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2019 Inpatient Coding Audit Results: Insight for 2020 and Beyond

At Vitalware Revenue Integrity Services, one of the benefits we have of serving so many clients is getting the chance to synthesize the full breadth of data we see, and making note of common patterns that our team discovers.

Both for our clients, and for those who may be considering the value of "outside" perspective when approaching auditing and process reviews, we wanted to share some of the insights our experts have gathered over the past year before heading into future 2020 audits.

The information and discussion that follows were recently presented in a webinar by Lisa Ball, who has 20 years of experience in Revenue Integrity.

Disclaimer: This article summarizes information that was current at the time it was published and provided via the web. This information is not intended to take the place of either the written policies or regulations. We encourage everyone to review the specific regulations and other interpretive materials as necessary.

With that disclaimer made, let's dive in.

How to use this Information

As you might infer from our disclaimer, the best way to approach this information is to use it as high-level guidance. By reviewing this article (and perhaps additionally re-viewing the webinar) you may be able to gain insights regarding:

  • How your own audits compare with, or reflect issues similar to our Revenue Integrity team’s results
  • Areas of interest for further exploration or review
  • Prioritization for areas of interest by DRGs, procedures, services, and/or diagnoses
  • Industry trends related to DRG audits
  • Potential rapid and long-term solutions for recurring issues

Let’s first establish the basic definition, rationale, and approaches for inpatient auditing. After that, we’ll take a look at discrete challenges for coders, clinicians, and clinical documentation improvement teams.

The What, Why, and How of Inpatient Auditing

WHAT is an inpatient audit? It’s composed of looking at reimbursement, quality, and coding accuracy. For reimbursement, an IP audit will look at the principal diagnosis, MCCs and/or CCs reported, and procedures that affect DRG for appropriate payment.

For quality, an inpatient audit will review documentation for continuity of care, validate that clinical criteria is met, and review the length of stay and discharge disposition. To determine coding accuracy, auditors will also review all secondary codes for accurate code assignment and reporting.

WHY do inpatient auditing? The reasons are many, but the financial improvements are at the core: Change Healthcare estimates that “For the typical health system, as much as 3.3% of net patient revenue, an average of $4.9 million per hospital, was put at risk due to denials.”

Auditing can also help facilities provide better healthcare by improving reporting, process integrity, and through improved financial performance, optimization of facilities, and workforce resourcing.

HOW is an inpatient audit performed? Before starting, your facility will want to PLAN and decide on the focus and current need. Here's a good set of questions to begin with as you frame your goals and approach:

  • How will you choose your cases? Will you only focus on known issues? Or (recommended) will you include a broad and randomized set of items to identify new issues?
  • Who will perform the audit: internal or external personnel? Or some combination?
  • How often will audits be performed? And will they be concurrent or retrospective?
  • How do you plan to present the findings?

One method to get started is to pull outliers using your facility’s PEPPER report (Program for Evaluating Payment Patterns Electronic Report). As noted in our first bullet above, it's good practice to look beyond areas where you know review will be helpful to assure that areas without obvious problems...are actually returning optimal results.

View the Webinar

More of an audio, visual person? View our on-demand webinar where Lisa Ball walks through real-life audit scenarios in detail.

Retrospective Review

At Vitalware, most of the reviews we perform are retrospective. Of course, we're guided by input from clients and their staff on what they need help with, but we also typically deploy a Vitalware-proprietary DRG selection — a framework we continually refine as our practice and experience dictate. Usually, we will include the following in our review:

  • Discharge disposition
  • Severity of illness/ Risk of mortality (SOI / ROM)
  • Readmissions for (CHF, Pneumonia, MI, etc.)
  • Not otherwise specified (NOS) diagnoses
  • Clinical criteria
  • Queries and query opportunities
  • Present on Admission (POA)
  • Principal diagnosis (PDX) selection
  • Secondary diagnosis validation —complication or comorbidity (CC) or a major complication or comorbidity (MCC)

Concurrent Review

These are similar to a retrospective review – however, a concurrent review also provides CDI and coding staff the opportunity to interact one-on-one with clinicians. This interaction can help clarify ambiguous documentation prior to discharge and bill submission. Concurrent reviews often illuminate issues with:

  • Principal diagnosis
  • Clinical picture review (treatment and diagnosis match)
  • Clarifying ambiguous documentation
  • Finalizing DRG selection

These reviews also reveal common denials. For one example, we see a great many MS-DRG denials due to CC / MCC 980-988. (In the full webinar, you'll see several cases like these in more detail.)

For both respective and concurrent reviews, here's a longer list of DRGs where we frequently uncover opportunities for improvement:

MS-DRGs with highest "shift" opportunity:
  • 981-982 Extensive O.R. procedure unrelated to principal diagnosis
  • 871-872 Sepsis or severe sepsis with/without mechanical ventilation
  • 689-690 Kidney and urinary tract infections
  • 166-168 Other respiratory system O.R. procedures
  • 189-195 Pulmonary edema, COPD, and simple pneumonia & pleurisy
  • 177-179 Respiratory infections and inflammations
  • 065-066 Intracranial hemorrhage or cerebral infarction

Compliance is Critical

Along with the issue of denials, there’s the essential matter of compliance. The Centers for Medicare & Medicaid Services, Department of Health and Human Services’ General provisions (50.6.1 - Routine Monitoring and Auditing) state that, “Sponsors must undertake monitoring and auditing to test and confirm compliance with Medicare regulations, sub-regulatory guidance, contractual agreements, and all applicable Federal and State laws, as well as internal policies and procedures to protect against Medicare program noncompliance and potential FWA.”

The “monitoring and auditing activities” described, are formal reviews which are part of normal operations to confirm ongoing compliance. Fraud, Waste, and Abuse (FWA) is to be prevented, reported, and corrected. Especially since Medicare abuse can expose providers to criminal and civil liability.

What is Medicare abuse? Abuse describes practices that either directly or indirectly result in unnecessary costs to the Medicare program — including any practice inconsistent with providing patients with medically necessary services meeting professionally recognized standards. Some typical examples of Medicare abuse are:

  • Billing for unnecessary medical services
  • Charging excessively for services or supplies
  • Misusing codes on a claim, such as up-coding or unbundling codes

Good auditing is an essential tool to ensure compliance, and, as we've seen above, the activity of auditing is itself part of your compliance obligations.

So, clearly: auditing affects EVERYONE. From the patient and the facility, to all the many other teams involved: Accounts Receivable, Clinical Documentation Improvement (CDI), Coders, Clinicians, Compliance (HAC, Patient Safety Indicators), Chief Financial Officer (CFO), Recovery Audit Contractor (RAC), and Office of Inspector General (OIG).

Let’s briefly review the challenges we see most frequently for coders in today's environment.

Challenges for Coders

It’s important to recognize that coders must often wrestle with difficulties that arise from business decisions that go on well-beyond the coding level. Budgets, staffing, productivity goals, education resources, and hiring decisions all flow into the environment coders work in, and it’s important to recognize that all of these factors play a part in a coding teams’ capacity.

Some facilities don’t have access to current coding clinic resources, which can be problematic. Staying up-to-date with coding is exceedingly important.

Even for very capable teams, the inherent complexity of code selection in the following areas will require focus and training to get right:

Procedure coding
  • Body system character selection
  • Diagnostic versus therapeutic character selection
  • Missing procedures
  • Intent / root operation issues
Diagnosis coding
  • Principal diagnosis selection
  • Clinical validation
  • Sequencing

Challenges for Clinicians and CDI Teams

Of course, coding must be based on provider documentation — this isn’t a new concept, but disconnects can happen. When a coder gets an incomplete record, they don’t have many alternatives, and denials are often the result.

Sometimes, there are gaps that emerge between required coding practice and the language and procedures common in the clinical environment. In one recent example, the Vitalware Revenue Integrity team found that one or two day stays with a sepsis diagnosis are frequently audited and returned by payers for denial. Clinical documentation often refers to “sepsis syndrome,” but this terminology has become outdated as it’s not specific enough, and therefore, does not help with code selection.

The important thing to remember is that coding and clinical documentation go hand in hand — and updates in coding need to find their way “upstream” so to speak – from the coding environment, into the clinical environment.

Vitalware personnel found that most errors (63%) are in fact occurring in coding. Documentation errors make up 26%, and a combination of both documentation and coding errors occurred 11% of the time.

Everybody Can Contribute

As we reviewed data, Vitalware personnel found that most errors (63%) are in fact occurring in coding. Documentation errors make up 26%, and a combination of both documentation and coding errors occurred 11% of the time. Because of this, one of the things we emphasize when we undertake audits is to bring in all the interdependent parties together and get them on the same page to address common issues. An audit is one of the best mechanisms available for creating that cross-departmental collaboration.

Reach Out

Let us know if you would like to learn more from a Vitalware Revenue Integrity representative. We are ready to partner with your team and get to work for your facility. Our experts love to help organizations discover root causes for errors and help implement changes that improve results — and endure over time.