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News: Study reveals overspending on U.S. billing and insurance paperwork

CMS says new date for ICD-10-CM/PCS implementation set for 2015.

Billing paperwork costs billions

Healthcare organizations spent approximately $471 billion on paperwork related to billing and insurance in 2012, with 80% of that potentially wasted, according to the study “Billing and insurance-related administrative costs in United States’ health care: synthesis of micro-costing evidence,” published in BMC Health Services Research.

Using a standard definition of “billing and insurance-related costs” (BIR), researchers found that physician practices spent approximately $70 billion, hospitals spent roughly $74 billion, and other institutions (e.g., nursing homes, home health care agencies, prescription drug, and medical supply companies) spent approximately $94 billion. Private insurers spent approximately $198 billion on BIR compared to $35 billion spent by government-sponsored health insurance programs.

Adopting a simplified, single-payer insurance system similar to Medicare could save the U.S. approximately $375 billion annually or more than $1 trillion in three years.

Editor’s Note: This article originally published in the HIM-HIPAA Insider.

Quick Tip: Use CMS regulations to back you up regardling legibility concerns

Physician signature legibility continues to be problematic.

Physician signature legibility continues to be problematic.

The legibility of physician documentation continues to be a concern. Even as facilities implement electronic health record systems, many others continue to struggle with paper records, printed attestation sheets, and other hard copy medical record reports. One of the principal concerns of the printed/paper world comes from famously illegible physician handwriting and perhaps most troublesome illegible physician signatures.

CDI professionals still battling this one out with their physicians, do have some supportive tools from CMS.

So when physicians challenge you, and ask “where does it say that my signature has to be legible?” (Let’s hope you never actually have to hear that said out loud, geez!) you can quickly print out these regulations and show them

The last link brings you to a page of related articles at the website. To find these links I simply accessed, clicked the tab for Medicare and then searched for information related to physician legibility.

This is a hot topic as we do not wish to lose reimbursement because we can’t read the handwriting or identify the signature. That is just lost money for no good reason.

TBT: Get with the (CDI) program, doc!

Editor’s Note: In social media memes Throw-back Thursday generally means sharing an old high school photo, something you wish had been left unpublished–like your 80s bouffant or 70s bell bottoms. We thought we’d pick up on the theme and occasionally go back into our CDI archives to highlight some salient CDI tid-bit. This week’s installment comes from the July 2012 edition of the CDI Journal.

Trey La Charite, MD

Trey La Charite, MD

by Trey La Charité, MD

We all agree: Better medical record documentation helps the patient, the physician, and the hospital. So why do we have so much trouble getting physicians to implement suggestions made by the CDI staff ? If your facility is anything like mine, provider compliance varies greatly. What always amazes me and our CDI specialists here is which physicians participate and which do not. Let’s look at some reasons why physicians choose not to adopt CDI goals and what remedies we might implement to gain wider acceptance of CDI principles.

First, the inescapable elephant in the room that must be effectively and decisively crushed is money. Unfortunately, the gut reaction of most doctors is that CDI is something that benefits only the hospital through an increased profit margin. While CDI professionals know this is not true, this initial reaction is understandable. After all, from where does the impetus for most CDI programs originate? The chief financial officer’s (CFO) office, of course! And, frequently, the CFO has jumped onto the CDI bandwagon because he or she learned how another facility improved their case-mix index (CMI) by implementing CDI  initiatives. Although the CMI is merely a reflection of how sick the patients are in a hospital, to a CFO, a higher CMI simply equals greater revenue.

Unfortunately, this means that your fledgling CDI program may have a public relations problem before it ever gets off the ground.

How do we remedy this problem? Education, education, education! The majority of doctors do not understand the increasing availability of their performance data to the general public, the insurance companies, and our government. Why is this important? Our government (via new Medicare payment rules) has  embarked on a strategy of healthcare reform through forced competition between healthcare providers. The theory is that patients will choose the doctors and facilities that have better outcomes and fewer complications at a lower cost.

Additionally, insurance companies and employers will intentionally steer their beneficiaries and employees toward the providers who display these same qualities. The ultimate question becomes whether new patients will want (after reviewing performance data on the Internet) or be able (through reduced copays to see the better providers) to be treated by your physicians in your hospitals. Yes, the probable short-term goal of any new CDI program is increased revenue at the CFO’s behest. The long term goal of all CDI programs is to ensure the flow of new patients through your doors through better performance data.

Guest Post: CDI benefits? Money, teddy bears, and more

Use teddy bear inspiration to promote your CDI efforts!

Use teddy bear inspiration to promote your CDI efforts!

By Vicki Sullivan Davis, RN

Doesn’t it burn you up when someone says that CDI programs are all about reimbursement? I can feel my face get red when I hear that statement! Of course, I remain composed, smile, and provide politically correct education to the individual. But deep down I have always wanted to say, “You are darn right CDI is about reimbursement! I work hard every day to make sure you and everyone else continue to have a place to work. I make sure our patients have the most updated equipment for imagining, the most advance surgical suites, a bigger emergency department, adequate nurses on the units, food to prepare, patients to see and E/Ms to bill!”

I want to say, “Yes, my job is to help make money for hospital and so is yours!” Every person in this industry needs be concerned with reimbursement; our survival depends on having money to provide resources for our patients! We provide for our futures through cost containment, efficiency monitoring, billing, staffing to volume, charging for supplies, and even decreasing the number of linens stocked in each room. All staff should be concerned with cost containment and revenue growth. CDI specialists are no different! Reimbursement is reimbursement, we just call it different things in different departments. Budgets, staffing, billing levels, supplies, etc.

Without bringing in adequate reimbursement, the hospital would have to close their doors despite anyone’s best efforts to control efficiency and quality. If we are not worried about reimbursement, we would not have the resources to provide services that are important to the community. We would not be able to sit and hold the hand of a dying patient. We would not be able to give out teddy bears to a scared child getting a chemo treatment. We would not be able to provide a warm blanket for a frail, confused, and aging patient. The impact of healthcare reform is so significant that we all must worry about the almighty dollar if we truly care about people.

But just because I say my job has an impact on reimbursement, doesn’t mean that I only focus on reimbursement.

The heart of our program focuses on the patient. As CDI specialists, making sure we capture severity of illness and risk of mortality (SOI/ROM) is essential, and the outcome of capturing SOI/ROM correctly happens to equate to reimbursement. CDI specialists are just charged with finding innovative ways to perpetuate our hospital’s future (for the patient’s sake!) So next time the next someone rants that your CDI program is “all about the money,” be proud he or she took time to notice your program, then smile and hand them a teddy bear.

Editor’s Note: Vicki Sullivan Davis is CDI manager at Cone Health System at Alamance Regional in Burlington, North Carolina, and past-speaker at ACDIS National Conference. Contact her at

TBT: Good E/M documentation is a win-win for physicians and CDI specialists

Glenn Krauss

Glenn Krauss

Editor’s Note: In social media memes Throw-back Thursday generally means sharing an old high school photo, something you wish had been left unpublished–like your 80s bouffant or 70s bell bottoms. We thought we’d pick up on the theme and occasionally go back into our CDI archives to highlight some salient CDI tid-bit. This week’s installment comes from the August 2010 edition of the CDI Journal.

The lifeblood of a physician is not his or her profile, quality scores, or the hospital’s DRG payment. It’s the physician’s own pocketbook—i.e., the E/M codes he or she reports. Good documentation is integral to the business of a physician’s practice. CDI specialists should think of themselves as the physician’s partners in business and be their eyes and ears in the medical record, says By Glenn Krauss, BBA, RHIA, CCS, CCS-P, CPUR, FCS, PCS, CCDS, C-CDI, independent consultant based in Burlington, Vermont.
Although Stark inducement laws prohibit CDI specialists from telling physicians how to bill, they can and should prompt physicians to provide good documentation in the record to support their billing, Krauss says. Many physicians report their own E/M codes simply by circling what they feel is the most appropriate level, often on a pocket card or electronic hand-held device. But this can lead to countless billing errors and take-backs from Comprehensive Error Rate Testing contractors and Medicare administrative contractors. That’s because many physicians don’t understand the three components that go into determining E/M levels and the documentation needed to support them.
Unless he or she has access to a computerized record, a physician typically does not document during patient interactions. Instead, he or she will document the encounter long afterward. A typical encounter between a physician and a patient might include the physician evaluating labs, speaking to a nurse, going to see the patient, assessing the patient, then documenting later on. There is the potential for much to be missed during this process, says Krauss.
“Physicians don’t take shortcuts in their practice of medicine, and they ask the patients these questions [regarding their medical history, etc.], but the fact of the matter is that they don’t always actually document what they’ve asked,” Krauss says.
He recommends that CDI specialists familiarize themselves with physician E/M billing. They should also review records with an eye on ensuring documentation of the three components of an E/M code. “A CDI specialist should be able to talk to the physician about these issues in an intelligent fashion,” he says.

Use PEPPER to identify problematic MS-DRGs and target CDI opportunities

Laura Legg

Laura Legg

By Laura Legg, RHIT, CCS

Some MS-DRGs are more complex and prone to error than others. What can facilities do to identify and manage these MS-DRGs that are prone to error?

One method for identifying error-prone MS-DRGs is through use of the Program for Evaluating Payment Patterns Electronic Report (PEPPER) report. The PEPPER report provides organizations with insight into potential vulnerabilities that may result in denied claims and recoupment. PEPPER short-term acute care hospital targets include:
  • Short stays
  • Three-day stays
  • Error-prone DRG assignments
Recovery Auditors also focus on DRG assignments and often request records for error-prone DRGs.
Facilities can use PEPPER data to identify outliers and act upon them. Data found in the PEPPER report is based on paid Medicare claims and has a ranking system that includes all organizations receiving Medicare payments. With this information, outliers can be identified. Medicare also provides a quarterly analysis of hospital-specific Medicare inpatient claims that are vulnerable to improper payment, including potential overpayments and underpayments.
Want to learn more about how to use PEPPER at your facility, check out these additional resources:
Editor’s Note: Laura Legg is director of health information management for Healthcare Resource Group in Renton, Washington. Email her at She has more than 25 years of experience in HIM and has served as an HIM Manager/Director for several acute care/critical access hospitals and a major hospital system. This article originally published on