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Over the past 30 years, since institution of the DRG system for hospital reimbursement under the Medicare Inpatient Prospective Payment System (IPPS), hospitals would be marketed to by companies that had developed “the solution to all your problems” and would bring in experts to address maximizing Medicare reimbursement. Why?  First of all, Medicare regulations indicate that hospitals should bill for all they are due in this system. They SHOULD optimize reimbursement.  After all, why should you suffer if you’re not familiar with, or an expert in, dealing with this new system?

With the goal of maximizing reimbursement for Medicare DRGs and, since a few years ago, MS-DRGs, companies used various tactics to up the ante. A variety of initiatives emerged for addressing the proper techniques in this simplistic billing method. Some providers went astray (and went farther and farther astray) and, once the federal government caught on to some of these tactics, it started sending in the troops to recoup a lot of money billed and paid to less than clinically honest methods. Medicare started doing it on its own, then started contracting out to the PROs and the QIOs and now RACs because there was so much going on out there.

Were hospitals purposely billing dishonestly? Not much at all. Often they were duped by the snake oil salesmen, thinking they were capturing the proper reimbursement all along. Heck, if all you need is a principal diagnosis code worth more than another principal diagnosis code, and a secondary diagnosis code worth more than another secondary diagnosis code, and a principal procedure code worth more than another principal procedure code, how complicated could it be? All the salesmen had to do was convince the hospital that they were following the rules. And this is still going on. The sales pitch is still the same, the techniques are still the same, and the outcomes are still the same. Short-term gains are followed by long-term losses. And costs of healthcare have mounted the more we have to develop infrastructure to get the reimbursement and defend against losing the reimbursement – and we often still lose the reimbursement.

Yet very recently, the environment has changed. The old tricks are biting you in more than just the pocketbook. Folks who only know how to manipulate medical records and coding based on the old system are still selling and delivering the old system, and the old system has been out of date for 10 years.  And many are still falling for it.

Certain initiatives started by Medicare have spread to the private insurers, and Medicaid’s system is being adopted by healthcare areas in which the entire environment of billing is where most acute-care hospitals were in the 1980s. We are all being held to task for data demonstrating that we are playing by the rules. The concept of value-based purchasing has been around for a heck of a long time in the private sector, but ever since Medicare gave it criteria and teeth, everyone is jumping on the bandwagon. And those hospitals and systems that are stuck in the days of Medicare past, even though they advertise that “we have decreased readmissions for congestive heart failure,” frequently just don’t get it.

You have to have the data prove you’re value-based. And it’s more than a reduction in readmissions for one diagnosis. It’s of massive proportions. It’s demonstrable reduced severity-adjusted mortality for all diagnoses. It’s reduced patient harm, whether in the areas of identified patient safety indicators or hospital-acquired conditions or things that don’t yet fall into either of these categories. It’s reduced readmissions after admission for anything, not just acute MI, heart failure, and pneumonia. It’s improved patient satisfaction. It’s care integration of all diagnoses for all patients leading to best care potential wherever the patients are, whatever the diagnosis, whatever the age. It’s overall better outcomes. And it’s all patients, all payors, all physicians.

A school board looking for a hospital to contract with for their teachers and employees doesn’t care how you look with Medicare. They want to know about people in their age group. A children’s hospital looking for an insurer for their employees could care less how you do with people who have long since retired. A mom looking for someone to take care of her child with cystic fibrosis doesn’t care about how you do with Medicare patients with COPD.

Every day I see advertisements for consultants who brag that “we’re going to improve your CMI.” “We’re experts in MS-DRGs.” “Improve your DRG accuracy.” “We talk CC/MCC Capture.” All these people know how to do is to impact the principal diagnosis, one secondary diagnosis identified as a CC or MCC, and a principal procedure assignment. It doesn’t matter what they say in their advertisements – if that’s all you get, you’re sunk.

First of all, it’s only Medicare charts that see any impact. The other 50 percent of your charts don’t get touched. Children’s hospitals, which traditionally have been paid on a per diem basis, increasingly are going to APR-DRGs – and some states have been using APR-DRGs for standard acute-care hospitals for a long time. Children’s hospitals get consultants in to help them with documentation when they are due to transition to a near-DRG based reimbursement system, and they select consultants who only have experience in dealing with Medicare DRG charts and who know nothing about children’s diseases (but they have great marketing). The trainees at the children’s hospitals wind up training the consultants, and they still get it wrong. When you capture additional diagnoses that affect APR-DRGs and they’re bogus in the pediatric population – or just plain bogus – the data is wrong, the reimbursement is wrong, and children’s hospitals go the way of the others. And worst of all, with a Medicare DRG mindset, who’s going to determine that ICD-10, much less ICD-9, has some errors in dealing with kids? After all, everyone has been making ICD good for Medicare. Children’s hospitals have long been underserved.

Moving on, a common practice has been to identify complication codes as secondary diagnoses – because they’re CCs or MCCs and will increase reimbursement. But many of these are PSIs now. Some are HACs now. All of them are complications of care. And if your medical staff deserves to get dinged because of inappropriate assignment of complication codes today, you’ll be out of business tomorrow. Yes, physicians and physician groups are being deselected by insurers because of bad data. Hospitals are being deselected for being too dangerous. And in many cases these are self-inflicted wounds. 

Folks put themselves into silos. You get one team working on reducing readmissions for AMI, another for pneumonia, another for CHF, another for stroke – and nobody develops care coordination systems that address it all. There are separate teams for core measures for AMI, pneumonia, heart failure, and stroke – and they’re not included. There are CDI folks who identify all of the diseases these AMI, pneumonia, heart failure, and stroke patients have – and nobody looks at anything other than the AMI, pneumonia, heart failure, and stroke. Others work to reduce infections in central lines, post-operative wounds, mortality in sepsis – and they don’t talk to each other. And the patients suffer.

Traditionally excluded from CDI initiatives are certain elements of the Medical staff, because traditionally, they hadn’t had much impact on the Medicare inpatient payment system. Again, that time is long gone. Despite the fact that much in the way of psychiatric care is delivered as outpatient services, the capability of having psychiatric/psychological evaluation of inpatients in preparation for discharge can have a massive impact on patient safety, reduced readmissions, severity-adjusted data, and patient and family satisfaction. This holistic view of patients’ and families’ needs and dynamics certainly can be instituted via triage by social services, but focusing on high-risk patients can lead to long-term positive outcomes. A child with diabetes needs psychological support. A 45-year-old man with his first acute myocardial infarction can become a cardiac cripple. Patients with morbid obesity and the myriad of complications it brings can benefit from an integrated approach. Crohn’s disease, visible dermatitis, asthma, spastic colitis all benefit from a unified approach – and how many think of that?

Then there is the complexity of the two-midnight rule. The history of this concept – a proper environment for patient care – goes back decades. It once was that hospitals might bring a patient in for 24-hour under OBS so they could get reimbursed with the overall higher payments based on utilization rather than the DRG. Hospitals would (and still do) bring patients in for inpatient reimbursement (whether Medicare, Medicaid, or private insurance) when all that was needed was either six hours of monitoring or working with social services to get the patient placed properly. Younger folks who have to go to work are often regaled with a weekend stay for four hours of care and workup because the attending is at a golf tournament and can’t see him until Monday morning when all that was needed was some rehydration for his episode of gastroenteritis last night. If protocol-driven OBS units were in place, this two-midnight Ghost of Christmas Future would have no scary implications at all. And whether it remains or is repealed is irrelevant. Treating the patient properly, making decisions for the patient rather than for the institution or for the doctor’s convenience, leads to better outcomes and better patient satisfaction.

You all have an opportunity now. Get your resources together and play the whiteboard game. Identify all of the needs for success, all of the goals of your institution for the real future. Write down all of the initiatives and all of the personnel you have devoted to them. Identify those that have considerable overlap and those you haven’t gotten to yet. Then figure out how to get from here to there. You’ll likely find personnel resources galore that can be shared or transferred. You’ll find out that attending to all patients’ needs properly and honestly will probably bear sweeter fruit than silo-ing to Medicare only and having others who don’t know the entire field of diagnostic information deal with private insurance.

Do it before you get to ICD-10. Heck, start introducing ICD-10 to your medical staff now. I don’t mean the computer-based learning modules that take the doctors away from the bedside and leave them with no practical experience on learning anything past the next 10 minutes. Get your electronic systems introduced to the physicians now so that they will have daily support for a year. Then they’ll learn by repetition and will be able to use what they learn in their offices – and that’s good for everybody. Get them to communicate now. When one physician asks another for a consult and the medical record demonstrates what the requestor already knows and doesn’t know, it’s so much easier and so much more efficient for the consultant. Get that specificity on the charts.

The worst that can happen is that the physicians will think more about their patients – and how bad is that?

About the Author

Robert S. Gold, MD, is a nationally known physician, responsible for having championed Clinical Documentation with a peer-to-peer educational approach in hospital organizations. Dr. Gold is a cofounder and the CEO for DCBA, Inc., a consulting firm that concentrates on development of Clinical Documentation Improvement (CDI) programs that aid in proper data streams, proper communication within the medical records and proper reimbursement.

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