The clash of clinical vs. coverage/payment concerns

by Trey La Charité, MD

Auditors are increasingly looking at medical necessity denials but shouldn't the physician make the decision about whether the patient needs to be admitted?

In the aggressive post-discharge auditing environment where I now find myself practicing medicine, I and my colleagues are subject to heavy scrutiny by CMS and private insurers. Observation versus inpatient status review is the new focus of these non-clinician auditors and has become the reason for the vast majority of my facility’s denials. This new auditing pressure we all face stems from the completely noble idea that reductions in fraud, abuse, and improper payments will preserve resources for those who truly need medical care. Sadly, as with many commendable aspirations, the execution is poor and often produces a dismal result.

As the physician advisor for CDI, I have been diligently educating every physician at my institution about ensuring the medical necessity of our inpatient admissions. But while CMS asserts that the admitting physician is solely responsible for status selection (i.e., inpatient, outpatient, or observation status), admission status for the physician has no clinical  relevance. Physicians do not recognize “conditional” or “partial” admissions, which observation status implies. As far as physicians are concerned, their patients either medically need something or they don’t.

The rules concerning inpatient versus observation status selection are not newly created; CMS’ vague guidelines for
appropriate status selection have been around for years. The difference is that CMS and other payers suddenly discovered that they can extend their existing financial resources by “enforcing” those rules. Payers and their related auditing agents have traditionally avoided the question of whether a patient actually needed the medical care that was provided. Instead, they simply point to inappropriate status selection and deny the associated claim. The issue is whether physicians should be contemplating a patient’s admission status at all.

Editor’s Note: This article is an excerpt from the quarterly publication for ACDIS members the CDI Journal. La Charité is a hospitalist and physician advisor for CDI and coding at the University of Tennessee at Knoxville, and an ACDIS Advisory Board member. Contact him at Clachari@UTMCK.EDU.

Incorporate awareness of transfer DRGs into CDI record review efforts

CMS never met a dollar it didn't want back.

CMS never met a dollar it didn’t try to recoup. So we have RACs and HACs and stacks of regulatory requirements that take many, many healthcare dollars to manage. The post-acute care transfer DRGs are but one example.

(RACs, of course, are Recovery Audit Contractors which the government recently renamed Recovery Auditors or the Recovery Audit Program. And I’m sure you all know that HACs stands for hospital acquired conditions.)

For the uninitiated, post-acute care transfer DRGs exist because CMS doesn’t want to pay the hospital the full freight if the patient receives follow-up care somewhere else, and it ends up having to pay the another facility or healthcare agency (such as home health) as well. When the program began, 10 DRGs were designated as transfer DRGs; that list has since expanded to 273.

You can download the current list here.

Why do you need to know about transfer DRGs?

The CDI specialist is one of the few people who has at least a general idea of where the DRG is going to land before the patient is discharged. As you know, every DRG is attached to both an arithmetic length of stay (A/LOS) and a geometric length of stay (G/LOS). The A/LOS is the average LOS of patients within that DRG, including transfers and long-stay outliers. The G/LOS is the national mean length of stay for that DRG, except for transfers and long-stay outliers. The A/LOS is used for calculating outlier payments, while the G/LOS determines the transfer DRG payments. If you don’t have a good idea of the DRG before you transfer the patient or discharge the patient with services, your facility’s number crunchers could have an unpleasant jolt at reimbursement time.

When a patient is transferred to another facility or home with services after staying fewer days than the transfer DRG’s G/LOS, the post-acute care transfer DRG rule kicks in. Instead of receiving the full DRG reimbursement (relative weight multiplied by the hospital’s blended rate), a per-diem rate applies. The per-diem rate is the DRG reimbursement divided by the G/LOS. The hospital will receive twice the per-diem rate on day one and the per-diem rate every day thereafter up to the full DRG reimbursement.

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Asset or Liability: How do you describe your CDI program?

A recent discussion on the ACDIS CDI Talk list serve provoked me to ponder: Is your program truly an asset

Don't use measuring tape to determine your CDI program success.

to your organization? Does it promote complete and accurate clinical documentation reflective of patient severity of illness (SOI), medical complexity and quality outcomes that justify the costs of care? Or is your program really a liability to the organization?

The CDI Talk discussion asked how programs calculate their return on investment (ROI). One response pointed out that any monthly report of CDI case mix change and financial reimbursement effectiveness must include a disclaimer informing readers about the fact that such data is subject to adjustment for transfer DRGs provisions inherent in the inpatient prospective payment system (IPPS). So, here’s my two-cents on the issues raised.

Another adjustment to consider

An effective CDI program can be a significant asset or a significant liability depending upon how the program is initially structured, set up, rolled out, and carried forward with daily CDI activity. Unfortunately, a majority of CDI programs center their metrics (proof of their ROI) on increased financial reimbursement to the hospital. This takes away from the overall potential of the CDI program for the hospital as well as the physicians. That’s because this narrow focus on reimbursement positions CDI programs as revenue enhancement programs. It forces CDI specialists to focus on the capture of CCs/MCCs and “more specific” principal diagnosis. And this, in turn increases risk and liability for the hospital.

Consider the following common analysis conducted by CDI programs to prove their effectiveness:

• Number of queries left by the CDI
• Number of queries that change the principal diagnosis
• Number of queries that add a CC/MCC
• Number of physician queries responded positively to by the physician
• Number of physician queries not responded to by the physician
• Number of queries left in the record which the physician did not agree to clarify/add documentation
• Potential capture rate of monthly CC/MCC not obtained due to physician disagreement
• Change in monthly case-mix-index
• Time from admission until record was reviewed and DRG worksheet completed
• Average number of times a record was reviewed per admission

While reviewing these statistics can provide insight into a CDI program’s success, commitment to these types of matrices as the sole indicators of a program’s success can stymie a program.

A primary goal of CDI professionals is to improve overall clinical documentation in the record for purposes of accurate, concise, and effective reporting of patient acuity/SOI, physician clinical judgment, medical decision making, and resource consumption through specificity in documented diagnoses.

One of many “by-products” of this stated goal of CDI is that the resulting reimbursement more closely approximates the care provided. However, strict focus on financial reimbursement benchmarks creates incentives for staff to omit queries that don’t affect payment or increase queries for conditions that do. This, ultimately, artificially creates a rosy ROI picture for the CDI program. It also increases financial risks as auditors data mine, down-code, deny, and ultimately take back reimbursement from erroneously documented and coded cases.

Now you see it, now you don’t

In my experience, many a RAC denial is fundamentally related to CDI program deficiencies. Often a query results in the physician documenting a diagnosis in the record just once. The query may have asked the physician to clarify the principal diagnosis, secondary diagnosis, or sought to add a CC/MCC to the record.

These queries frequently include:

• Aspiration vs. community acquired pneumonia
• Sepsis with change in mental status vs. sepsis with acute encephalopathy
• COPD exacerbation with hypoxemia vs. COPD exacerbation with acute-on-chronic respiratory failure

The physician may respond to the query by including the specified diagnosis or diagnoses in his/her next progress note yet not include these same diagnosis specificity in the continued care progress notes and discharge summary. According to our previously discuss benchmarks, the CDI manager counts the physician’s response as a “win,” and moves on to the next chart review.

The physician’s conclusory diagnostic statement without accompanied discussion of pertinent clinical facts and information constitutes insufficient documentation from an “outsider’s review” perspective. The RAC or other third-party payer retrospective reviews frequently down-code or deny these claims due to such documentation deficiency.

Effective CDI programs should incorporate more than financial measures in their program benchmarking.  Clinical documentation beyond mere diagnostic conclusory statements supporting clinical presentation of the patient as well as the clinical facts of the case is essential for revenue integrity and continuity of care. Consider the following found in the most recent Statement of Work for the RAC:

“Clinical validation is a separate process, which involves a clinical review of the case to see whether or not the patient truly possesses the conditions that were documented. Clinical validation is beyond the scope of DRG (coding) validation, and the skills of a certified coder.”

Now is an ideal time to consider your answer to the “asset vs. liability” dilemma, take inventory of the processes of your CDI program, and aim for positive process changes in the new year to ensure your program’s contribution to the healthcare organization.

One may wish to determine how many RAC denials were associated with disallowance of principal or secondary diagnoses (CC/MCC) on the basis of insufficient documentation. The continued success of the profession of CDI is predicated upon adapting to changes in the healthcare marketplace. Renewed emphasis on a “visionary” mindset versus complacency will ultimately govern the true success of your CDI program.

A peck of PEPPER, Part 1

Peter Piper picked a peck, how about your CDI program? Have you taken a peek at your PEPPER?

My analytical side is always harassing me to get it more involved in what I do. So I decided to dig into our hospital’s PEPPERs. PEPPER is the Program for Evaluating Payment Patterns Electronic Report, issued quarterly. (Calling it a PEPPER report is like calling an ATM an ATM machine; it comes from the department of redundancy department.) The acronym ST-PEPPER stands for short term acute care hospitals’ PEPPER.

Glenn Krauss previously provided a good overview of PEPPER both here on the ACDIS Blog and through his contributions to an article in the April 2011 edition of the CDI Journal. While I have been aware of PEPPER for some time, I did not have access to our reports until fairly recently. And, to be honest, PEPPER can be a little intimidating. You need to become familiar with what the reports tell you and then you have to be comfortable doing a little digging into your own facility data after you’ve reviewed the reports.

I really recommend that a new user of PEPPER become comfy cozy with the user guide provided by PEPPER Resources. You might discover that it’s not really that difficult to learn, and if you love to crunch numbers and analyze information the way I do, it’s almost fun.

If you don’t understand percents versus percentiles, now is the time to learn it. For areas that PEPPER identifies as potential risks for audit, your report will give you a percentage, based on a numerator/denominator. The numerator is always the targeted DRGs, and the denominator is a larger base of DRGs.

So if you are looking at the stroke/intracranial hemorrhage target area, the numerator is the number of cases in DRG 61-66 (CVA/ICH with or without thrombolytics), and the denominator is DRG 61 – 69 (all of the above, plus carotid disease and TIAs). Let’s say your hospital had 20 cases in DRG 61-66; that would be the numerator. Your facility had 80 cases in DRG 61-69, so 80 would be the denominator. So the ratio would be 20/80 or 1/4 or 25%. That is your percent.

Now PEPPER takes your percent and compares it to the percents for hospitals in your state, in your Medicare Administrative Contractor/Fiscal Intermediary (MAC/FI) jurisdiction, and in the nation. The percentile is where your hospital falls among its peers. If your facility percent is higher than that of 75% of the hospitals in the nation, your national percentile is 75%. If your percent is lower than the percent held by 75% of the hospitals in the nation, your national percentile is 25%. If that’s still too confusing, the PEPPER Resources website offers tutorials.

PEPPER focuses on what it calls “outliers,” hospitals whose percentile is above 80  or below 20.   Hospitals whose percentile is above 80 (remember, their percent is higher than 80% of hospitals in the group) are high outliers.  Hospitals whose percentile is below 20 (their percent is lower than 80% of hospitals in the group) are low outliers. For many of the target areas, PEPPER recommends facilities with high outliers review their charts for overcoding, and low outliers for undercoding.

The Office of the Inspector General (OIG) is tasked to detect and prevent fraud, waste, and abuse, improve economy and efficiency, and hold accountable those who do not meet requirements or who violate the law. Among the numerous focus areas in the 2012 OIG Work Plan, (which is a document that outlines the OIG target areas for the coming year) is Medicare inpatient and outpatient payments—to be evaluated by reviewing hospitals that are the most risky and the least risky, as determined by data analysis. It’s fascinating reading.

So when you get your PEPPER, which is an Excel spreadsheet, the first thing you should see is your “Compare” page. On the Compare page, you will get an overview of each target area, with numbers specific to your hospital, for the last reported quarter of data.

What I like to do is go through it and highlight all the targets in which my hospital is a high or low outlier for either national, jurisdictional, or state. (National is most important, followed by jurisdictional, then state.) Then, I scrutinize those target areas, pull cases in those target DRGs, and review them for coding accuracy and clinical documentation support.

But PEPPERs include 12 quarters worth of data, so evaluating trends is important. After the Compare page, there is a tab for each target area, followed by a tab with a line graph of the hospital’s percentiles for the previous 12 quarters, if data is available. So maybe this quarter we were just under the 80th percentile, but for the previous 11 quarters, we were above. Should I look at this target? Yes, I think so.

Don’t assume that because your hospital is a high outlier for a given target, that automatically means there’s a problem. There may not be. You may trigger as a high outlier for stroke/ intracranial hemorrhage (ICH) because you are a stroke center and receive a large number of referrals for stroke/ICH.  You may trigger as a high outlier for 2-day stays in heart failure because your hospital aggressively follows core measures, and you’ve got a great relationship with the nursing home next door and the home health agency across the street–so you get your patients out quickly.  Nevertheless, I would still do a random audit of cases in those DRGs to protect your facility against potential audit risks.

At the same time, I would also not assume that because your hospital is a low outlier for a target area, that you are free and clear.

You want your medical records to reflect the most accurate severity of illness, intensity of services, and resources expended, and too many low outliers might mean you’re not capturing those variables effectively. Working with your report will give you an enhanced awareness of what areas are particularly vulnerable to scrutiny, and so all the target areas should gather your attention. Look at what processes are working well, and try to apply them across the board.

In my next entry, I will discuss some of the target areas and talk about strategies for using PEPPER to its best advantage. Happy hunting!

The Problem List Project: Managing Post Acute Care Transfer DRGs

Michele D. Johnson, RN, BSN

by Michele D. Johnson RN, BSN

The length of stay (LOS) for coronary artery bypass graft patients and valve replacement patients at York Hospital (YH)/ Wellspan Health was significantly higher than the Medicare geometric mean length of stay (GMLOS) according to results of a record review from October 2007 through December 2008. So the hospital administration formed a work team to identify why YH LOS differed so much from the transfer Medicare DRG GMLOS.

In early 2009,  the work team observed that post acute care transfer (PACT) DRGs resulted in a decrease of $4 million in our expected Medicare reimbursement in fiscal year (FY) 2008. After investigation, the work group determined that YH had an unexplained higher-than-expected distribution of cases in the cardiovascular service line with complications or comorbidity (CC) rates that affected DRG assignment.

The group reviewed a sample of 102 cases and determined that 32 of those cases had evidence of acute respiratory failure that were appropriately documented and coded. The YH physicians documented acute respiratory failure as the reason for a post operative pulmonary consult which increased in LOS as determined by the DRG formula; however, the assigned DRG and its associated GMLOS differed from YH clinical care standards.

After researching and reviewing the medical records, the documentation team found acute respiratory failure did not always, or even most of the time, actually increase patients’ LOS or use of resources.  The majority of the patients did not experience unexpected significant respiratory issues that required extended post cardiovascular surgery LOS.  In fact, many of our patients had shorter LOS than indicated by the Medicare GMLOS.

The documentation improvement team met with the pulmonary medical director to establish a better definition of acute respiratory failure that acknowledged DRG requirements. The CDI team helped the director understand how Medicare guidelines determine what diagnoses lead to increased LOS and emphasized the importance of documenting well-supported diagnoses.

The CDI team realized that the hospital staff lacked a common understanding of which co-morbidities affect the patients’ expected LOS.  To help facilitate awareness, the team developed a tool (available on the ACDIS Forms & Tools Library) to help identify and track pertinent medial issues with the patient’s working LOS. The team also developed a problem list tool to help identify DRG diagnoses with LOS timetables. A pilot program for the new problem list was implemented and incorporated into clinical rounds and medical record documentation.

The team tried to identify a probable discharge date for each patient ± 1 day.  The expected DRG and LOS also were incorporated into care management activities and staff communication during patient rounds.  We use the problem list to help us better manage the LOS and better understand the transfer DRGs.

Currently YH is working to incorporate the problem list into patients’ electronic health records. When the PACT DRG list was expanded in 2007, Medicare stated that the financial impact of the transfer DRG formula was neutral on hospital DRG reimbursement if DRG assignment is accurate. Our study suggests that this premise is valid and hospitals should assess documentation practices to ensure accurate final billing and coding.

Editor’s Note: Johnson is the documentation specialist supervisor at Wellspan Health in York, PA. Contact her at mjohnson3@wellspan.org.

White Paper: Audit your CDI program to avoid pitfalls

by Donald A. Butler, RN, BSN

Not all "white papers" are plain white.

A variety of recent resources, including online ACDIS polls and the 2010 Physician Query Benchmarking Report, seem to indicate a lack of CDI program auditing and monitoring. Of course, there is a large variation in program design, structure, size, and resources, but although differences between CDI programs exist, there are enough similarities to provide a foundation for regular evaluation.

Every CDI program should objectively evaluate the outcomes, processes, and compliance of their CDI efforts. The following white paper will examine some basic auditing principles and review specific elements CDI programs should monitor.

DOWNLOAD THIS DOCUMENT which is available under the July edition of the CDI Journal archives.

Medicaid RACs are coming…someday

CMS has instructed Medicaid agencies to develop Medicaid recovery audit contractor (RAC) programs; however, the implementation date remains unknown.

CMS sent an October 2010 letter to state Medicaid directors, requiring state agencies to submit their plans for RAC

CMS put an indefinate hold on Medicaid RAC implementation in February.

implementation or request an exemption. CMS also said in the letter that it expects the Medicaid RAC programs to be fully implemented by April 1, 2011. However, a February bulletin has suspended that deadline indefinitely.

The bulletin states that the April 1 deadline did not give state agencies enough time to address operational issues to ensure compliance with provisions of the final rule, which is yet to be published. CMS plans to issue the final rule later this year and will indicate the new implementation deadline at that time.

In the meantime, you can find out which states have submitted their Medicaid State Plan amendment (SPA) to CMS, at the CMS website. SPAs address the essential elements of the state’s RAC program. To date, all U.S. states and territories have submitted SPAs.

Editor’s Note: This post was originally published on our sister blog Case Management Mentor, on Tuesday, March 1.

Metrics ideas and thoughts

Don't use measuring tape to determine your CDI program success. Try out these metrics instead.

I thought I’d discuss a few metrics I use which are not the standard metrics such as percentage of cases reviewed, query rate, response rate, agree rate, etc. One of my motivations in considering and reflecting on metric choices is to find fairly simple concepts and numbers (simple to communicate, explain, understand at a glance) that at the same time provides a good, solid picture over time and fairly and broadly reflects the work and benefits of CDI.  Metrics need to be chosen both for executive level data as well as detailed program level conversations—some metrics are not suited for both.

Comment— I am including at least one purely financial metric.  I believe it unwise for a CDI program to not be aware of their total impact on the financial health of their organization.  In today’s developing environment of providing more care for less reimbursement, this must be considered.  However, we all know that financial return is not the sole benefit and many agree this should not be the primary consideration of CDI activity.  We need some manner to concretely demonstrate and measure CDI activity and successes in addition to direct financial returns.

Chart value

One analysis I particularly like is a metric I refer to as chart value.  I calculate for the entire program as well as for the individual CDI specialist.  I believe it helps to partially level comparison among different clinical areas. For example, surgical areas have fewer query opportunities (See poll: Do you find many query opportunities in your surgical unit?), but there often is a larger financial impact with those surgical CC’s or MCC’s.

Calculation for any given time frame is simple: Total financial gain divided by total number of cases reviewed equals chart value

I find this useful in several aspects:

• It provides a nice perspective on a quarterly (or monthly) basis for program or individual performance.
• When there is a dynamic transfer process between units, this metric helps to clarify and understand a lower individual performance when compared with the activity on a particular discharge unit. There were many opportunities from previous units that were captured for CC’s or principal diagnosis clarifications and the final CDI specialists was picking up at what remained.
• Also, as mentioned, it helps to ‘level’ the comparison when comparing individual performances.
• The variables over time of the number of queries, the number of cases reviewed, etc. are also somewhat leveled out.

Net ROI (Return on Investment)

This is another simple calculation that is very common in a variety of settings.  It directly addresses the question of the comparative strength of contribution of a CDI program.  But this does NOT only mean financial ROI. There is an interesting perspective and possibility with ROI.  If one would like to use some other measure of improvement in the numerator position (other than financial impact), it can demonstrate how much it cost to gain so much ‘X’.  X could certainly be increased documentation of risk of mortality (ROM)/severity of illness (SOI), or some measure of the complexity of coding (I will ask for examples from our coding professionals), etc.  As denominator, I have used my total department budget and costs and included payroll, consultant costs, equipment, etc.

Impact percentage
(If anyone wants to suggest a snazzier name for this metric, please do!) This is a new metric (or at least I have not seen anyone else using it).  Essentially, I’ve rolled up all of the customary metrics into one single figure of merit.

First, determine what your CDI department considers a successful query. Whether that measure is improved finance, improved ROM/SOI, or additional/more specific ICD-9 coding (than would have been without query) does not really matter. The measure is what percentage of all cases reviewed is one successful with — ‘a win’.   To calculate, simply divide the number of “wins” by the total number of cases reviewed.

Note, I deliberately removed the factor of case coverage (how many of the targeted cases are reviewed).  However, every other step or metric is rolled up into this one figure of merit:  query rate, response rate, and agree rate as well as whether or not the intended gain was actually reflected in the coding process.

Adjusted case review volumes

Fair notification, though I can’t remember from whom specifically this came from another hospital program. In essence, this metric answers the question how much volume would the CDI have contributed if they had the same level of efficiency but took no time off? Partially, this metric derives from personnel factors— depending on the seniority of individual team members and accrued time off, individual health incidents, full versus part time, etc., simply counting the number of cases reviewed by individual does not provide a level comparison.

The adjustment is simple. Take the actual number of cases reviewed and divide by the fractional value of time worked.  Examples for fractional value of time worked include:

• If there were a maximum possible 160 hours, but the CDI is half time and took four hours of vacation time, then they only worked 76 hours, so that fraction would be 0.475
• For a second full time CDI who took eight hours of vacation and 16 hours of sick time, the fraction would be 0.85.

So, if one CDI specialist reviewed 80 cases and another CDI specialist reviewed 120, their respective adjusted volumes are 80/.475 = 168 and 120/.85 = 141.  Looks to me like the part time CDI was more efficient. Of course there are other variables which might  influence a CDI specialist’s productivity but at least this metric provides a starting point from which to delve deeper.

I would certainly like to hear from others about their own unique metrics.  What do you feel are your most important measurements? I would greatly appreciate feedback as I am always looking for a better answer (as well as help identifying the right answer)!

OIG Work Plan focus on three-day rule and observation services

The Office of the Inspector General (OIG) released its annual Work Plan last week. You may have received the news alert from us in your

The OIG 2011 Work Plan published.

e-mail. Those unfamiliar with the report may be asking themselves why the report matters and/or how the news affects their daily CDI efforts.

The Work Plan outlines items the OIG plans to audit in 2011. Typically these include new regulatory initiatives and items that may have risen in importance during the previous year. The OIG’s mission, according to its Work Plan introduction, is to protect the integrity of the healthcare services the government provides. It does this by:

• detecting and preventing waste, fraud, and abuse
• identifying opportunities to improve program economy, efficiency, and effectiveness
• holding accountable those who do not meet program requirements or who violate Federal laws
• conducting audits, evaluations, and investigations
• providing guidance to industry
• imposing civil monetary penalties, assessments, and administrative sanctions

Essentially, the OIG is the mother of all healthcare auditors. But as such, its targets frequently have a grander scope than those of fiscal intermediaries and it typically carries many agenda items over from year to year.  Its 2011 plan, for example, contains only a handful of new initiatives—medical devices, radiation therapy quality and safety, and an expanded focus on the three- and one-day payment windows included.

Among entrants to the OIG list for 2011, Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., in Marblehead, MA, highlights the following:

• Brachytherapy reimbursement
• Replacement of devices received at no cost or reduced cost
• Safety and quality of intensity-modulated radiation therapy (IMRT)
• Safety and quality of image-guided radiation therapy (IGRT)

This year’s Work Plan omits previous stalwarts like the Emergency Medical Treatment and Labor Act (EMTALA) and coding and documentation under the MS-DRG system—it may be that the OIG believes CMS is sufficiently scrutinizing hospitals on these matters and so left them off this year’s list. However, the OIG did renew its attention on observation services provided as part of an outpatient visit. This may be due to the increased use of these services as hospitals find themselves pushed by CMS and audited by the recovery audit contractors to ensure medical necessity for inpatient stays.

Other topics marked as “works in progress” include:

• Part A hospital capital payment
• Critical access hospitals
• Medicare disproportionate share payments
• Duplicate graduate medical education payments
• Hospital readmissions
• Hospital admissions with conditions coded present-on-admission
• Inpatient rehabilitation facility transmission of patient assessment instruments
• Medicare excessive payments

As with many other audit reports and government publications, CDI specialists need not immerse themselves in the nuances of the OIG Work Plan. That’s typically a task assigned to your facility compliance officer, legal council, or audit department. Nevertheless, a CDI department well-versed in the auditing targets of government and private agencies can tackle areas where physician documentation improvement may positively protect their facility against investigation.

If you missed the e-news alert, you can read it online at www.hcpro.com. If you are interested in learning more about the implications of the OIG Work Plan, listen to the November 16 audio conference “OIG Work Plan 2011: Tackle Major Hospital Initiatives.”

AHA’s RAC Trac offers insight for CDI program ethics

AHA analysis of RAC targets offers insight into CDI professionalism.

As we all are aware, the Recovery Audit Contractors (RAC) are advancing full speed ahead with their efforts in identifying “improper payments” made to providers by the Medicare Trust Fund. At first the RAC primarily focused on MS-DRG validation given the handicap of Medicare not having approved medical necessity issue reviews. As of August, however, each of the four RAC began  such reviews with the hope of recovering provider money. As of October, it seems the primary RAC comment in regards to this analysis is that care provided to the patient on an inpatient basis  should have been performed as an outpatient service.

I call your attention to the recently released American Hospital Association’s (AHA) RAC Trac report, “Exploring the Impact of the RAC Program on Hospitals Nationwide,” which highlights results of a second quarter 2010  survey.

Before I discuss the report’s findings let me talk briefly about the AHA’s RAC Trac initiative.

RAC Trac is an internet-based free survey the AHA  started in January of 2010 in response to a perceived lack of data and information from CMS regarding the RAC impact. Hospitals willing to participate in the quarterly survey simply register with the AHA which aggregates and analyzes the data quarterly.

The AHA report highlights RAC related results impacting hospitals as a whole, and breaks them down further by each of the four designated geographic RAC regions.  Connolly Healthcare, the RAC for region C, encompasses 40% of the hospitals in the United States and accounts for $57.3 % or $11.2 million of the $19.2 million of denials reported by the 1,389 hospitals who participated in RAC Trac survey.

Some notable points from the report

• Seventy percent of hospital respondents experienced some type of RAC activity through the second quarter of 2010
• $19.2 million in denied claims have been reported since the first quarter of 2010, as mentioned above
• Eighty-five percent of denied dollars were complex denials totaling over $15.5 million dollars
• By the second quarter of 2010, Region B had nearly half of all reported denials
• The average dollar value of a complex denial was $5, 598
• Incorrect coding of MS-DRGs or other coding errors represented the top reason by dollars for complex denials for 86% of hospitals
• Hospitals reported appealing 16% of RAC denials available for appeal and hospitals reported appealing denials totaling over $5 million in value; 16% of hospitals reported appealing at least one RAC denial.
• Of the claims that have completed the appeals process, 13% were overturned in favor of the provider

Use RAC Trac targets to improve CDI focus

While we are not in the business of ICD-9 coding and MS-DRG assignment, we certainly influence the process by virtue of our efforts to improve physician documentation in the medical record. The majority of our CDI programs track success of their individual programs by number of clinical queries left by the CDIS, physician response rate, and if the query impacted financial reimbursement by virtue of principal diagnosis or secondary diagnosis clarification and documentation.

This is definitely where we all should express some concern.

In my travels lately, I have had the opportunity to observe CDI specialists at work and to review numerous RAC coding error denials. The RAC frequently asserts that diagnoses were not clearly and sufficiently documented throughout the record (e.g.,  not in the discharge summary, contrary to official coding guidelines), were not clinically significant,  were not sufficiently documented in the record, or that the principal diagnosis was improperly sequenced.

While I disagree with deleting a diagnosis from a case on the sole basis of not being in the discharge summary, I was surprised with the number of cases in which I unfortunately agreed with the RAC’s determination of coding errors. It was clear, based upon the available documentation in the record, that a query was probably left by the CDI specialist  in the name of complete and accurate clinical documentation and that the physician simply documented a condition based on that query.

The message here is to uphold and adhere to our clinical knowledge in the daily practice of concurrent chart review in the quest to improve and facilitate clinical documentation improvement. Avoid seeking clarification of clinical diagnoses not clinically relevant, just for the sake of capturing that elusive CC/MCC.

Look what transpired effective October 1^st with acute renal failure no longer being a MCC.  Our real goal in clinical documentation improvement is to clarify ambiguous and missing clinically relevant diagnoses, regardless of whether the diagnosis is a CC, MCC, secondary or principal diagnoses. Lastly, we need to fulfill our role and duty in educating coders on the clinical side of coding, increasing their core competencies and skill sets in properly and accurately applying coding conventions and policies governing ICD-9 and MS-DRG assignment.

I encourage everyone to read the report to see the specific issues identified by RAC region where your hospital is located. CDI is an evolving field and we must never lose sight of the continuous evolutionary mindset and thought process we must exhibit in maintaining the professional standards of clinical documentation improvement.

Editor’s Note: Listen to the upcoming audio conference RAC Medical Necessity Reviews: Understand Target Areas and Prepare for Audits on Wednesday, November 3, 1 p.m. EST, featuring Kimberly Anderwood Hoy, JD, CPC, director of Medicare and Compliance for HCPro Inc., and Michael Taylor, MD, vice president of clinical operations at Executive Health Resources in Newtown Square, PA.