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Onshore to Offshore: Why Blended Medical Coding Models Have Become the New Standard

By Sabrina Yousfi, MBA, RHIA, CCS, CDIP

Nearly 80% of health system finance leaders state they will use some form of outsourcing within the health care revenue cycle in 2026. Outsourcing is increasingly being used to cope with staff shortages, mitigate rising payer denial rates, and build stability amid uncertain reimbursement forecasts. Revenue cycle outsourcing has also emerged as a strategic lever for operational resilience.

One of the areas within revenue cycle that is ripe for outsourcing is medical coding. Whether outsourced “as needed” or fully contracted out, coding services companies have been serving health care provider organizations for several decades. Outsourced segments account for 64.8% of the US medical coding market revenue, as providers increasingly move away from purely in-house models to reduce administrative overhead and help combat the 12% talent gap in the domestic medical coding workforce. What’s evolved is the location of the outsourced staff.

Once deemed insecure and subquality, the past few years have seen an uptick in the use of offshore coding blended with onshore coding expertise, as well as hybrid models. Onshore and offshore coding resources are brought together on a single outsourcing platform, and using new, emerging technology. Costs are reduced while quality is maintained.

The Value of a Blended Shore Model
Blended medical coding models integrate global teams into unified operations with US-based coding expertise. In practice, this often means combining a smaller onshore team focused on oversight and complex cases with offshore coders handling high-volume production work. In addition, time zone differences have become an operational advantage rather than a barrier. For example, one organization achieved near real-time productivity by using offshore coders working overnight.

“They are 12 hours ahead of us, which allows the coders to work overnight. So when we come in, the accounts are fully coded,” explains Valethia Berry, RHIA, CCS, CPC, director of coding (facility) and HIM at Grady Health System in Atlanta.

This approach improved turnaround times and reduced operational strain, including the need for weekend coverage. More importantly, success was tied to integration, not geography. Offshore coders were treated as part of the internal team, with consistent communication and shared workflows. The blended model produced significant savings from domestic vendors and even insourcing.

Five Tips for High-Performance Blended Coding
Organizations that succeed with blended models tend to follow a consistent set of operational practices, such as the following:

• Integrate, don’t isolate: Treat offshore coders as part of the same team, with shared goals, workflows, and communication channels.
• Standardize processes across locations: Ensure consistent use of work queues, coding guidelines, and escalation paths.
• Use time zones intentionally: Design workflows that enable overnight productivity and faster turnaround times.
• Align coding and clinical documentation improvement (CDI) workflows: Create tight feedback loops between coders and CDI teams to reduce rework and queries.
• Prioritize communication cadence: Regular touchpoints prevent misalignment and reinforce team cohesion.

These practices reinforce that blended success is less about location and more about operational discipline and integration. With these best practices in place, the next hurdle to overcome is change management.

The Real Barrier to Globalization
Despite the operational benefits, implementing a blended model is rarely straightforward. The most significant challenges are not technical, but cultural. Leaders consistently point to change management as the most difficult aspect of transitioning to offshore or blended coding. Staff concerns about job security, evolving roles, and new workflows can create resistance if not addressed proactively.

Johanna Weller, MBA, vice president of system revenue cycle at Main Line Health, says change is not a one-time initiative but an ongoing process. “I do not see change management as something that has a beginning, a middle, and an end,” she says. “It’s a journey; we’re getting better at it every day.”

Transparency plays a critical role in easing transitions and should be part of every HIM manager’s strategy. Organizations that clearly communicate the rationale behind workforce changes and actively engage staff in the process are more likely to achieve long-term success.

Redefine the Role of the Medical Coder
As global workforce models expand, the role of the medical coder is also evolving. Advances in AI and computer-assisted coding are shifting coding from a manual task to a more analytical function.

Thomas Jefferson University’s vice president of revenue cycle, Shiny George, MS,RHIA, describes this transformation as a paradigm shift, noting that coders are becoming the “AI-augmented specialists focusing on editing and validating automated outputs.”

This evolution requires stronger critical thinking skills, deeper clinical understanding, and closer collaboration with CDI teams. Human expertise remains essential, particularly for complex cases and nuanced clinical interpretation.

Maintaining coding quality while improving throughput is also a constant balancing act. Organizations described challenges associated with auditing, where excessive quality checks create bottlenecks and delayed billing. The operational mindset must shift toward continuous vigilance.

To maintain both quality and financial performance, leading organizations are implementing more disciplined operational strategies, such as the following:

• Use targeted QA models: Focus audits on high-risk or high-value cases instead of applying blanket reviews.
• Monitor key metrics daily: Track discharged not final billed, discharged not final coded, and coding turnaround times in real time.
• Establish clear ownership of bottlenecks: Assign accountability when performance metrics trend in the wrong direction.
• Balance speed with compliance: Avoid overcorrecting with excessive auditing that slows revenue flow.
• Create feedback loops: Use audit findings and denial trends to drive ongoing education for coders and CDI teams.

These practices help organizations avoid the common trap of sacrificing revenue flow in the pursuit of perfect accuracy.

Finally, AI is rapidly becoming embedded in coding and CDI workflows. One study indicates that about half of organizations have already implemented AI-driven solutions in mid-revenue cycle workflows. Many are using AI to identify documentation gaps, suggest codes, and support prebill reviews.

“Our goal is not to replace the expertise of our coding and CDI team,” George explains. “It is to support and empower their work.”

AI introduces efficiencies but also requires human oversight. Coders and CDI specialists must validate outputs and ensure alignment with clinical documentation and coding guidelines.

Long-Term Resilience
The future of medical coding will be defined by greater integration across people, processes, and technology. Blended workforce models will continue to expand, supported by increasing adoption of AI and automation.

Organizations are also working to reduce administrative burden, automate repetitive tasks, and improve clinical workflows with new technological capabilities. The focus is shifting from efficiency alone to long-term resilience. Blended workforce models, AI-driven tools, and increasing operational complexity are reshaping how organizations approach coding.

For HIM professionals and coding leaders, success depends on the ability to navigate this change thoughtfully. That includes embracing new technologies, managing workforce transitions effectively, and maintaining a strong focus on quality and compliance. The environment is more challenging than ever, but it also presents an opportunity to build more agile and resilient coding operations for the future.

— Sabrina Yousfi, MBA, RHIA, CCS, CDIP, is president of mid-revenue cycle solutions for e4health. She is responsible for the management, oversight, and strategic direction of e4health’s mid-revenue cycle division, including all domestic and offshore labor pools. Yousfi has more than 20 years of experience in coding, auditing, clinical documentation improvement, revenue cycle, and management. Her background spans nationally ranked academic medical centers, trauma centers, and community hospitals.