Home based medical coders are often self employed as independent contractors. This type of work falls somewhere between being an hourly employee and owning your own business.
An independent contractor is an individual who has contracted with a larger organization that provides work to the home based coder for an agreed upon payment. These independent contractors benefit by working from home, having a flexible schedule, and having a steady and reliable income without assuming the large overhead costs and liability that accompany small entrepreneurships.
The contract agreement entered by the home based medical coder and the organization should specify items like:
–Number of Chart Provided/Coded
–Hardware and Software Responsibilities
The number of charts a coder can contract for may depend upon their coding specialty, experience, desired income, and time commitment.
Since rates vary by specialty it is important to know the industry standard for your specific specialty and if you fall within that specialty’s average.
The following is a loose projection home based medical coders can use when negotiating a rate in their contract:
Coding Specialist I:
45 inpatient records daily
2 min/chart or 250/day outpatient and ER records
3.5 min/chart or 130/day ambulatory surgery records
Coding Specialist II:
32 inpatient records daily
2 min/chart or 250/day outpatient and ER records
4 min/chart or 120/day ambulatory surgery records
23 inpatient records daily
3 min/chart or 160/day outpatient and ER records
6 min/chart or 80/day ambulatory surgery records
15 inpatient records daily
4 min/chart or 120/day outpatient and ER records
8 min/chart or 60/day ambulatory surgery records
Home based medical coders who choose to be independent contractors will also need to negotiate their rate of pay. Usually this is a flat rate that is agreed upon in the contract. This rate is then paid on a per chart basis.
Rates of pay are strongly influenced by things like geographical location, coding specialty, experience, and current economic variables. A home based medical coder can use the following as a loose guide to help them in their contract negotiations regarding rates of pay.
Professional Coding/Outpatient:.60 -.75 per chart
Facility Coding/Inpatient:.70 -.85 per. chart
Combination Coding/Both In and Outpatient:.90 – 1.50 per. chart
The rate of charts coded and the rate of pay are the two main influences affecting a home based medical coder’s income. It is important to properly calculate the chart commitment and pay rate and balance it with the amount of time needed to perform the task.
For instance, a medical coder who codes out patient charts may contract for 875 charts each week at a rate of.65 cent per chart. If the week’s commitment is divided by the standard rate of 25 chart per hour the medical coder will need to allot for 35 hours of work time each week (875/25=35). If the medical coder is paid.65 per chart then their weekly income will be $568.75 (875 x.65) and their “hourly” average will be $16.25 ($ 568.75 / 35 hrs).
To hold a profitable home based medical coding job speed and accuracy are of upmost importance. Speed will enable the medical coder to increase their pay and decrease their time commitment. It is possible to achieve “full time pay” working only 20 hours a week, but this takes time to achieve and it is important to remember to maintain accuracy as well.
Most organizations that contract with home based medical coders specify in the contract that the coder must maintain a specific accuracy standard. This standard is usually between 94% – 98% accuracy. Charts that are coded and submitted by the independent contractor are periodically audited to ensure they are being coded correctly. This audit is what produced the accuracy percentage. If accuracy is not maintained the organization may terminate the contract.
Benefits and taxes are other items a home based medical coder must consider prior to becoming an independent contractor.
Benefits such as medical, dental, 401K contributions, vacation, and paid time off are usually not provided since you are considered self employed. Contracting organizations usually do allow for their coder’s to take vacations and sick days, however, since these are usually unpaid they should be budgeted for in advance.
Taxes are also different for the independent contractor. The organization that the medical coder contracts with will usually send their payments out similar to a scheduled paycheck. These checks are paid in gross earning though.
It is the responsibility of the home based medical coder to withhold taxes from each check and set the money aside for payment to the government at the end of the year. When the end of the year arrives the organization will send the coder a 10-99 instead of a W-2 and when filing taxes the independent contractor should file a schedule 1040.
A schedule 1040 allows the home based medical coder to itemize and subtract some items such as medical coding books, computers, internet connections, office supplies, etc. as deductions. Keeping track of work related expenses is important and beneficial come tax time.
Items that are provided by the contracting organization may not be counted as a deduction though. What is provided by an organization and what the home based medical coder is responsible for varies from one organization to another.
Some organizations may provide the medical coding books while other organizations hold the medical coder responsible for their purchase. The most common practice among organization regarding independent medical coders though is to provide them with the medical coding software, a firewall, e-mail, and some technical support.
It is usually the responsibility of the home based medical coder to provide an adequate computer system, medical coding books, an internet connection, and day to day work supplies (paper, pens, etc.)
Technical support is usually limited to the organization’s software, firewall, and e-mail. Hardware failures, internet service interruptions, and items of that nature are usually the responsibility of the independent contractor.
Once a medical coder has informed themselves regarding all of the facts and they are prepared for the specific obligations that accompany home based medical coding and independent contracting they are ready to locate an organization that offers such opportunities.
If searching online avoid searching for phrases such as: “work at home medical coding jobs” and try searching for phrases like “remote medical coding jobs” and “independent contractor medical coding jobs”.
Companies like Avia Code, Med Data, and The Coding Network are just a few that hire home based medical coders as well.