Coding and Patient Financial Services—Creating a Healthy Revenue Cycle

Charlie M. Robinson, RHIT, CCS-P


For a health care organization to be successful, they must have an efficient revenue cycle process resulting in a healthy cash flow. Although there are numerous facets to the revenue cycle there are two key players that have a major effect on the revenue cycle. These two departments are the Patient Financial Services (PFS) and Health Information Management’s (HIM) coding department.

The relationship between PFS and coding has not always been the healthiest. Each department tends to point fingers at each other, blaming for coding and billing rejections or cash flow delays. The PFS department typically includes the registration department which plays another key role with the revenue cycle process.

It is very clear in any organization that these two departments must play well together. Let’s take a look at the relationship as it is today and where it needs to be!


The PFS department will typically call the coding department when a claim is rejected due to various reasons. When these phone calls come in the coding department may instantly be on the defensive. “Why is billing calling me? I’m the coder not them, ” is the normal thought a coder has. What the coding department sometimes fails to see is that the PFS is calling them because they are the coding experts. However, when PFS asks the coder if a specific code diagnosis is in the chart based upon an LMRP, the coders may become even more defensive.

The largest gap between these two departments is the knowledge level. For example, PFS is well trained in billing rules such as Local Medical Review Policies (LMRPs) or National Coverage Determinations (NCDs). These are two documents that coding rarely use and typically would not for up front coding which would result in minimal knowledge or understanding of these two documents. On the flip side of the coin, the coding department adheres strictly to official coding guidelines set forth by the governing parties. Additionally, coders will use National Correct Coding Initiative (NCCI) edits as a guide for coding surgical procedures. These are guidelines that the PFS department may know vaguely but not to the extent of the coding department.

The difference in coding and billing rules is the cause of most friction between these two departments.

Methods and History

With more than 10 years of coding and revenue cycle consulting, Charlie Robinson will discuss trends that he has seen that work and don’t work to create a healthy revenue cycle. The primary focus will be to review the relationship between the coding and PFS departments.

In addition, eleven hospitals were surveyed regarding the relationship between coding and PFS. These hospitals range from a critical access hospital (CAH) to a 1000 bed hospital. The results vary from the size of the facility and the dynamic of the two departments.

Trends and Discussion

It’s never too late to review the relationship between the coding and PFS departments to determine how an improved working relationship could positively affect the revenue cycle. Bottle necks can occur in may areas of the revenue cycle. Therefore, in addition to discussing the coding and PFS relationship we will discuss the entire revenue cycle and how these two departments are impacted by all areas of the revenue cycle. Outlined below are the key areas we will discuss and focus on:

  • Registration: Review the process of registration and medical necessity. Review if an ABN process is in place.
  • Ancillary Departments: Review if codes are populated in ancillary departments such as radiology and lab.
  • Charging: Review the Chargemaster process. Determine if charges (codes) are correct on charge slips. Discuss the importance of having a Chargemaster committee and the process for updating.
  • Coding: Discuss coding’s role in the revenue cycle process and how the preceding steps affect how coding may be done.
  • PFS: Review the steps taken by the PFS department to ensure that a “clean claim” is sent out the door and how registration through coding affects this process.
  • Payment Posting: Whew, we made it! Now that we have gone through all of the steps above, the PFS department must review final payment for posting and determine what, if any, is the patient’s responsibility.


Creating a long- lasting relationship that is positive between the PFS and coding department is essential for a healthy revenue cycle. Bottle necks may occur in the ancillary departments but they are readily identified in the PFS and coding areas. It is imperative that the PFS and coding department work together as a team to alleviate the coding and billing issues that may arise from any area of the organization.

The number one step to a streamlined cash flow is to ensure the coding and PFS departments are working well together. Once this occurs, a healthy revenue cycle is just around the corner!

Robinson, Charlie M. "Coding and Patient Financial Services—Creating a Healthy Revenue Cycle." 2007 AHIMA Convention Proceedings, October 2007.