D257 Task 1 HIM Business Case Example

Business Case: Computer-Assisted Coding for Emergency and Outpatient Accounts at a Composite Two-Hospital System, With Three Options Compared and the Payback Shown

Student Name

Leavitt School of Health, Western Governors University

D257: Healthcare Project Management, Task 1

Course Instructor

Month Day, Year

Business Case: Computer-Assisted Coding for Emergency and Outpatient Accounts at a Composite Two-Hospital System, With Three Options Compared and the Payback Shown

Project Details

Project name: Computer-Assisted Coding for Emergency and Outpatient Services. Organization: Riverbend Health, a composite system of two hospitals. Proposal date: September 29, 2026. Project lead: Coding Manager, Health Information Management (HIM). Executive sponsor: Chief Financial Officer. Requested decision: approval of one-time implementation funding of $180,000 and an annual software subscription of $220,000.

The Problem

Riverbend's HIM department codes about 190,000 emergency, outpatient surgery, observation and imaging accounts a year across both hospitals. Volume has grown 9% in the past year, while the outpatient coding team has stayed at 14 positions, two of which have been vacant for more than five months. The results are measurable. The average time from service to coded account is 6.2 days against a target of 3. Outpatient accounts waiting for coding hold an average of $3.1 million in unbilled charges at any time. To keep the backlog from growing, the department has spent $360,000 in the past year on contract coders. Coding-related claim denials for outpatient accounts cost about $410,000 in rework and lost payment last year, most often because of missing diagnosis specificity or modifiers.

Hiring alone has not solved the problem. Entry-level health information graduates report that experience requirements and wages remain barriers in the job market (Hamada et al., 2026), and Riverbend's open positions have attracted few applicants with the outpatient coding experience the roles require.

Options Considered

Option A: Continue as now. Keep the current staff and contract coders. This requires no new investment but keeps annual contract costs near $360,000, leaves the backlog above target and does nothing about denials. With volume still rising, the backlog is likely to grow.

Option B: Hire three additional coders. Three coders would cost about $255,000 a year in salary and benefits and would likely clear the backlog if they could be found. Given two positions already vacant for five months, the department cannot rely on filling three more quickly, and the option does not address the documentation and specificity problems that drive denials.

Option C: Implement computer-assisted coding (CAC) for emergency and outpatient accounts. CAC software uses natural language processing to read clinical documentation and suggest codes, which coders then review, accept, change or reject. Coders remain responsible for every final code. A narrative review found that CAC has shown value in improving coding accuracy and quality, and that successful adoption depends on sound change management and restructured coding workflows (Campbell & Giadresco, 2020). In a study by the AHIMA Foundation and Cleveland Clinic, coding time per inpatient record fell by about 22% with CAC without a loss of coding quality (Dougherty et al., 2013). Because Riverbend's accounts are emergency and outpatient rather than inpatient, this case assumes a more conservative gain of 15% in the first year.

Costs and Benefits of the Recommended Option

The table summarizes the expected first full year after implementation. Figures are estimates and will be tracked against actual results.

The cash improvement is not new revenue; it is money the hospitals are already owed arriving sooner. It still matters, because both hospitals have seen days cash on hand fall this year. Option B, by comparison, would cost about $255,000 a year with no payback period, no effect on denials and a real chance that the positions stay empty.

Stakeholders

The chief financial officer sponsors the project and approves the budget. The HIM director and coding manager lead it and are accountable for coding quality. Outpatient coders will change how they work every day and must be involved early. Clinical documentation specialists and physicians matter because CAC can only suggest codes supported by the documentation. The IT department builds and supports the interface with the electronic health record. The compliance officer must approve the review process that keeps coders, not software, responsible for final codes. Patient financial services will see the effect first in claims and denials. The vendor supplies software, configuration and training.

Key Risks

Coder productivity usually dips while staff learn a new workflow, so the backlog may grow for the first two or three months before it falls. Coders may also fear that the software is meant to replace them; the project must explain that the goal is to end reliance on contract coders, not to cut positions, and involve coders in testing. Automation bias, in which coders accept suggested codes without enough review, is a compliance risk and will be controlled through audits. Interface problems could delay go-live. Finally, the 15% gain is an estimate; if the actual gain is lower, the payback period will lengthen. Each of these risks will be carried into the project plan with an owner and a response.

How Success Will Be Measured

The sponsor should be able to see within a year whether the investment worked. The project will track five measures from a baseline taken in the month before go-live: average days from service to coded account (target 3 or fewer), unbilled outpatient charges awaiting coding (target under $1.6 million), contract coding spending (target zero after month six), coding-related outpatient denials (target a 25% reduction) and coding accuracy on the department's quarterly audit (target at least 95%, so that speed never comes at the expense of quality). Coder turnover will be watched as a balancing measure, since a change that drives experienced coders away would undo the gains. Results will be reported to the chief financial officer monthly during the first year.

Recommendation

Approve Option C, computer-assisted coding for emergency and outpatient accounts at both hospitals, with a phased go-live starting at the larger hospital. It is the only option that addresses the backlog, the dependence on contract coders and coding-related denials at the same time, and it is expected to repay its one-time cost within about nine months. The project team will report progress monthly and conduct a benefits review 12 months after go-live to confirm whether the estimates were met.

References

Campbell, S., & Giadresco, K. (2020). Computer-assisted clinical coding: A narrative review of the literature on its benefits, limitations, implementation and impact on clinical coding professionals. Health Information Management Journal, 49(1), 5-18. https://doi.org/10.1177/1833358319851305

Dougherty, M., Seabold, S., & White, S. E. (2013). Study reveals hard facts on CAC. Journal of AHIMA, 84(7), 54-56.

Hamada, D., Lalani, K., Brodnik, M., Fenton, S. H., Kennedy, A., Marc, D. T., Payne, V. L., & Reynolds, R. (2026). Workforce review of health information technology associate-degree graduates: 2017-2024. Advances in Health Information Science and Practice, 2(2). https://doi.org/10.63116/AH.000000002