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AI in Medical Coding Market Shares and Growth by 2032

AI in Medical Coding Market Size Envisioned at USD 7.15 Billion by 2032

Status: Published Category: Healthcare IT Insight Code: 5090 Format: PDF / PPT / Excel

"The global AI in medical coding market size is estimated to grow from USD 2.06 billion in 2022 to surpass around USD 7.15 billion by 2032, expanding at a CAGR of 13.3% between 2023 and 2032, as a result of the rising demand for advancing technologies."

AI in Medical Coding Market Size 2023 - 2032

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Report Highlights:

  • North America dominated the AI in medical coding market in 2021 and the Asia Pacific region is projected to exhibit the fastest growth rate.
  • The U.S. medical coding market is a huge market with a 30% shortage of medical coders nationwide.
  • AI in medical coding market holds immense potential due to heightened accuracy and large volume data.

According to a recent American Health Information Management Association (AHIMA) survey, 85% of healthcare organizations reported increased coding efficiency after implementing AI-based solutions.

AI has revolutionized medical coding by automating the coding process, reducing errors, and increasing efficiency. AI-powered coding tools use natural language processing (NLP) and machine learning algorithms to analyse medical records, identify relevant codes, and assign them automatically. AI coding tools can also learn from previous coding decisions, gradually improving accuracy. AI coding tools can process vast amounts of data faster than human coders, reducing the time and cost of medical coding. There are numerous advantages to using AI in medical coding.

AI coding tools can also reduce medical coding error rates, ensuring accurate and consistent documentation. AI coding tools can reduce the time and cost of medical coding, allowing healthcare providers to better allocate resources. Third, artificial intelligence coding tools can improve patient outcomes by detecting trends and patterns in medical data, allowing for early detection and intervention.

AI is transforming the medical coding landscape by providing solutions to improve productivity and accuracy:

  • AI-powered tools analyze medical records and suggest appropriate codes, assisting coders in their work and reducing manual effort.
  • Natural Language Processing it helps coders extract essential information from clinical notes by interpreting unstructured data.
  • Predictive analytics is AI algorithm predict potential coding errors or areas require clarification, addressing issues before they arise and improving overall accuracy.

The use of AI in medical coding has significantly reduced error rates.  Advanced machine learning algorithms detect patterns and nuances in medical documentation, reducing the possibility of coding errors. This accuracy not only improves the quality of patient records, but it also reduces the financial risk associated with coding errors. According to reports, the integration of AI system in healthcare facilities  has resulted in a staggering 30% reduction in coding errors.

Furthermore, AI can contribute to the cost saving by optimizing workflow and reducing need for repeat imaging. The potential for improved patient outcomes and operational efficiency has driven increased investment and partnership in the AI medical imaging sector, fostering market expansion on global scale.

AI in Medical Coding is Experiencing Significant Growth Due to Heighten Accuracy and Large Volume Data

Efficiency gains arise from the overwhelming increase in data volume driven by electronic health records and digital health technologies. AI systems process large datasets quickly, enabling more efficient coding. This saves time and helps healthcare providers manage the growing volume of patient data effectively. Scalability is crucial as healthcare data continues to expand. AI solutions can scale to handle large datasets without a proportional resource increase, accommodating expanding patient populations and increasing health information.

The adaptability of AI to changes in coding guidelines and regulations is a key advantage. AI systems can adjust rapidly, ensuring healthcare providers remain compliant with the latest standards and reducing the risk of non-compliance penalties. Quality assurance is enhanced through AI in medical coding, acting as a valuable tool for cross-referencing coded data against benchmarks and standards. This contributes to overall quality improvement in medical coding processes.

The accuracy and efficiency gains AI offers make it a valuable solution for handling the increasing volume of medical data. As the healthcare industry undergoes digital transformation, AI ensures precise and timely coding, ultimately benefiting healthcare providers, payers, and patients.

Impact of COVID-19, which Rises Demand for AI in Medical Coding

The pandemic increased the demand for telehealth and digital health services, necessitating efficient and real-time coding. AI solutions were critical in providing accurate coding for virtual consultations and remote monitoring, helping telehealth initiatives succeed. The increased reliance on AI in medical coding has raised concerns about patient data security and privacy. Ensuring compliance with data protection regulations, particularly in remote work and telehealth, becomes a major priority, resulting in significant investments in data security and privacy measures. The integration of AI in medical coding has played a pivotal role in responding to the evolving demands of healthcare information management during these times.

For Instance,

  • In April and September 2020, the World Health Organization introduced new ICD-10 codes, specifically addressing COVID-19 and telehealth-related issues. These additions reflected the dynamic nature of the healthcare landscape and emphasized the necessity for an adaptable coding system to address emerging health challenges.
  • In 2022, according to NIH, The demand for AI in medical coding driven by the impact of COVID-19, is evident in the notable increase in its use in revenue cycle management. Introducing the new ICD-11 has enhanced flexibility and scalability, featuring approximately 55,000 codes to classify various health conditions. This revision supports Electronic Health Record (EHR) integration, aligning with the evolving landscape of healthcare information management.

In the era of technological advancement, the medical coding domain experiences positive market growth, driven by increased demand due to the pandemic. This surge leads to substantial revisions and code additions, elevating certified medical coders to high-demand professionals. The widespread adoption of a standardized language in medical documentation underscores the pivotal role of medical coders in managing comprehensive healthcare data.

  • In 2020, Optum Healthcare invested nearly $100 million in social impact, expanding its affordable housing tax credit portfolio within the AI-driven medical coding landscape.

Concerns about Data Privacy and Safety Posed Challenges to the Growth of AI in Medical Coding

The impediments AI faces in the medical coding market due to data privacy and security concerns reflect a multifaceted challenge that extends beyond technological consideration. Integrating artificial intelligence into healthcare systems introduces a critical need for carefully handling sensitive patient information. The significance of this challenge is underscored by the nature of healthcare data, which often includes highly confidential patient records. Maintaining a robust and secure environment is imperative in light of the potential consequences of data breaches or unauthorized access. Beyond compromising patient confidentiality, such an incident can violate legal regulations governing health information, with potential legal and financial repercussions for healthcare providers and organizations.

Additionally, the integration of AI in medical coding further amplifies these concerns due to the automation and analysis of vast amounts of patient data. Ensuring that AI algorithms comply with stringent privacy standards and are resilient to potential cyber threats is a complex undertaking that demands ongoing vigilance. The need to adhere to evolving regulations, such as the Health Insurance Portability and Accountability Act (HIPAA) in the United States, adds a layer of complexity, necessitating continuous efforts to stay abreast of compliance requirements and ensure the responsible use of AI.

Furthermore, ethical considerations are also important in navigating the challenges of AI in healthcare. Concerns about the transparency of AI algorithms, the possibility of bias in automated decision making processes, and securing equitable accessibility to medical services for all segments of the population add to the complexities of the issues at hand. Striking a delicate balance between the promise of improved efficiency and diagnostic accuracy offered by AI medical coding and the need to protect patient information and uphold ethical standards is a complex task that necessitates comprehensive strategies and ongoing collaboration among technology developers, healthcare providers, regulatory bodies, and ethicists.

Rising Demand for Advancing Technologies

The infusion of artificial intelligence (AI) and machine learning (ML) into medical coding marks a pivotal advancement, introducing transformative possibilities for the healthcare industry. AI-assisted coding systems, powered by intricate algorithms, revolutionize the analysis of extensive medical data, yielding a spectrum of advantages.

Additionally, the integration addresses the imperative of precision in healthcare by significantly refining medical coding accuracy. Leveraging the prowess of AI and ML in pattern recognition and data analysis, these systems become indispensable in ensuring meticulous patient care and billing processes. Moreover, the automation inherent in AI mitigates the risks associated with human errors in traditional coding methods, averting billing discrepancies and potential complications in patient care.

AI-driven coding systems streamline workflows, expediting the analysis and coding of medical records. This accelerates the coding process and liberates healthcare professionals to dedicate their expertise to more intricate tasks. The cost-effectiveness of AI-assisted coding contributes to overall operational efficiency, reducing the need for extensive manual coding efforts and minimizing errors, thereby translating into substantial savings in time and resources.

Furthermore, the scalability of AI and ML technologies becomes crucial as healthcare data burgeons exponentially. These technologies adeptly handle the dynamic and expanding nature of the healthcare industry, ensuring the efficacy of the coding process amid increasing volumes and complexities of medical data. The adaptability of machine learning algorithms in AI-assisted coding systems further cements their value, allowing continuous learning and evolution based on new coding guidelines, regulatory changes, and emerging medical practices. Integrating AI and ML enhances accuracy and efficiency. It presents novel avenues for growth in the medical coding market, offering healthcare organizations a comprehensive toolkit for improved processes, reduced errors, cost savings, and adaptability to the evolving healthcare landscape.

The Significant Growth of AI in Medical Coding Market is Due to the Expansion of Medical Billing Companies

The adoption of AI in medical coding market is increasing noticeably, owing mainly to the contribution of medical billing companies. Incorporating artificial intelligence (AI) technologies into medical coding processes improves efficiency, accuracy, and overall performance in healthcare billing operations. Medical billing companies are using AI to streamline and automate coding tasks, reducing manual workload and the risk of errors. AI algorithms can quickly analyze large amounts of medical data, identify relevant codes and ensure coding standards are followed. This speeds up the coding process and improves accuracy, resulting in more precise patient billing. The mutually beneficial collaboration between AI-driven medical coding and medical billing companies is helping healthcare organizations improve their financial outcomes. Automating coding tasks by AI systems aids cost-cutting efforts by preventing overbilling and underbilling.

Additionally, integrating AI technologies in medical coding aligns seamlessly with the advanced capabilities of automated billing systems and electronic health records, further optimizing workflow efficiency.

The medical coding market is expanding as medical billing companies continue to be AI-driven. This trend will continue as the demand for accurate, efficient, and technologically advanced coding processes remains high in the evolving healthcare system landscape. Collaboration between AI  and medical billing companies is the key driver shaping the medical coding market's future trajectory.

Geographical Landscape

In 2022, North America dominated the AI in medical coding market, a trend expected to continue throughout the forecast period. North America makes significant R&D investments, particularly in the healthcare and artificial intelligence sectors. This investment fuels innovation and the advancement of artificial intelligence(AI) applications in various medical fields, including medical coding. Capital is readily available in the region for startups and technology firms. This funding encourages the growth of AI startups specializing in healthcare, such as medical coding solutions. North American healthcare institutions, technology companies, and startups frequently collaborate on AI projects. These alliances promote medical coding solutions.

For Instance,

  • The American Cancer Society predicted 1,918,030 new cancer cases in the United States alone in 2022, necessitating efficient hospital billing procedures. As a result, demand for medical coding services is expected to rise, propelling regional market growth.

Rate of Breast Cancer Incidence (2015-2019) and Mortality (2016-2020) in U.S.

In the evolving landscape of AI in medical coding across Europe, key countries such as the UK, Germany, and France are at the forefront of adoption. These nations showcase a strong commitment to embracing technological advancements in healthcare. Advances in healthcare technology propel the growth in this market play a pivotal role. The integration of artificial intelligence in medical coding not only enhances accuracy. This technology allows healthcare providers to optimize resource allocation and focus on better patient care. There is a notable push towards digitization within the healthcare sector. Electronic Health Records (EHRs) create a conducive environment for AI applications. Medical coding, a crucial aspect of healthcare data management, benefits from this digital transformation, enabling quicker access to information and facilitating interoperability. Europe sees rapid evolution in AI in medical coding market driven by technological advancements and a digital healthcare push; the journey is not without obstacles. Navigating diverse regulatory landscapes and addressing data privacy concerns are critical aspects influencing the pace and success of implementation across the continent.

Throughout the forecast period, Asia Pacific is expected to have the fastest growth in the AI in medical coding market. Asia Pacific, which includes countries such as China and India, has experienced rapid economic growth. As a result, healthcare expenditures have risen, increasing demand for advanced technologies such as AI in medical coding. The Asia-Pacific region is home to a sizable proportion of the global population. This, together with the high prevalence of various disease, has resulted in an increasing demand for effective healthcare solutions. In large healthcare systems, artificial intelligence in medical coding can help streamline administrative task and ensure accurate billing and coding.

Competitive Landscape

The competitive landscape in the medical coding market is dynamic, with several key players dominating the industry. Companies such as Optum and 3M information systems are prominent players, offering comprehensive medical coding solutions. Technological advancements, regulatory changes, and the increasing demand for accurate coding in healthcare settings influence the industry. Continuous innovation and compliance with evolving coding standards further characterize the competitive landscape.

Recent Developments

  • In 2023, Clinion one of the key healthcare technology companies, has launched an AI-powered medical coding solution designed specifically for clinical trials. This outstanding service significantly improves the efficiency, precision, and speed of medical coding in clinical trials. Advanced AI algorithms quickly decipher and interpret massive amounts of clinical trial data, extracting relevant information and allocating appropriate codes, significantly reducing the time and effort required for coding tasks.
  • In 2021, AGS Health, a leader in revenue cycle management solutions for major healthcare providers across the United States, will acquire EZDI, a leader in modernizing computer-assisted coding(CAC)  to support healthcare providers with revenue cycle management. 
  • In 2021, Athenahealth launched Medical Coding Solution, an EHR Coding solution that reduces clinician coding-related work and, as a result, clinician burnout.

Market Players

  • 3M Health Information System
  • Nuance Communications
  • TruCode LLC
  • Optum
  • Cerner corporation
  • Aviacode
  • Olive AI
  • Medicodio
  • Fathom, Inc.
  • Wolters Kluwer Health

Market Segments

By Components

  • In-House
  • Outsourced

By End User

  • Healthcare Providers
  • Medical Billing
  • Companies
  • Payers

By Geography

  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • The Middle East and Africa

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About The Author

Namrata Bukshet is not just a market researcher; she is a detective, a storyteller, and a champion for healthier lives. Her journey began with a Bachelor of Pharmacy degree and a thirst for knowledge that led her to pursue a Post Graduate Diploma in Pharmaceutical Management. Her curiosity for consumer behaviour and market trends burned bright. She delved deep into the world of lifestyle disorders, conducting extensive research that sheds light on the intricate dance between personal choices and societal pressures. This exploration culminated in a groundbreaking paper on E-Biz: Indias 1st G2B Online Portal, presented at an international conference, where her insights resonated with a global audience. But Namrata has impact extends far beyond a single paper. Her expertise has shaped the very landscape of market research and pharmaceuticals. Her keen eye for detail and unwavering commitment to understanding the why behind consumer behaviour have made her a sought-after professional in the industry. She is the decoder ring that unlocks the secrets hidden within data, the translator who turns complex trends into actionable insights. As she continues to unravel the mysteries of consumer behaviour, she paves the way for a future where healthcare is not just about treatment but about understanding the why and building a bridge to a healthier world, one insightful discovery at a time.


The use of artificial intelligence technologies in medical coding involves the automation and enhancement of assigning standardized codes to medical diagnoses, procedures and services. The conversion of healthcare procedures, diagnoses and services into alphanumerical codes is known as medical coding. These codes are required for billing, insurance claims, and preserving electronic health records (EHRs). Human coders perform time-consuming and intricate tasks in traditional medical coding. It necessitates a thorough understanding of medical terminology, anatomy, and various coding systems such as ICD-10 CM, CPT and HCPCS. Human coders may encounter issues such as errors and slower processing speeds. 

In January 2022, the dominance in the market for AI in medical coding is influenced by several countries. The United States has been a significant player in adopting and implementing AI technologies in healthcare, including medical coding. Companies and healthcare institutions in the U.S. often lead in the development and adoption of AI solutions for medical coding and related processes. However, the landscape is dynamic, and other countries, including China, India, and some European nations, are actively investing in AI for healthcare applications and contributing continuously which result global market of AI in medical coding is rises.

Integrating advanced technologies, such as artificial intelligence and machine learning, streamlines medical coding processes, reducing errors and improving efficiency. The rising prevalence of chronic diseases worldwide results in a higher volume of medical procedures and services, necessitating accurate coding for proper reimbursement and the importance of standardised coding for interoperability.

World Health Organisation, National Institute of Health, Academy of Medical Coders India,,