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The Future Of Coding Clinical Validation Reported Diagnoses

Lynette Thom, BS, RHIT, CCS, CDIP
AHIMA Approved ICD-10-CM/PCS Trainer

U.S. hospital revenue cycles have been undergoing radical changes since the advent of the prospective payment system (PPS). In response to this radical change to the way they earned revenue, hospitals fought for changes to the PPS to prove to Centers for Medicare and Medicaid Services (CMS) that their patients were sicker, their costs were higher and they should be paid accordingly. The medical severity-adjusted diagnosis-related group (MS-DRG) was created based on formulas where greater weight was given to sicker patients, and hospitals were paid more for treating these patients. Other third-party payers thought this was a good idea, too, and many adopted the MS-DRG system as a guideline in reimbursing hospitals.

Alas, CMS created the Recovery Auditors (RAs) (formerly RAC) to take money back from hospitals for over coding and billing a higher-weighted MS-DRG than they should have. As an extension of this payment recovery idea, “clinical validation” reviews were invented. Clinical validation involves a review of the medical record to establish if the patient truly suffered from the conditions that were documented in the medical record by a physician. In other words, providers now have to prove their patients were actually sick. By applying “consensus criteria” to the clinical documentation in the medical record, RAs use the criteria as clinical validity that the hospital’s patient was not that sick. To the dismay of hospitals, this “consensus criteria” changes depending on the payor.

Traditionally, if a doctor documented a diagnosis in the medical record, it was coded. Coders did not ask a physician to justify a diagnosis. Today, physicians and hospitals must rationalize the existence of a medical condition. Some of the diagnoses targeted include pneumonia, sepsis, malnutrition, urinary tract infections, acute respiratory failure, acute renal failure and acute blood loss anemia. These are some of the most common diagnoses that cause MS-DRGs to group to a higher weight. Defending these conditions involves proving, with various laboratory, radiology and other diagnostic tests, that the hospital really did treat a patient for said diagnosis.

While CMS and other payers may use certain criteria, no federal requirements exist stating that any specific criteria must be employed by a physician in order for a diagnosis to be determined. The physician’s clinical judgment is the criteria. For example, the American Society for Parenteral and Enteral Nutrition (ASPEN) criteria might be used to identify if the diagnosis of malnutrition is legitimate. Unfortunately, many practicing physicians have not adopted ASPEN criteria, yet are being penalized if their documentation does not meet ASPEN criteria for malnutrition.

So what threshold is necessary to clinically validate a diagnosis? CMS states the medical record should have clinical evidence to support the code. The required evidence is subjective, but CMS does provide the following guidance:

“All entries in the medical record must be complete. A medical record is considered complete if it contains sufficient information to identify the patient; support the diagnosis/condition; justify the care, treatment and services; document the course and results of care, treatment and services; and promote continuity of care among providers. With these criteria in mind, an individual entry into the medical record must contain sufficient information on the matter that is the subject of the entry to permit the medical record to satisfy the completeness standard.”

Many healthcare organizations struggle with clinical documentation with these top-targeted diagnoses, and not all have embraced clinical documentation improvement (CDI) practices. Some thought that computer-assisted coding (CAC) would decrease the DRG validation letters aimed at recoupment. Some organizations are aggressive with their CDI and coder query process, but others do not have the resources to keep up. Physician compliance with CDI efforts sometimes falls short, though, and the hospital is left trying to defend a medical record that is three years old, with insufficient documentation on a patient that is long gone, that was coded by a person who may not even work there anymore.

What is a hospital to do? Improving clinical documentation is a big step. Start by focusing on the top targets and make sure the hospital’s physicians are backing up these diagnostic statements with test results. Teach physicians what must be documented in the record in order for that diagnosis to be coded. Identify, educate, monitor, and repeat. Blue & Co., LLC can assist by assessing an organization’s baseline clinical documentation and coding quality. By measuring its baseline, the organization can begin the process of proactively defending its medical record and increase its odds of successfully combatting the predatory practice of clinical validation denials. Call or email today for help.

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