The Value of Coding Quality to Your Overall Performance
Two fundamentals of revenue cycle performance are critical to sustaining financial stability:
Capturing and billing for every service for which you are entitled to be reimbursed by a payer
Ensuring you are reimbursed by the payer for the appropriate amount
These two goals speak to the need for your organization to excel at coding – think precise coding that captures the diagnoses and services for each patient based on the clinical documentation for that patient’s episode of care. Then, and only then, can you bill for the correct services and have payers pay you the correct amount while minimizing risks related to potential audits and recoupments.
Ensuring that your coding fully and accurately reflects your patients’ diagnoses and the care they receive is foundational and non-negotiable for your hospital or health system to meet your revenue performance goals.
A report from the Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG) illustrates how inaccurate assignment of just a couple codes can lead to overpayments and potential Medicare recoupments from hospitals totaling approximately $1 billion. The OIG audited the clinical documentation supporting a sample of 200 randomly selected Medicare claims totaling $2.9 million filed by hospitals during a 2 year period, which identified two codes for a diagnosis of severe malnutrition.
The codes were:
E41: Nutritional marasmus
E43: Unspecified severe protein-calorie malnutrition
The OIG audit found that, of the 200 Medicare claims:
82%included the two codes when the clinical documentation supported neither of the two codes or other malnutrition codes
13.5%were coded correctly by hospitals based on the clinical documentation
4.5%should have, but did not, include both codes based on the clinical documentation
The net result, according to the report, was that Medicare had overpaid the hospitals $914,128 for the 164 incorrectly coded claims over the two-year period. Extrapolated to all hospital claims that included the two codes, the OIG estimated that Medicare had overpaid hospitals approximately $1 billion in the aggregate.
The OIG and the Centers for Medicare & Medicaid Services (CMS) mutually agreed to reopen hospitals’ cost reports and to order its recovery audit contractors to initiate recoupment of overpayments to hospitals resulting from alleged “upcoding” of claims for patients suffering from severe malnutrition.
Now, more than ever, $1 billion is a direct and unwelcome hit on hospitals and health systems that haven’t optimized the quality of their coding by effectively monitoring their coders’ to compliance with applicable coding guidelines and requirements from CMS and other payers. This begs the question – what can you do about it when you have so many other things on your financial plate right now?
How to enhance your coding compliance and quality programs:
Proactively review coding quality and compliance audit data to identify problem areas up front so that you can take appropriate steps to prevent bigger issues.
Beef up your coder training and education programs. Adopt a risk-based approach to topic selection, with focus on areas identified by OIG and other authorities, as well as opportunities identified through your proactive data analysis.
Conduct both routine and specialty-based coding reviews to evaluate the quality and accuracy of your coding for all your service lines.
Promptly investigate, review and mitigate all identified issues, patterns and trends which could suggest potential miscoding or upcoding that is inconsistent with your clinical documentation.
Continuously monitor applicable billing and coding laws and guidelines and ensure your policies and training are updated and maintained to reflect the most recent changes.
Every dollar counts as hospitals and health systems navigate through the pandemic and its operational and financial impacts. Accurate coding and reimbursement are vital to your hospital or health system’s success.
TAKEAWAY
Engagement Is Healthcare’s New Currency
Ensuring that your coding fully and accurately reflects your patients’ diagnoses and the care they receive is foundational and non-negotiable for your hospital or health system to meet your revenue performance goals. For many hospitals and health systems that don’t have the bandwidth or know-how to establish best-in-class coding compliance and quality functions, bringing on a strategic partner with decades of coding experience, existing relationships with many payers and proven advanced technology to help optimize coding accuracy and efficiency could exponentially boost the effectiveness and success of your coding and billing functions. Conifer’s coding and compliance training, education, monitoring and audit programs can help improve your organization’s coding quality and outcomes.
