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September 18, 2006
I have two words for you: coding auditors. How can something that seems so ordinary strike terror into the hearts of health information managers everywhere? Your department doesn’t have to code anything wrong to feel the beginnings of a peptic ulcer as soon as someone announces that there’s going to be a coding audit. The department members are doing their job, of course, no matter who decides there should be an audit. They make sure there’s no low-hanging fruit or money being left on the table—or whatever the newest buzz phrase is that week. Let’s look at what that really means, however, to the department’s daily process. The impact on staff (and their reputations) depends on several conditions. How Many Charts Will Be Audited? How many charts will be included in the audit will determine how many additional hours you will need to budget for the effort. Remember that you will need to figure time for looking up location, retrieving the charts, then identifying and holding them until the audit is complete. Don’t forget to calculate time to reretrieve any that are pulled in the middle for patient care or physician review and to return them all to file after the auditors have finished. Don’t return them too fast or you’ll be digging them back out for your own reviewers to validate or refute any concerns identified by the initial group of chart detectives. Whose responsibility is it to pay for the additional hours? Do they intend to send internal reviewers or do you have to copy charts and mail them to the auditor? Negotiate that on the front end if you get the opportunity. Who Is Doing the Audit? If it’s the payor that wants a stack of charts pulled, how it pays will generally determine how it reviews. If it pays by percentage of charges, it may be verifying that the codes for expensive cases are being documented and reported correctly. When DRG payors review charts for the fiscal intermediary, whether Medicare, Medicaid, or private insurance companies, their intent is generally to figure out how to pay you less. Medicare is straight and clean—if they decide that your codes are wrong, they will correct your payment whether it is lower or higher. Other payors vary in their concern when it comes to cases for which you may have charged them too little in error. At this point, your financial impact will be determined not only by the coding skill of your staff but in a large part by the coding skill of their staff. Too often the auditing party for a third-party payor uses nursing staff with only utilization review background and has no credentialed coders. While this may be effective for determining whether admissions are appropriate, that skill doesn’t automatically enable it to correctly validate coding or DRGs. Utilization review staff generally try to reconcile the actual cost of the case with the payment of a billed DRG. If they don’t match in severity of illness or intensity of service—or even in length of stay—the nurse-auditor is likely to simply delete the code that generated the higher DRG to reduce the payment to the facility. They’re certain that they’re doing the right thing and often are convinced that the facility is intentionally upcoding. An appeal process may, or may not, be an option. On the other hand, if your facility hires the coding auditor, chances are it will have coding experience and even credentials appropriate to the sample being audited. Its focus is usually the opposite of the payor’s—to identify weak coding skills and/or documentation to get a higher payment, whether it is APCs, DRGs, or fee-for-service opportunities. This is a good thing. With productivity requirements and minimum staffing in too many cases, we need all the help we can get to stay financially solvent. The coding staff may be so loaded with daily tasks that there is little time for training or regular internal audits, and external auditors can help fill in as needed. Beware of overly aggressive consultants/auditors, however. They may try to get your staff to upcode and line you up in the sights of the Office of the Inspector General for later audit. If that happens, you can’t call them back and ask them to explain that it was all their idea. They won’t pay your fines, and the only people you can call for help will be your legal representatives. To prevent such a problem, the general recommendation is to contract at a flat fee for the review rather than pay a percentage of the “found” monies. Who Gets the Report? The rest of the information that needs to be reported can be your responsibility to identify and explain to keep the basic numbers in context. Be sure to review the reported error accounts internally to validate them as true errors. Correct the coding and rebill as appropriate. If you disagree with the reported error, provide documentation and coding rules to validate your position. Then look at the sample volume. Twenty errors in a review of 500 charts is only a 4% error rate. On the other hand, if the auditor reviewed only 100 charts, you’d better have an action plan ready for coder education that would include a subsequent review to make sure the skill level has been upgraded as soon as possible. But there’s more to consider than just the total number of charts. Was it a focused review that pulled only accounts most likely to have coding errors, or was it a truly random sample? The acceptable error rate will vary greatly depending on the answer to that particular question. If the auditor tries to extrapolate how much money that sample would really be worth if all the charts were reviewed, recommend caution until a few of the cases have been rebilled. If the coder missed “COPD” (chronic obstructive pulmonary disease) on the anesthesia consult and dropped a CC, sending a corrected claim with the chart copy is still not likely to get you a corrected payment if that’s the only reference ever made to the diagnosis. It may be a true coding error, but it may not ever change your payment. If the report includes terminology such as “if the doctor had documented ABC then you could have gotten XYZ more dollars,” you should probably have a physician review a few to see whether ABC was even a credible option. No matter how professional and qualified the auditor, it may still be tempted to try and extend its contract based on creative reporting of the results. What to do? When you hear about the impending audit, stock up on antacids for the HIM staff. Dig into the piggy bank to cover the added time and labor costs. Know the auditor’s focus and intent, and be prepared to validate or refute its findings as appropriate. To do that, make sure that most qualified staff members are involved in the findings and the reporting. Perhaps most importantly, don’t start out on the defensive by assuming that the audit will be wrong or a waste of time. The reality is that everyone can benefit from an outside review in some manner. If your coders are doing a great job, it’s good to have someone besides you tell the administrators they are a marvelous group. If room for improvement is identified, your attitude and willingness to improve the staff’s performance will say plenty about how lucky they are to have you. — Judy Sturgeon, CCS, is the hospital coding
senior manager at The University of Texas Medical Branch in Galveston.
While her initial education was in medical technology, she has been
in hospital coding and appeal management for the past 18 years.
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