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While most legacy clinical documentation improvement (CDI) programs have been doing a good job at preserving revenue under the MS-DRG system, a potential blind spot exists. Value-based and alternative payment models (APMs) rely on the concept of risk adjustment to determine final payment in acute care. 

The Centers for Medicare & Medicaid Services (CMS) risk-adjusts patients within quality measure cohorts because the MS-DRG methodology is resource-based and fails to accurately represent patient acuity, which is heavily influenced by the cumulative effect of all existing diagnoses. An example of this is how a diagnosis of COPD may prolong the LOS (length of stay) or increase the likelihood of a readmission to the hospital for a CHF patient.

CMS has determined that use of the MS-DRG alone is insufficient to risk-adjust populations, and the agency uses a completely different tool to do this: hierarchical condition categories (HCCs). Here’s where the blind spot for CDI programs becomes evident. 

Most of today’s CDI programs are focused completely on ensuring that MS-DRGs are accurate and that all standard and major complications and comorbidities (CCs and MCCs) are supported in the clinical documentation as basis for their queries. As such, they are not focused on other secondary diagnoses, which may have a significant impact on risk adjustment for a patient who may be indexed to one of the value-based or alternative payment models for future payment adjustment.  

Over 40 percent of diagnoses included in the HCC methodology utilized for risk adjustment are not classified as MCCs or CCs in the MS-DRG system, which means that there are close to 60 percent of secondary diagnoses that may not be considered important for clarification, specificity, or even coding in the medical record. Complicating matters further, CMS has a goal of tying 90 percent of Medicare reimbursements to one of the value-based payment or alternative payment models by 2018, and the “performance period” by which the payment adjustors are calculated is now. So, what does this mean for you in terms of your existing CDI program? A lot! 

In our work, we find that chief financial officers are frequently unaware of how much of their current Medicare reimbursement is being impacted by these value-based and risk-adjusted payment models, because it appears that the DRG payments are still coming in and the case mix Index is still comprised of all Inpatient Prospective Payment System (IPPS) payments. But once a CFO sees a 1-2-percent penalty applied across the board for a particular program like the Hospital Readmission Reduction Program or VBP program, we typically get their attention. At this point, the clinical leadership, the quality director, and the CDI and coding managers are often caught on their heels trying to explain when, why, and how they will reverse trends that may not be entirely under their control. A coordinated and rapid analysis of the organization’s performance to determine root causes is critical to reversing trends, whether they be the result of poor care, poor documentation, poor coding, or a combination of all three. For the purposes of this article, let’s consider that an organization has already determined that they are experiencing penalties in the Readmission and the Hospital-Acquired Condition Reduction programs as a result of poor clinical documentation resulting in an understatement of patient acuity in the coded data. What should they do?

First, we recommend that CDI specialists get comfortable with APR DRGs within their concurrent workflow, as it brings important visibility to secondary diagnosis that impact and drive severity of illness (SOI) and risk of mortality (ROM). While there are very few tools on the market that bring visibility to which secondary diagnoses are classified within the HCCs, it is still a valid assumption that by querying providers for clarification on secondary diagnoses that affect SOI and ROM, CDI specialists are helping physicians and coders improve the depiction of patient acuity in the resulting claims data. The use of the APR-DRG grouper as part of the CDI process workflow moves beyond a best practice to a standard of practice. Modeling a working APR-DRG in addition to an MS-DRG helps CDI specialists determine which high-value diagnoses should be clarified due to their impact on the tiered APR-DRG. In our experience, 30 percent of the final coded medical records we review carry the potential for an improvement in SOI and ROM scores through simply coding diagnoses that are already present in the record or requiring clarification with the provider. This represents a significant opportunity for most organizations to capture patient acuity that otherwise is left off of submitted claims.

Second, we recommend adding a new metric to the CDI and coding dashboard called coding depth.Coding depth is simply a measure of how many secondary diagnoses are captured beneath the level of the primary CC or MCC on each claim. This is incredibly important, because there are literally thousands of diagnoses that impact risk adjustment that may not be captured if a coder or CDI specialist limits his or her focus to just the MS-DRG. Some examples include “history of” codes and diagnoses such as anxiety and depression, which impact the likelihood of patients being readmitted to the hospital or developing a complication while hospitalized.

Finally, we suggest a disciplined focus on specificity in coding and an advanced level of clinical sophistication in how we drill down on non-specific diagnoses with physicians, resulting in being absolutely certain that we have the most specific diagnosis code possible. For example, a diagnosis of “chronic anemia” may help us in terms of a CC or MCC, but is not necessarily the best possible diagnosis for risk adjustment, particularly if the patient is on an iron supplement. The CDI specialist should query the provider for more specificity as to the type of anemia, because a iron deficiency anemia diagnosis is powerful in a range of metrics, such as risk of mortality and patient safety indicators. Clinical sophistication in querying is usually developed during “face time” with clinicians and is unlikely to be facilitated through the use of written or electronic queries. Adapting the CDI workflow to accomplish high-value personalized interventions with clinicians is vital to helping them understand how important, clear, and unambiguous documentation impacts the depiction of their patient’s acuity, which may in turn also help them in the office setting with the value-based payment models being implemented there as well.

This certainly has been a year of great change for CDI and coding. We have a tremendous opportunity for partnering and cross-fertilizing our unique but connected skill sets to work as a unit with clinicians.

These value-based and risk-adjusted payment models are not going away, and they only magnify the value that a future-state CDI program can bring to an organization, including the ability to pivot to a focus on patient acuity and risk adjustment.


Michelle M. Wieczorek RN RHIT CPHQ

Michelle Wieczorek is a senior manager in the DHG Healthcare CFO Advisory team and focuses on clinical documentation and revenue integrity initiatives. She is a Registered Nurse, Registered Health Information Technician and Certified Professional in Healthcare Quality with more than 30 years of experience in healthcare. She has served in leadership roles in Clinical Nursing, Health Information Management, Utilization Review, Clinical Quality, and Information Technology.

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