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EDITOR’S NOTE: The following a part of a series on outpatient clinical documentation integrity (CDI). Part IV was published on May 16, 2017 in the ICD10monitor e-News.

The medical record serves primarily as a physician’s communication tool for patients and all associated healthcare stakeholders. The effectiveness and completeness of the documentation drives many ancillary functions, including quality studies, measures of efficiency and effectiveness, utilization review/management, case management, Joint Commission standards, Centers for Medicare & Medicaid Services (CMS) conditions of participation, and CMS measures of value-based methodologies, to name just a few.

One important healthcare function totally dependent upon documentation and the quality of communication is the hospital’s (or other healthcare entity’s) revenue cycle. Revenue cycle, as defined by the Healthcare Financial Management Association, is “all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue.” In other words, it is a term that encompasses the entire life of a patient account, from creation to payment. Any insufficiency or oversight in clinical documentation existing anywhere in the tightly integrated processes of the revenue cycle potentially contributes to creating negative outcomes with significant repercussions.

A recently published blog post appearing on the Society of Hospital Medicine’s website, titled “A Need for Medicare Appeals Process Reform in Hospital Observation Care,” reflected the financial pain and concerns most hospital CFOs are facing as it pertains to revenue cycle operations. A major challenge faced by CFOs is, not surprisingly, turning patient care with associated expenditures into net patient revenue. In other words, they ask: how efficiently and effectively does the hospital turn “IOUs” for patient care services rendered into real cash in the bank?

There is a wide array of areas in the revenue cycle where breakdowns can disrupt cash collection, the backbone of the revenue cycle. A common theme that resonates in the revenue cycle, preventing achievement of high performance, is denials attributable to insufficient (a.k.a. poor) documentation. Poor documentation translates into issues of medical necessity, clinical validation denials, and DRG down-codes that emphatically contribute to unnecessary, self-inflicted wounds. In fact, the Comprehensive Error Rate Testing (CERT) contractor consistently in its medical record chart review audits utilized in calculating the annual Medicare paid claims error rate identifies “insufficient documentation” as the cause of the medical necessity denials.

To give you an idea about the sheer magnitude of the costs to hospitals for potentially avoidable denials with afforded Medicare claims appeals rights, I call your attention to the Society of Hospital Medicine article found on its SHM Blog. Last year, the U.S. Government Accountability Office (GAO) report “Medicare Fee-for-Service: Opportunities Remain to Improve Appeals Process” cited a 2,000-percent increase in Level 3 inpatient appeals from 2010-2014. But with 650,000 claims awaiting Level 3 adjudication, compared to current administrative law judge (ALJ) capacity to hear just 92,000 Level 3 appeals per year, appeals requests will likely continue to exceed adjudication capacity despite recent CMS efforts. This is because major, systematic inefficiencies have not been addressed. The authors of the blog, in a study of their respective institutions (the University of Wisconsin Hospital, John Hopkins Hospital, and the University of Utah) highlighted the following concerns:

  1. Time: At the three study hospitals, the mean total time between the date of service and a Level 3 decision (for cases still awaiting adjudication) was 1,663 days, and 70 percent of the appeals time was spent in the hands of the government.
  2. Overturn rate: Approximately 7 in 10 appeals reaching Level 3 were favorable to the three study hospitals.

Taking a Closer Look

The fact that 70 percent of appeals were favorable to the three hospitals raises the legitimate question of whether there should have been denials in the first place. A larger question to consider is this: to what extent do documentation insufficiencies play a role and provide ammunition for Medicare contractors to question the validity of a claim, whether for medical necessity, DRG downcodes, or clinical validation? One will not be able to answer that unequivocally without conducting individual chart reviews and weighing the merits of each denial. However, I am confident that it is reasonable to say that more robust, effective documentation may alleviate some of these costly denials, many of which are again eventually overturned over time (but with an exorbitant amount of funds spent when considering time,  labor costs, and other human capital). More robust documentation means more effective documentation, reflective of the patient’s severity of illness. It also means improvements to clinical thought processes, judgment and medical decision-making, diagnostic clinical rationale, progress of the patient, and content of the discharge summary.

Limiting Factor in CDI

A major limiting factor in current clinical documentation improvement (CDI) structures and frameworks is rooted in its founding heritage of reimbursement. Clinical documentation improvement programs came into play in the early 1980s as a knee-jerk reaction to the DRG prospective payment system. While CDI has evolved over time, the thrust of program efforts has long been securing reimbursement through CC/MCC capture and principal diagnosis optimization, each supporting optimal code and MS-DRG assignment. Granted, I am a staunch supporter of hospitals and other providers being reimbursed fairly for services rendered. There is certainly nothing aloof regarding optimizing revenue cycle in the interest of continuing operations. Where I am odds with most CDI programs is the underlying emphasis upon goosing the case mix and reimbursement, with little regard and understanding of the true value CDI specialists can bring to the table. Numerous clinical documentation opportunities present themselves in nearly every record that a CDI specialist reviews, yet many are not capitalized upon because they are not germane to the specialist’s job duties and responsibilities. Quite frankly, CDI specialists are not trained in best-practice standards of clinical documentation aside from capturing diagnoses relevant to the MS-DRG system. CDI consulting companies and CDI boot camps perpetuate and control the territorial space of the profession.  CDI today is vetted in shallow review of diagnoses, with overall effectiveness of specialists measured by key performance indicators centering upon generating revenue. Sadly, though, the revenue CFOs believe the programs are generating are mirages – now you see it, now you don’t – almost like voodoo money.

Why the reference to “voodoo money?” CDI consulting companies are masters in promoting and perpetuating their consulting program life cycles by utilizing KPIs that place the success of their programs in the best light. KPIs such as case mix increase, CC/MCC capture rate, and MS-DRG ratios are not valid or reliable measures of success of any program due to the fact the downstream revenue is not assured. A more reliable and valid measure of effectiveness for any CDI initiative is net patient revenue aligning and integrating with the revenue cycle, funding the mission of the hospital. In other words, all the denials requiring a long cycle of appeals must be factored into the supposed KPIs being reported by most programs.

Ultimate Measure of Success

The ultimate measure of success of a CDI program is quantifiable improvement in the quality of the documentation that communicates information regarding patient care. This process begins in the emergency room (ER), providing for an accurate account of patient presentation to the ER, workup and care received, patient response to care, results of diagnostic workup, and stability (or lack thereof) at the time an attending physician makes the clinical decision to hospitalize the patient.

The H&P construct should outline exchange of information between the patient and others and the physician, and also how and what information was used in the management of the patient. An effective H&P highlights what the physician knew and what he or she was thinking at the time of admission, including a strong clinical picture and account of salient complex medical factors such as the beneficiary’s medical history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk (probability) of an adverse event occurring during the time period for which hospitalization was considered.

In addition, the clinical facts and information supportive of definitive and provisional diagnoses must be clear in the documentation (as opposed to inferred). Unfortunately, H&Ps with widespread documentation insufficiencies contribute to avoidable costly medical necessity denials, requiring literally years of exhausting appeal rights, as the SHM blog highlights.

Progress notes are out of control, with senseless cut-and-pasted sections detracting from reporting of the patient’s progress in treatment and sense of healthcare status (i.e., is the patient responding to treatment, getting worse, getting better, maintaining the status quo, etc.?) Speaking of H&Ps, the completeness and the effectiveness in the telling of the patient story, describing and showing the clinical picture of what the physician was thinking and knew at the time of admission, is paramount to demonstrating medical necessity and adherence to CMS’s two-midnight rule governing inpatient admission. Take a look at the MLN Matters Article titled “Medical Review of Hospital Claims for Part A Payment.” You will see how CDI specialists can impact the quality and completeness of the documentation.

Until CDI programs come to grips and recognize the perils of current initiatives in sowing the seed for later denials, understand the urgency of transformation to processes that produce improvement, and train CDI specialists in the mechanics of true chart review, identification of insufficiencies, and how best to work with our physician advisors to properly address with the medical staff, the profession will continue to perpetuate unnecessary denials. Case in point: consider a scenario in which CDI secures a MCC diagnosis such as acute encephalopathy, the only MCC in the case, and the third-party payer uses one of many edits to flag the case, reviews the documentation, and proceeds to refute the diagnosis based on lack of clinical information and facts of the case supporting the diagnosis. Generation of compliant queries using clinical indicators bears no resemblance to affecting positive change in overall physician behavior as it pertains to patterns of documentation.

Clinical facts and information, in the case, a requisite of documentation for reporting of excellent, patient-centered quality-focused care, is still missing from the chart after CDI review.

Closing Remarks

The following reminder from Palmetto GBA, a CMS Medicare Administrative Contractor (MAC), summarizes the state of documentation in the medical record: Lack of Documentation

Lack of documentation in the medical record is the No. 1 reason for claims being denied for payment. Providers can fix that by documenting the following:

  • History of illness, from onset to decision for surgery
  • Prior courses of treatment and results
  • Current symptoms and functional limitations
  • Physical exam detailing objective findings supporting history of illness
  • Results of any special tests

In my next piece, I will discuss the transformational process CDI must embrace and incorporate into any initiative as a segue to achievement of documentation that communicates versus documentation that reimburses.


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