is the heart and soul of the healthcare system.

Keywords : Medical Coding, Artificial Intelligence, Automation, Natural Language Processing, Revenue Cycle Management, Healthcare Administration, ICD-10, Clinical Documentation Improvement.

References :

  1. World Health Organization. ICD-11: International Classification of Diseases 11th Revision. [Internet]. 2022. Available from: https://icd.who.int/en
  2. American Medical Association. AMA Survey of Physicians on Prior Authorization and Other Payment and Administrative Issues. [Internet]. 2022. Available from: https://www.ama-assn.org/system/files/prior-authorization-survey-2022.pdf
  3. Sinsky C, Colligan L, Li L, et al. Allocation of Physician Time in Ambulatory Practice: A Time and Motion Study in 4 Specialties. Ann Intern Med. 2016;165(11):753-760.
  4. Tseng P, Kaplan GS, Richman BD, et al. Administrative Costs Associated with Physician Billing And Insurance-Related Activities At A Large Academic Health Care System. Health Aff (Millwood). 2021;40(8):1233-1240.
  5. U.S. Department of Health & Human Services. Health Information Privacy. [Internet]. 2024. Available from: https://www.hhs.gov/hipaa/index.html
  6. Wang Y, Wang L, Rastegar-Mojarad M, et al. Clinical information extraction applications: a literature review. J Biomed Inform. 2018;77:34-49.
  7. Esteva A, Robicquet A, Ramsundar B, et al. A guide to deep learning in healthcare. Nat Med. 2019;25(1):24-29.
  8. Stanfill M, Hsieh K, Caskey R, et al. The impact of computer-assisted coding on the role of the coding professional. Perspect Health Inf Manag. 2019;16(Spring):1c.
  9. Thirunavukarasu AJ, Ting DSJ, Elangovan K, Gutierrez L, Tan TF, Ting DSW. Large language models in medicine. Nat Med. 2023;29(8):1930-1940.
  10. LaPointe J. How Artificial Intelligence is Transforming Healthcare Revenue Cycle. RevCycleIntelligence. [Internet]. 2023 Oct 12. Available from: https://revcycleintelligence.com/features/how-artificial-intelligence-is-transforming-healthcare-revenue-cycle
  11. 3M Health Information Systems. University of Mississippi Medical Center Case Study: Achieving Quality and Financial Goals with Computer-Assisted Coding. [Internet]. 2018. Available from: https://multimedia.3m.com/mws/media/1598007O/umc-case-study.pdf
  12. Heath S. Cigna Uses AI, Big Data Analytics to Flag Fraud, Waste, and Abuse. HealthITAnalytics. [Internet]. 2019 Jul 17. Available from: https://healthitanalytics.com/news/cigna-uses-ai-big-data-analytics-to-flag-fraud-waste-and-abuse
  13. Fathom. ACPMedical Case Study: Automating Medical Coding with AI. [Internet]. 2023. Available from: https://fathomhealth.com/case-studies/acp-medical
  14. Henry KE, Hager DN, Van Vleck TT, et al. A Randomized Controlled Trial of an Artificial Intelligence-Based Clinical Decision Support System for Medical Diagnosis. JAMA Netw Open. 2022;5(11):e2241896.
  15. Obermeyer Z, Powers B, Vogeli C, Mullainathan S. Dissecting racial bias in an algorithm used to manage the health of populations. Science. 2019;366(6464):447-453.
  16. Medical Group Management Association (MGMA). Data Report: The State of Claim Denials in Healthcare. [Internet]. 2022. Available from: https://www.mgma.com/data/data-stories/the-state-of-claim-denials-in-healthcare
  17. Dyrbye LN, Shanafelt TD, Sinsky CA, et al. Burnout Among Health Care Professionals: A Call to Explore and Address This Underrecognized Threat to Safe, High-Quality Care. NAM Perspect. 2017;7(1).
  18. Wu S, Roberts K, Datta S, et al. Deep learning in clinical natural language processing: a methodical review. J Am Med Inform Assoc. 2020;27(3):457-470.
  19. American Health Information Management Association (AHIMA). The Role of the Human Coder in an Automated World. J AHIMA. 2021;92(5):22-25.
  20. Lee P, Bubeck S, Petro J. Benefits, Limits, and Risks of GPT-4 as an AI Chatbot for Medicine. N Engl J Med. 2023;388(13):1233-1239.
  21. Mandel JC, Kreda DA, Mandl KD, Kohane IS, Ramoni RB. SMART on FHIR: a standards-based, interoperable apps platform for electronic health records. J Am Med Inform Assoc. 2016;23(5):899-908.
  22. Optum. The evolution of computer-assisted coding. [White Paper]. 2021. Available from: https://www.optum.com/business/resources/white-papers/evolution-computer-assisted-coding.html
  23. Nym Health. Geisinger Automates 90%+ of Emergency Department Coding with Nym. [Press Release]. 2022 Nov 15. Available from: https://nym.health/press-releases/geisinger-automates-over-90-of-emergency-department-coding-with-nym/
  24. Siwicki B. How AI is automating medical coding and creating new roles for coders. Healthcare IT News. [Internet]. 2023 May 2. Available from: https://www.healthcareitnews.com/news/how-ai-automating-medical-coding-and-creating-new-roles-coders
  25. Peden A, Moore A. The Future of Health Information: A Workforce in Transition. American Health Information Management Association (AHIMA) Foundation. 2020. Available from: https://www.ahimafoundation.org/research-reports/the-future-of-health-information/
  26. AI in Medical Coding Market Accurate and Consistent ICD & CPT Coding. Towards Healthcare. [Internet]. 2025. Available from: www.towardshealthcare.com/insights/ai-in-medical-coding-market-size
  27. AI medical coding revolutionizes & drives Value-Based care. Reveleer. [Internet]. 2025. Available from: https://www.reveleer.com/resource/ai-in-medical-coding
  28. Wlprod. Health insurance denial rates by company. Wallace Law. [Internet]. 2025 Apr 18. Available from: https://www.wallaceinsurancelaw.com/health-insurance-denial-rates-by-company
  29. Admin. Computer assisted coding (CAC) catches on, delivering ROI & high marks for customer satisfaction. GeBBS Healthcare Solutions. [Internet]. 2025 Jan 17. Available from: https://gebbs.com/blog/computer-assisted-coding-cac-catches-on-delivering-roi-high-marks-for-customer-satisfaction/
  30. The ROI of AI-Powered Prospective Risk Adjustment. Reveleer. [Internet]. 2025. Available from: https://www.reveleer.com/resource/the-roi-of-ai-powered-prospective-risk-adjustment
  31. Key medical Coding Challenges & Solutions for 2025. Invensis. [Internet]. 2025. Available from: https://www.invensis.net/blog/medical-coding-challenges-and-solutions

The U.S. healthcare system struggles with heavy administrative burdens, with medical coding as a significant source of inefficiency and cost. This paper develops an analysis of the potential for artificial intelligence (AI) and automation to drive the evolution of medical coding methodologies. This paper discusses the underlying technologies, such as machine learning (ML), natural language processing (NLP), deep learning, and generative AI, that automate the assignment of code from unstructured clinical documents. The primary objective is to examine the impact of these tools on coding accuracy, coder productivity, revenue cycle management, and, in the process, regulatory adherence. By conducting an industry-based systematic review of peer-reviewed literature, industry reports, and recorded case studies, this paper identifies significant positive outcomes, including a substantial reduction in claim denial rates, increased coding throughput, and faster revenue velocity. It also examines what is wrong with it, including the persistence of algorithmic bias, major data privacy issues, extreme job displacement and evolution, and the urgent need for more flexible regulatory frameworks. The results provide evidence that AI represents a paradigm shift for medical coding: successful integration requires a strategic approach that addresses both technical and ethical considerations. From systematic and principled consideration of human-centered approaches toward data quality and data cleansing, the paper ends with the idea that AI-aided automation will revolutionize the human-coder dynamic toward a new role, moving coding from a role of repetitive task to one more complex in the case review, audit, and documentation integrity in clinical documentation system thus enhancing efficiency and quality of the processing of data, which is the heart and soul of the healthcare system.

Keywords : Medical Coding, Artificial Intelligence, Automation, Natural Language Processing, Revenue Cycle Management, Healthcare Administration, ICD-10, Clinical Documentation Improvement.

CALL FOR PAPERS


Paper Submission Last Date
31 - December - 2025

Video Explanation for Published paper

Never miss an update from Papermashup

Get notified about the latest tutorials and downloads.

Subscribe by Email

Get alerts directly into your inbox after each post and stay updated.
Subscribe
OR

Subscribe by RSS

Add our RSS to your feedreader to get regular updates from us.
Subscribe