The industry standard for accuracy in medical coding is 95%, but even this leaves room for costly errors and compliance risks. Every percentage point matters—small inaccuracies can result in claim denials, delayed payments, and additional administrative expenses. 

With the average cost to rework a denied claim at $118, maintaining precise documentation and coding is essential for protecting both revenue and regulatory standing.

To move ahead, healthcare providers are leaning on medical coding through AI-assisted solutions and tried-and-tested documentation methods that help them correctly interpret and translate clinical diagnoses into billable codes.

In this article, we’ll discuss the best documentation strategies for achieving exceptional medical coding accuracy and delivering exceptional patient care.

Medical Coding: Why Documentation Quality Matters

Documentation quality directly affects reimbursement rates, compliance status, and overall revenue integrity.

When records are incomplete, vague, or outdated, they can result in undercoding, overcoding, or outright claim denials. Since payers require clear, clinical evidence to support every coded diagnosis, even minor documentation gaps can have major consequences.

The impact is quite significant:

• Financial Impact: Inefficient documentation is a leading cause of claim denials in the US healthcare system, resulting in billions of dollars in initially denied claims each year. Although providers often recover most of these funds after appeals, the process is costly and time-consuming.
• Compliance Risk: Inaccurate documentation exposes healthcare organizations to regulatory audits, fines, and legal liabilities. For instance, a 2020 audit found hospitals had overbilled Medicare by $1 billion due to documentation errors. 
• Revenue Cycle Delays: About 50% of providers experience an increase in claim-rate denials from the previous year, often due to documentation issues.
• Resource Drain: Clinical staff, especially physicians, spend an average of 1.77 hours per day—nearly 9 hours per week responding to documentation-related queries.
• Quality Scores: Organizations with better documentation practices score higher on Risk Adjustment Factor (RAF) scores and risk adjustment accuracy.

7 Best Practices for Improving Documentation Quality

Healthcare providers are implementing these evidence-based documentation strategies to transform their medical coding accuracy:

1. The Foundation: Clear, Complete, and Timely Documentation

Coders rely on clinical notes to assign the most specific and compliant diagnosis codes. Incomplete or unclear records lead to errors, delays, and denials.

• Document every diagnosis, symptom, and relevant condition discussed or treated during the encounter.
• Document the conditions and symptoms as you assess them to preserve accuracy and detail.
• Use specific terms instead of general descriptions. For example, document “Type 2 diabetes mellitus with neuropathy” rather than just “diabetes.”This specificity will allow coders to select the most accurate ICD-10-CM code, which impacts both quality reporting and reimbursement.

2. Strengthen Collaboration Through Effective Physician Query Processes

Consistent collaboration between clinicians and coders is essential for accurate documentation and compliant coding. Establishing a clear, structured physician query process—aligned with AHIMA and ACDIS guidelines—helps bridge communication gaps and clarify ambiguous or incomplete notes.

Encourage regular discussions between clinical and coding teams. Equip coders to query providers using non-leading language and clinical indicators, while also providing educational context when needed. Educate clinicians on how their documentation directly impacts coding accuracy and reimbursement outcomes.
‍

3. Use of Standardized Terminologies and Templates

Adhering to standardized clinical terminologies and coding guidelines guarantees consistency and compliance. You can: 

• Follow AMA CPT Guidelines and ICD-10-CM Official Guidelines for Coding and Reporting.
• Integrate MEAT criteria into workflows with templates while preserving physician autonomy.
• Establish a dashboard with CMI, Query Response Rate, MCC/CC Capture Rate, and Documentation Accuracy Rate to provide visibility and identify improvement opportunities.

4. Leverage Technology Solutions

Technology can substantially process documentation and coding workflows, reducing manual errors and increasing efficiency.

• Implement electronic health records (EHRs) with integrated coding support.
• Use computer-assisted coding (CAC) tools that analyze clinical documentation and suggest codes.
• Monitor coding accuracy through automated audits and real-time feedback.
• Use Natural Language Processing (NLP) technology to interpret unstructured data, such as text, handwritten notes, and spoken words.

Integrating diagnosis code entry into the note composition process increases agreement between clinical notes and coded diagnoses. Plus, electronic diagnostic terminology tools can also improve coding accuracy.

5. Invest in Clinical Documentation Improvement (CDI) Services

A structured CDI program bridges the gap between clinicians and coders, as they are designed to:

• Improve Accuracy: Identify documentation gaps before claims submission and achieve over 98% accuracy in clinical documentation.
• Accelerate Chart Review: Expedite the reimbursement process with a rapid 24-hour turnaround time for chart review.
• MRA Compliance: Stay compliant with Medicare Risk Adjustment (MRA) requirements through efficient process integration.
• Improve HCC/RxHCC Coding: Capture Hierarchical Condition Category (HCC) and Risk-adjusted HCC (RxHCC) codes precisely.
• Improve Auditing: Achieve up to 70% improvement in process productivity, enabling faster, more organised documentation workflows that support stronger audit readiness.
• Foster Continuous Improvement: Educate healthcare providers, clinicians, coders, and CDI staff on coding guidelines and documentation best practices.

6. Consider Strategic Outsourcing Partnerships

Partnering with specialized revenue cycle management (RCM) providers can significantly improve documentation and coding accuracy through:

• Specialized Expertise: Access to AHIMA/AAPC-certified coders that cover specialties like E/M, HCC, and HEDIS coding. They ensure optimal code implementation across all healthcare facilities.
• AI-assisted Coding: Leverage AI technology to expedite coding for thousands of charts while maintaining precision without significant capital investment. AI ensures real-time coding assistance, compliance checks, and minimal discrepancies.
• Optimal Implementation: Use updated coders possessing in-depth knowledge on E&M (inpatient/outpatient), radiology, surgery, anesthesia, and injections across all specialties.
• Scalable Resources: Adjust coding support based on volume fluctuations without staffing concerns.
• Dedicated Focus: Free up internal clinical staff to focus on patient care rather than documentation complexities.
• Strict Adherence: Partnering with ISO-certified RCM providers ensures effective coding practices and strict compliance with HIPAA and other coding guidelines.

Final Thoughts

Improving documentation practices is not just about compliance but also about capturing the full value of the care you provide. The more structured and specific the record, the more likely it is that coders will assign the correct diagnosis codes.

With the right strategies, technology, and support, you can exceed the industry standards in medical coding.

However, when internal resources are stretched or coding complexity grows, turning to a trusted RCM partner like HOM can position your organization for long-term stability and growth.

HOM’s team of AAPC and AHIMA-certified coders, domain experts, and clinical documentation specialists works closely with providers to standardize documentation, improve medical coding accuracy, reduce denials, and protect reimbursement.

With 95% coding accuracy and 48-72 hours TAT, HOM combines deep human expertise with cutting-edge AI and machine learning tools, ensuring coding precision at scale and actively strengthening and future-proofing it.

Let us perform a free audit to assess your current documentation practices and show you areas of improvement.