Coding Audits and Selecting a Coding Vendor: What Have we Learned since 2015?

Conduct coding audits in all settings and check vendors’ coding credentials are among lessons learned under ICD-10.

When we left ICD-9-CM, there were around 14,000 diagnosis codes in use across the healthcare industry – and then, on Oct. 1, 2015, we moved to approximately 69,000 codes.

ICD-10-CM/PCS implementation was a huge event across all healthcare settings. It was a time to shine for health information management (HIM) and coding professionals, and it really moved clinical documentation improvement (CDI) into a new level of importance.

Today, as of Oct. 1,2019, we have 72,184 ICD-10-CM codes and 77,559 PCS codes. Although the transition was smooth, overall, I have been pondering a few thoughts about these past four years and wondering: what have we learned regarding coding audits and selecting a coding vendor (supplier)?

Clinical coding audits (referred to as “coding audits”) have been a significant part of HIM going back more than 35 years, especially since Diagnostic-Related Groups (DRGs) were initiated here in the United States in 1987-1988. With greater dependence upon clinical codes for healthcare reimbursement, the determination of medical necessity, and quality, we’ve continued year after year to want and need validation of coding accuracy. Identifying potential or actual coding errors (variances) is a prudent way for your compliance program to make corrections prior to any external investigation occurring,  as well as a way to improve internal functions. Coding audits also help identify educational opportunities and system issues, reduce payor denials, protect revenue, and highlight documentation gaps. Sometimes, a coding audit brings about negative feelings and fear, but these audits really can and should be perceived as being very helpful, as well as a necessity.

With the major move to ICD-10-CM/PCS, this necessity has gained much attention and momentum. Clinical coding audits come in a variety of styles, formats, sizes, settings, frequencies, and scopes. They can be performed internally, with your own auditing staff (team), and/or via an external auditing firm – or they can be both internal and external (which is a best practice). It is critical that we have coding audits performed on a regular basis, due to the regulatory scrutiny in healthcare and the mere fact that there are changes to clinical codes, coding guidelines, and official coding advice (i.e. American Hospital Association, or AHA, Coding Clinic) occurring throughout the year. Keep in mind that coding audits often utilize HIM vendors, and be mindful of the lessons learned outlined below regarding selecting and using an external coding vendor.

Lessons learned since October 2015 that I’ve experienced regarding coding audits include but are not limited to the following:

• Conduct coding audits in all healthcare settings; no setting should be without audits or coding validation;
• Pay greater attention to clinical documentation when conducting coding audits;
• Be mindful of the increase in the inevitability of physician queries, and the fact that there are rules that are connected; this includes settings other than acute care;
• Make coding corrections and initiate payment refunds, visible steps that support compliance;
• Remember that the frequency of coding audits and the volume of encounters is consistently included in audit plans, and it can vary;
• Conduct both internal and external coding audits, recognizing that doing so is an industry best practice;
• Utilize artificial intelligence technology and software programs within the coding process, something that has been elevated in importance with the electronic health record; and
• Identify educational gaps so that efforts can be focused.

The selection and use of an external coding vendor or contractor is a fundamental process for any organization and/or health information management department. Using a coding vendor is often necessary for a variety of reasons: a shortage of staff, backlog, increased workload, special coding projects, electronic health record (EHR) or other major technology implementation, and even outsourcing coding to an external vendor/supplier.

With ICD-10-CM/PCS, we all experienced a learning curve, even for the staff of coding vendor companies; thus, one’s due diligence in securing a highly-skilled, ethical, and dependable resource was and still is essential. In preparation for ICD-10, we knew there needed to be education and training, and this included coding vendors. We also needed a process to validate learning and knowledge transfer; this could be achieved through testing, which was very common. Then there was the affirmation from the coding vendor that they were ready, that they had the educated and trained staff in place, and they had coding tools and resources needed to complete the task. An initial step is to perform a background check on the vendor company, including obtaining referrals and references, all conducted prior to any engagement.

Through ICD-10 implementation, and after, we’ve learned to ask potential coding vendors about their operational processes, recruitment, and education, in addition to asking some very specific questions. We learned that the coding vendor contract should address and have a process for the following, at a minimum:

• Background checks and validation of coding credentials/certifications;
• Applicant testing (not just a simple 20-question true/false quiz);
• Onboarding processes and orientation;
• Remote access and workplace privacy and security;
• Oversight (whether on-site or remote, although on-site is less common today);
• Education and training (regular and continuous – 12 hours or more a year) and continuing education units (CEUs);
• Regular communication (remote and face-to-face, even weekly calls with remote staff);
• Available and enforced coding resources (i.e. Official Guidelines, AHA Coding Clinic, Standards of Ethical Coding, Practice Brief – Physician Querying);
• Written accuracy and productivity standards;
• Vendor internal quality reviews and processes; and
• Written processes for making coding corrections and/or changes, and a coding accuracy goal/target (how this is determined should be put in writing, with an impact to the contract fee structure when quality/productivity is less than acceptable).

The above are just some of the lessons we all learned from ICD-10 implementation, and they now have been applied to our normal way of operating; many are even best practices. As we all strive for accuracy and success in our workplace, we should use the benefits of these many lessons learned from our past to help guide us on a regular and daily basis. Continue to embrace coding audits, as they have many benefits. Conduct due diligence when engaging a coding vendor, as this will help ensure the integrity of your and our clinical coded data, now and in the future.

Programming Note:

Listen to Gloryanne Bryant report this story live today during Talk Ten Tuesday, 10-10:30 a.m. EST.