What does a medical coder do?
A medical coder reviews a patient’s medical record and converts documented diagnoses, procedures, services, and supplies into standardized codes such as ICD-10-CM, CPT, and HCPCS Level II. They also check that the documentation supports the codes and may go back to the provider when something needs clarification. Those codes become part of the information used for insurance reimbursement, reporting, and healthcare data.
Americans are using more healthcare services, and the sudden increase became very obvious, very abruptly in 2024. Much more so at present. Clinics and healthcare facilities are outsourcing medical coding specialists or medical coding virtual assistants like they’re in a race.
An apt analogy because it is a kind of race. Against availability (and competitors ramping up hiring faster than everyone else).
You’ve been feeling the influx of patients this year, too, so the experience is one that’s shared. The American Medical Association has been taking notice:
Spending on physician services alone grew 8.1%, a growth unseen in healthcare since 1990.
How do you know your staff needs additional remote medical coding specialists today?
How does outsourcing medical coders work?
In This Blog:
- ➤What does a medical coder do?
- ➤What Does a Medical Coding Virtual Assistant Do?
- ➤What Is Medical Coding vs Billing: Which Is Which?
- ➤Why Are Healthcare Practices Outsourcing Medical Coding?
- ➤How Much Does a Medical Coding Virtual Assistant Cost?
- ➤Is Outsourcing Medical Coding HIPAA Compliant?
- ➤What Are the Requirements for Remote Medical Coding?
- ➤Find Your Medical Coding VAs Through Remote Staff
- ➤FAQs
- ➤There Will Be More Charts Tomorrow
What Does a Medical Coding Virtual Assistant Do?
A medical coding virtual assistant reads the clinical documentation in a patient’s chart and translates it into the medical codes used for claims. That can mean working through visit notes, procedure records, lab results, and other documentation before assigning the appropriate diagnosis and procedure codes.
When the chart doesn’t contain enough detail to support a code, the coder can send a query to the provider for clarification.
Billing picks up later in the revenue cycle: claim submission, payment posting, denial appeals. Those responsibilities generally belong to the billing team.
They Assign ICD-10-CM, CPT, and HCPCS Codes
Most medical coding work draws from four main code sets:
- ICD-10-CM: diagnoses
- ICD-10-PCS: inpatient procedures
- CPT: outpatient services
- HCPCS Level II: supplies, equipment, and other services
A coder needs to know which version applies to the date of service, particularly around annual updates.
Example: CMS (Centers for Medicare and Medicaid Services) and CDC (Centers for Disease Control and Prevention) released the FY 2027 ICD-10-CM files for patient encounters from October 1, 2026, through September 30, 2027. Encounters during that period use the applicable FY 2027 code set.
They Review Charts and Provider Queries
The chart. Square one for them, if you will.
From there, the coder reviews the visit note and procedure documentation. They review other relevant records to work out which codes the documentation can support.
Sometimes, when crucial details or something ambiguous in the documentation catches their attention, or the coder doesn’t have enough specificity to choose between codes, in come provider queries:
The coder asks for clarification before proceeding.
They Check on Coding Audits
A coder reviews coded charts against the underlying documentation, looking for errors and checking whether the codes assigned can be supported by the record.
Outsourcing arrangements are awash with this task, and thus, remote professionals who specialize in this are able to accurately code your charts and meet standards agreed upon with the healthcare provider.
What Is Medical Coding vs Billing: Which Is Which?
Coding comes before billing. Once the documentation has been reviewed and the appropriate codes assigned, those codes make their way through the medical revenue cycle for billing.
Here’s the task breakdown and who’s in charge of each one:
What Is The Difference Between Medical Coding vs Medical Billing?
Medical coders and medical billing specialists have been welcoming a new team player as of late: AI. Artificial intelligence is making changes to workflows and to the work.
According to the Bureau of Labor Statistics:
Wider adoption of AI-powered coding tools may affect demand for medical records specialists by making parts of the coding process more efficient.
Even so, BLS currently projects employment in the occupation to grow 8% from 2025 to 2035:
Though AI is simplifying many tedious, manual parts of the workflow, human oversight is yet another thing in itself. Less a task, and more a separate leg of the entire operation.
Why Do Healthcare Providers Choose to Outsource Medical Coding?
Because of Never-Ending Chart Volume
It’s part of the profession as a whole. It doesn’t, and won’t, come to a halt.
What’s more, full patient schedules are already putting pressure on in-house coding teams to burnout. Here’s what the data says about healthcare worker burnout solutions and administrative burden.
That’s today. What about backlogs from yesterday? Or the day before? All these are, layer upon layer, creating mounds of extra work for coders.
Workload pressure, in two words.
Because of the Hiring Shortage
On the other side of workload pressure is hiring pressure, with research showing that the shortage is an ongoing thing as well.
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The projected number of openings every year through 2035 is 14,000. 14,000 job openings related to medical coding. Employment will grow 8% over the next 10 years.
AAPC’s (American Academy of Professional Coders) market numbers have base earnings at $67,260 yearly, on average – something that, to lay it out there, won’t fit conservative budgets.
Because of the Importance of Payment Accuracy
CMS estimated that 6.55% of Medicare fee-for-service payments were improper. For better perspective on that percentage, think about $28.83 billion’s worth of “mistakes.”
A whopping figure that covers failed Medicare coverage, coding, documentation, or other payment requirements (improper payments aren’t always a coding error or fraud).
Because of Claim Denial Appeals
41% of providers were seeing denial rates of 10% or higher, as recorded by Experian Health’s 2025 State of Claims survey. In 2022, 30% reported denial rates at that level, and 38% by 2024.
Coding errors, missing or inaccurate patient data, eligibility issues, authorization problems, and documentation can send claims back.
In the same survey by Experian, missing or inaccurate data is among the leading causes reported.
How Much Does a Medical Coding Virtual Assistant Cost?
For a useful US comparison, Salary.com’s medical coder salary average is $46,831 a year. $23 an hour (September 2026). These salaries are for local employee wages (not outsourcing rates).
And those costs are higher than many would think, since benefits account for at least 30% of total employer compensation costs across US private-industry workers. For full-time private-industry employees specifically, benefits averaged $17.03 per hour alongside $36.97 in wages and salaries.
These are economy-wide figures, but they help explain why salary alone doesn’t tell you what an employee costs to employ.
Understanding Salary Models for Medical Coding VAs:
Note: There isn’t one standard hourly rate for a medical coding virtual assistant, and current offshore pricing varies considerably by country, sourcing model, certification, specialty experience, and whether you’re hiring a freelancer or working through a managed staffing provider.
Comparing Your Sourcing Options for Medical Coding Virtual Assistants:
Offshore coders can work through charts while the US team is offline, with completed work waiting as the practice starts its day.
Provider queries need more thought. Agree on an overlap window or query process before the first chart lands in their queue.
Costs Beyond Medical Coder Salaries
The hourly rate is only one line in the calculation. You may also need to account for:
- Initial audit time while you review a new coder’s first batch of charts
- EHR setup and training, including getting the coder familiar with your payer mix
- Rework from coding errors, which can quickly eat into the savings of a lower hourly rate
Our free Outsourcing Calculator below lets you compare staffing arrangements using the role, weekly hours, number of VAs, monthly salaries, and employer overhead. It supports AUD, too. Just click, toggle, put in your numbers, and see the results:
Is Outsourcing Medical Coding HIPAA Compliant?
Yes, it can be, in the sense that HIPAA (Health Insurance Portability and Accountability Act) doesn’t impose a blanket ban on storing or processing electronic protected health information outside the United States.
HHS says a covered entity or business associate may use an overseas cloud service provider as long as a business associate agreement and the applicable HIPAA requirements are in place and met.
It also warns that overseas handling can introduce additional security and enforcement risks – should be considered in the required risk analysis.
What Are the Requirements for Remote Medical Coding?
Outsourcing Medical Coding Best Practices:
Start with the BAA. If your remote coder or coding company is acting as a business associate and will have access to PHI, get the appropriate agreement sorted before access begins.
From there, look at how the work will happen. Who gets an EHR login? Can charts be downloaded? Where can files be stored? Each coder should have their own account, with access limited to the records and systems needed for the job.
HIPAA training belongs on your pre-hire list as well. If you’re working with a vendor, ask how they secure PHI and what happens when someone leaves the account.
SOC 2 or HITRUST certification has its uses, although neither automatically makes the arrangement HIPAA compliant.
Can an Offshore Coder Access US EHRs?
Yes. Before you issue the login, though, check whether anything beyond HIPAA applies to the work you’re sending offshore.
Payer contracts may have their own terms covering offshore access, subcontractors, or where data can go.
Medicare Advantage and Part D can bring additional CMS requirements when an offshore subcontractor handles beneficiary PHI.
Medicaid gets more local. Rules can differ by state and by the type of work being outsourced, so check the requirements where your practice operates before including Medicaid work.
For overseas arrangements, and to be on the safer side, have healthcare counsel review the contract, including where PHI will be accessed or stored.
This section is general information and not legal advice.
How to Solve Medical Coder Shortages US
You’ve got charts waiting and your current coders have enough of them. Another US hire isn’t the ideal options because it may come with a salary and employment costs that are outside your practice’s scope.
This is where Remote Staff can help.
We’ve spent more than 18 years connecting healthcare providers with HIPAA compliant offshore medical coding specialists, AAPC certified remote medical coding staffing, specialty medical coding outsourcing solutions, and more
We do the lining-up of experiences against what your practice requires. We check on compliance knowledge. On tool knowledge. On the ability to work with team members living in different time zones. And on working under pressure, too.
Professional coders who can work with the code sets you use, your specialty, your EHR, and the volume of charts you need covered.
Related Read: Read about the experiences of Specialized Remote Medical Coders and Billers here.
FAQs
Is virtual medical coding secure and HIPAA compliant?
It can be. HHS allows ePHI to be processed or stored outside the United States when the applicable HIPAA requirements are met, including a BAA where required and appropriate safeguards. Offshore arrangements can carry additional security and enforcement risks, and payer or program rules may add their own restrictions.
What accuracy rate should an outsourced coding vendor guarantee?
You’ll see 95% used frequently as a coding-accuracy target, but there’s no single industry-wide method for calculating it. CodaMetrix highlighted that problem in June 2026, while AAPC material has likewise shown that organizations use different audit thresholds.
What qualifications should a medical coding virtual assistant have?
Look for a current coding credential appropriate to the work, such as AAPC’s CPC or AHIMA’s CCS, along with experience in your specialty, code sets, and EHR. Certification is worth verifying directly with the issuing organization rather than relying on a résumé alone.
Then test the candidate on representative charts (credential tells you they’ve cleared a professional standard; the test tells you how they handle your work).
Can a virtual medical coder work with my EHR system?
Yes. Remote coders can work inside an EHR or coding platform when the practice has the appropriate access and security controls in place. Put the required BAA in place before a business associate receives PHI. Restrict access to what the coder needs, and build login, device, and PHI-handling rules into onboarding.
How does outsourcing medical coding benefit my practice?
Coverage is one of the clearest reasons: an outside coder can absorb backlogs, higher chart volume, leave coverage, or growth without immediately adding another US employee. Hiring pressure is another; BLS projects about 14,000 openings a year for medical records specialists from 2025 to 2035.
How to reduce claim denials with outsourced coders? If denials are the problem you’re trying to solve, track their causes separately; coding help won’t fix claims being denied because of eligibility, authorization, or unrelated front-end errors.
Related Read: Learn about the Healthcare Worker Burnout and Administrative Burden that’s happening across many facilities in the US.
There Will Be More Charts Tomorrow
More charts is a phrase that’s a mainstay in every healthcare facility.
Though a busier practice is something to be grateful for, every appointment’s still riddled with paperwork, and the documentation needs to be turned into the right codes.
But you know your current team’s already overworked. Hiring someone new locally? It’s neither within your growth plans nor your financial strategy.
A remote medical coder is the newest team member you need to bring in to take on the work. The one who’ll take charge of every chart that arrives. Every “tomorrow,” from here on.
And don’t worry, you decide how much they take on and how their work is audited, the same way you would if you were to hire someone on-site.
Look for the right medical coding professionals and Request a Callback today.
Vaune Everis Cura has always been a writer in the truest sense, drawn to the art both as a personal creative pursuit and as a profession. Her experience penning content across digital marketing spaces and collaborating with business owners and market shapers has broadened her craft to include strategic direction and SEO insight. Having spent years with the InterContinental Hotels Group before stepping boldly into freelancing, she understands that at the centre of it all are genuine, meaningful brand–customer relationships built on purposeful, human content.
