simpcity Every risk adjustment leader has heard the pitch for concurrent coding. Review charts within days of encounters, capture HCCs while documentation is fresh.
It sounds great. Then you try to model the costs and realize you can’t afford to review every chart concurrently.
Here’s the cost model that answers whether you can actually afford it.
The Full-Time Equivalent Reality
Concurrent coding requires dedicated staff. You can’t do concurrent as a side project for coders who also handle retrospective workload.
Why? Because concurrent work is time-sensitive. If a hospital discharge happens on Tuesday, that chart needs review by Thursday.
Calculate FTE requirements based on encounter volume and complexity.
If you’re targeting 2,000 encounters per month for concurrent review, and each encounter takes 20 minutes to code and query, that’s 667 coder hours per month. Divided by 160 work hours equals 4.2 FTEs.
Add 30% for QA, queries, rework, and overhead. You’re at 5.5 FTEs to handle 2,000 concurrent encounters monthly.
At $70,000 per coder annually, you’re looking at $385,000 in labor costs just for coding staff.
The Technology Stack Costs
Concurrent coding has specific technology requirements that retrospective coding doesn’t.
Real-time encounter feeds from your EHR. Budget $50,000-100,000 for implementation, plus $20,000-40,000 annually for maintenance.
Fast chart retrieval. Same-day retrieval might require upgrading contracts or building direct EHR integrations. Budget $30,000-60,000 annually.
Workflow automation to route encounters to coders automatically. Budget $75,000-150,000 for development if building custom.
Provider communication tools integrated into the platform. Budget $15,000-25,000 annually.
Total technology costs: $100,000-200,000 in year one, $65,000-125,000 annually thereafter.
The Provider Time Investment
Concurrent coding increases provider burden. You’re asking them to respond to queries within 24-48 hours.
Estimate provider time impact: if you’re sending 500 concurrent queries per month and each takes providers 5 minutes to respond, that’s 42 provider hours monthly. At an average provider value of $150/hour, that’s $6,300 monthly or $75,600 annually.
The Opportunity Cost
Here’s the hidden cost: what else could you do with those resources?
If you’re spending $385,000 on concurrent coding staff, what if you spent that on retrospective coding staff instead? You could hire 5.5 retrospective coders who could review significantly more charts.
Or what if you spent that money on provider education to improve documentation at the source?
Concurrent might still be the right choice, but you need to acknowledge the opportunity cost.
The Incremental Revenue Calculation
How much incremental revenue does concurrent generate?
Conservative assumption: concurrent coding captures 25% more HCCs than you would have captured through retrospective review alone.
If you’re concurrently reviewing 2,000 encounters per month and each encounter has an average of 0.5 incremental HCCs available, you’re capturing 1,000 HCCs monthly.
If 25% of those (250 HCCs monthly) wouldn’t have been captured retrospectively, and the average HCC value is $3,000, your incremental revenue is $750,000 monthly or $9 million annually.
More conservative: assume only 15% incremental capture because your retrospective program is already pretty good. That’s 150 HCCs monthly, $450,000 monthly, $5.4 million annually.
Even at the conservative estimate, you’re spending ~$500,000 all-in to generate $5.4 million incremental revenue. That’s a 10.8x return.
But those assumptions need to be grounded in your actual data.
The Pilot Economics
Most organizations can’t afford to go all-in immediately. Start with a pilot.
Pilot concurrent for hospital discharges only. That might be 400 encounters monthly instead of 2,000. Your labor costs drop to 1-1.5 FTEs ($70,000-105,000 annually).
Total pilot costs: ~$200,000 annually.
If those 400 monthly encounters generate 200 incremental HCCs monthly at 15% incremental capture, that’s 30 incremental HCCs monthly worth $90,000 monthly or $1.08 million annually.
That’s a 5.4x return on a pilot, which justifies expansion.
The Break-Even Analysis
At what volume does concurrent coding become economically viable?
Fixed costs (technology, infrastructure): ~$100,000 annually Variable costs (labor): ~$70,000 per FTE
Each FTE can handle ~350-400 encounters monthly (20 minutes per encounter).
For concurrent to break even, each FTE needs to generate enough incremental revenue to cover their $70,000 cost plus their portion of fixed costs (~$15,000 per FTE).
Each FTE needs to generate $85,000 incremental revenue annually.
At $3,000 per HCC, that’s 28 incremental HCCs annually per FTE, or 2.3 incremental HCCs monthly.
If each FTE handles 400 encounters monthly and needs 2.3 incremental HCCs to break even, they need a 0.6% incremental capture rate above retrospective.
That’s achievable. Most concurrent programs see 10-20% incremental capture, which means each FTE generates 40-80 incremental HCCs monthly, far exceeding break-even.
What Actually Works
Concurrent coding can be highly profitable, but only if you model costs honestly and set realistic expectations.
Start with a pilot. Target high-value encounters. Model costs conservatively: FTE requirements, technology, provider time, opportunity cost. Model benefits conservatively: assume lower incremental capture than vendors promise.
If the economics work at conservative assumptions, proceed. If they only work at optimistic assumptions, reconsider.
Too many organizations launch concurrent based on vendor promises and vague ROI estimates, then discover the program is more expensive and less impactful than expected. Do the math first.
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