Outpatient CDI: Follow the Money

Moving from the inpatient to the outpatient setting is gaining momentum.

Outpatient clinical documentation improvement (CDI) programs are becoming more prevalent in the healthcare sector, as the value and benefit to the revenue cycle have become readily apparent. Consulting companies are developing service lines and software to grow their position in the outpatient CDI consulting marketplace. I am excited to see the CDI profession migrate into the outpatient arena, as more and more patient care services are moving into the outpatient setting, including many of the surgical procedures traditionally performed in the inpatient setting.

According to Deloitte Insights, hospital inpatient stays have declined 6.6 percent over the past decade, despite population growth and demographic shifts (such as an increasingly older, sicker Medicare population). In contrast, between 2005 and 2015, visits to outpatient facilities increased by 14 percent, from 197 visits per 100 people in 2005 to 225 visits per 100 people in 2015.

The pace of services migrating from inpatient to outpatient will continue to accelerate, accompanied by the increased volume of outpatient office visits, with the baby boom generation reaching their 60s and more patients electing Medicare Advantage plans. Enrollment in Medicare Advantage plans has nearly doubled in the past decade. One-third (34 percent) of all Medicare beneficiaries, 22 million people, are currently enrolled in Medicare Advantage plans. Between 2018 and 2019, total Medicare Advantage enrollment grew by about 1.6 million beneficiaries or 8 percent. The Congressional Budget Office (CBO) projects that the share of beneficiaries enrolled in Medicare Advantage plans will rise to about 47 percent by 2029.

Following the Reimbursement
As the movement to outpatient continues and more and more Medicare beneficiaries elect for Medicare Advantage coverage, wherein the plan reimburses providers through severity scores consisting of risk adjustment factors, calculated in part through capture of HCC diagnoses, most outpatient CDI programs primarily will focus upon capture of these diagnoses that qualify as HCCs impacting the risk adjustment factor scores. HCCs are synonymous with CC/MCC diagnoses to the extent that they increase reimbursement under the MS-DRG system.

However, there is one distinct difference in that under the MS-DRG system, the CC/MCC diagnoses captured and documented by the physician will have a material impact upon reimbursement as part of the DRG system, provided that the payer does not refute the assigned DRG in the interests of cost containment and reduction in provider payment on the case. Compare this to the HCC system, risk adjustment factor scores, and reimbursement under the Medicare Advantage payment system. Any and all HCCs documented in a calendar year potentially impact reimbursement the following year, provided that the plan shares the additional revenue it receives under the per-member, per-month payment from Medicare. It seems more than logical that hospitals and health systems should be focusing upon and directing their energies on areas of clinical documentation integrity that best communicates patient care, including all relevant diagnoses and accurate depiction and reporting of the clinical facts, clinical information, context (as well as the physician’s clinical judgment), medical decision-making, and thought processes that support medical necessity for all work performed or services ordered.

Medical Record Documentation: Fuel for Healthcare
Clear, concise, consistent, and contextually correct clinical documentation is analogous to fuel for an automobile. Without gasoline, the car does not run. Without accurate and complete medical record documentation, all provisions of healthcare come to a grinding halt. Every service ordered by a clinician, aside from a screening mammogram, requires a clinician order. This order is the first step in the process of rendering patient care. The order must be complete and contain all the necessary information required to fulfill the provisions governing an order for care. Besides the patient name, date of order, ordering physician patient date of birth, service ordered, and diagnosis or diagnoses, at a minimum, the order must establish medical necessity for the service. The diagnosis must be considered a covered benefit, as determined by the payer.

More is to come on medical necessity. The clinician order is the first step in the revenue cycle process, which continues with the actual providing of the service, such as an X-ray, CT scan, IV infusion, wound care, etc. What transpired next are the providing and charting/documentation of the service, charge entry, and coding and billing for the service, resulting in expected reimbursement from the payer. The interrelated steps in the revenue cycle can be likened to a subway system. If there is any problem at any of the stations along the route, then the entire subway system is impacted. Similarly, if any of the pieces of the revenue cycle (spanning from the time the order is placed to when the patient is registered, and the service provided, charged, coded, and billed) presents an issue, then the entire revenue cycle is negatively impacted. At a minimum, any process breakdown in the revenue cycle contributes to rework, delays in payment, and increases in cost to collect, a key performance indicator that is tracked and trended as part of the revenue cycle.

Fundamental to the Revenue Cycle
Fundamental to the entire revenue cycle is clinical documentation that serves as a communication tool. Effective communication of patient care supports the patient’s clinical needs, adequately reports and the clinical condition of the patient, describes why the patient requires the level of service rendered, outlines any conservative treatment received or contraindicated, and clearly depicts the clinician’s clinical judgment, medical decision-making, thought processes, and clinical rationale that supports the services ordered. The latter is traditionally found in the clinician’s office notes, ED documentation, or urgent care documentation, necessitating that outpatient CDI programs consider extending the initiative of documentation integrity into the clinician’s office, ED, or urgent care.

Outpatient CDI: A Powerful Driving Force
As is clearly evident, outpatient CDI programs can be a powerful driving force in sufficiently ensuring the completeness, accuracy, and integrity of clinical documentation, well beyond diagnosis capture. Medicare’s hospital insurance trust fund will become insolvent by 2026 unless something is done to slow down the spending curve. Data shows that hospitals are by far the biggest cost in our $3.5 trillion healthcare system, where spending is growing faster than the gross domestic product, inflation, and wage growth. Spending on hospitals represents 44 percent of personal expenses for the privately insured, according to the Rand Corp.

Inarguably, the emphasis of outpatient CDI programs should be placed upon enhancing the value and usefulness of documentation, from the perspectives of communication of patient care, medical necessity, and value cost effectiveness. To do otherwise is offering lip service to efforts of improving the integrity of documentation, foregoing the opportunity to contribute in a positive way to patient care as well as the revenue cycle. Increasing medical necessity standards, coupled with more stringent documentation requirements and limitations of coverage imposed by third-party payers, are contributing to continued medical necessity struggles, denials, and resulting rework by hospital staff.

I submit to those in the CDI profession working with current outpatient CDI initiatives, or those contemplating starting a program, give strong consideration to expanding the deeply established ingrained vision to include processes that are designed to improve actual quality and effectiveness of clinical documentation that best communicates patient care on behalf of the patient. Laser focus upon achieving a reasonable standard of clinical documentation serves as a major benefactor to the patient, first and foremost. A byproduct of solid and complete documentation is optimal reimbursement that is less subject to third-party payer scrutiny, prone to unnecessary medical necessity denials, and clearly supported and aligned with the revenue cycle. Diagnosis capture and reporting is the final chapter of patient care, and other critical elements of the revenue cycle prior to diagnosis charting must not be overlooked, under the theory of limited constraints. The healthcare delivery process is only as strong as the sum of its parts.