Medical coding and billing firms in India bill overseas providers and billing companies for work delivered entirely online, which makes them service exporters under the FEMA (Export and Import of Goods and Services) Regulations, 2026. Every monthly invoice to a foreign client, whether priced per chart, per FTE or as a share of collections, goes on one EDF for that month, submitted to your AD bank within 30 days from the end of the month. Volume-based pricing makes the numbers move, so the habit to build is matching each EDF row to a final, issued invoice.
Key takeaways
- One EDF per month covers all clients; each invoice is a row in Part 2B.
- Delivery mode is "Internet": charts, claims and reports move through client systems or secure portals.
- Pricing models (per chart, per claim, FTE, percentage of collections) change the invoice amount, not the EDF process.
- SAC and purpose codes for revenue cycle work are not one-size-fits-all. Confirm both with your CA and bank.
- Many coding invoices fall under ₹10 lakh, so periodic realisation declarations can close EDPMS entries with less paperwork.
Typical pricing models and how they hit the EDF
| Pricing model | How the invoice is built | EDF point to watch |
|---|---|---|
| Per chart or per encounter | Charts coded in the month × rate | Invoice only once volumes are final; list the final amount |
| Per claim submitted | Claims processed × rate | Same; avoid "provisional" invoices you later replace |
| FTE or dedicated team | Number of coders × monthly rate | Stable amounts; easy to forecast |
| Percentage of collections | Agreed percentage of what the provider collected | Invoice after collections are known; adjustments via credit or debit notes |
| Hybrid | Base FTE fee plus per-chart overflow | Either one combined invoice or two; each invoice is one row |
The percentage-of-collections model needs the most care. If you invoice an estimate and then true it up, the EDPMS entry will reflect the original amount while the client pays a different one. Wherever possible, invoice the confirmed figure. If an adjustment is unavoidable, issue a proper credit or debit note and tell your bank. Our article on credit notes, discounts and short payments explains the knock-on effects.
Filling Part 1 for a coding business
Most Part 1 fields are routine:
- 1.1 Type of export: Services. If you also license your own coding software, that portion may be "Software"; ask your bank how to split.
- 1.4 Mode of delivery: Internet.
- 1.5 Category of exporter: "Others" for a normal domestic company, or SEZ if your delivery centre sits in one, in which case the EDF goes to the SEZ Development Commissioner instead of the bank.
- 1.12 Mode of realisation: usually "Others" for direct transfers.
- 1.21 Description: something plain like "Medical coding and revenue cycle support services".
Codes: SAC and purpose
Revenue cycle work sits at the boundary of several service categories: business support, data processing, and in some cases accounting-type work for billing. The right SAC depends on what your contract actually says you do. Run your description through the SAC code finder to shortlist, and get your CA's sign-off before you put a code on hundreds of rows.
Purpose codes work the same way. Your bank will report each inward remittance under an RBI purpose code, and medical coding has no single obvious match among the common codes. Agree the code with your bank once, then ask clients to reference invoice numbers so every payment is tagged consistently. Our purpose codes guide explains how codes are chosen.
A worked example
Veda Health Ops Pvt Ltd in Chandigarh codes and bills for three US clients. Its December 2026 invoices:
| Invoice | Client | Pricing basis | USD | INR value |
|---|---|---|---|---|
| VHO/1201 | Cedar Valley Physicians Group | 4,200 charts × USD 2.10 | 8,820 | ₹7,37,000 |
| VHO/1202 | Lakeshore Billing Partners LLC | 9 coders × USD 1,450 | 13,050 | ₹10,90,000 |
| VHO/1203 | Summit Ortho Associates | 6% of collections, November | 3,975 | ₹3,32,000 |
Veda files one EDF for December with three rows and ₹21,59,000 in field 1.22. December invoices are due by 30 January 2027.
The collections-based invoice was raised only after Summit confirmed November collections on 12 December, so no true-up is needed. Two invoices are under ₹10 lakh and can be closed on Veda's quarterly realisation declaration once paid. VHO/1202 exceeds ₹10 lakh, so Veda will send the bank the invoice, FIRA and matching instructions when Lakeshore pays.
When a client pays one lump sum for several invoices
US billing companies sometimes pay several months together. If Lakeshore pays USD 39,150 in March covering December, January and February invoices, the bank sees one remittance against three EDPMS entries across three EDFs. Send matching instructions listing each invoice number and amount so the bank can apportion the receipt correctly.
Realisation: watch the slow payers
Each invoice must be fully paid within 9 months from its own date, or 12 months for rupee invoices. Healthcare clients sometimes pay slowly, especially where your fee depends on their own collections. Track your oldest open invoices monthly. If one is heading past seven or eight months, chase the client and, if needed, ask your bank for an extension with reasons before the deadline.
| Invoice date | 9-month realisation deadline |
|---|---|
| 15 October 2026 | 15 July 2027 |
| 20 November 2026 | 20 August 2027 |
| 10 December 2026 | 10 September 2027 |
GST, LUT and data contracts
Coding and billing services to an overseas provider are typically zero-rated exports if all five Section 2(6) IGST conditions are met. Most firms export under LUT, with invoices stating "Supply meant for export under LUT without payment of IGST". The EDF is a FEMA declaration and does not change GST or income-tax obligations.
Your client contracts will likely carry data-protection obligations under the client's own laws. Those do not affect the EDF, but contract numbers and dates do go in Part 2B, so keep the signed master agreement and any statements of work easy to find. This is general information, not legal or tax advice.
Frequently asked questions
Do medical coding companies need to file an EDF?
Yes, if they are companies, LLPs, firms or proprietorships billing foreign clients for invoices dated on or after 1 October 2026. File monthly with your AD bank, or with the SEZ Development Commissioner if your unit is in an SEZ.
How should per-chart invoices appear on the EDF?
As one Part 2B row per invoice, showing the final invoice amount. You can put the chart count and rate in the description or remarks column. Avoid provisional invoices that get replaced later.
What if my fee is a percentage of the client's collections?
Invoice after the collections figure is confirmed where you can. If you must invoice an estimate, document any adjustment with a credit or debit note and inform your bank so the EDPMS entry closes at the right value.
Which purpose code applies to medical coding receipts?
There is no single obvious code among the common ones. Agree the code with your bank, apply it consistently, and correct any remittance tagged under the wrong code promptly.
Can one payment cover invoices from different EDFs?
Yes. Clients often pay several invoices together. Give your bank matching instructions listing each invoice and amount so the receipt is applied to the right EDPMS entries.
Bottom line
For coding and billing firms, the EDF is a monthly list of final client invoices, however each one was priced. Lock down your codes, invoice confirmed volumes and track realisation monthly. The free EDF form generator builds the Part 2B rows, and the EDF due dates table shows every deadline.
This guide is general information for Indian businesses, not legal or tax advice. Rules and bank processes change — confirm specifics with your AD bank or chartered accountant.