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February 2015

Auditors Take Aim at DRGs
By Lisa A. Eramo
For The Record
Vol. 27 No. 2 P. 20

Down in the dumps over denied or lowered DRGs? Consider these proactive strategies.

While the sheer volume of audits has increased exponentially over time, so, too, has the level of scrutiny under which hospitals find themselves. As a result, coders often undercode out of fear that an auditor will lower the diagnosis-related group (DRG) or deny the claim entirely.

"Hospital coding has been under scrutiny ever since the DRG really became the currency of health care," says Becky DeGrosky, RHIT, product manager at TruCode, a coding solutions provider. However, recovery audit contractors (RACs) have taken the concept of auditing to an entirely different level. "They were so successful that the commercial carriers increased their review of the coding. Hospitals are constantly under scrutiny for everything they do," she says.

Commercial payers have become particularly aggressive with their audit programs, says Cindy Smith, RHIT, CCS, senior national compliance and project manager at himagine solutions (formerly Kforce Healthcare). "CMS [the Centers for Medicare & Medicaid Services] has been very vocal about the money it has recovered through the RAC program. Commercial payers see this as a catalyst to recovery money and want their share as well," she says. "Commercial payers may be even more focused at times because they have a smaller population to focus on compared to a RAC."

The Genesis of Disputes
Candice Koldyke, RHIA, CCS, C-CDI, director of coding education at Memorial Healthcare System in Hollywood, Florida, says even though the hospital hasn't been subject to a high volume of audits yet, she plans to implement a process to bulletproof claims for the auditors' inevitable arrival. The process includes a combination of internal quality audits and physician/coder education.

Koldyke, who previously worked at a large acute care hospital in Indianapolis, believes being proactive is the key to minimizing external auditor scrutiny. Part of the challenge at her previous place of employment was that various auditors used different types of clinical criteria when auditing. Take, for example, acute renal failure. "It was hard for us to appeal these," Koldyke says, adding that it's difficult to track what each auditor requires in terms of documentation. "We felt like if we used more stringent criteria, we would be covered regardless of what game the auditors were playing. We had to play the game, but we first had to understand the game we were playing."

With help and input from medical staff, Koldyke assisted in developing an internal policy for acute renal failure based on the Acute Kidney Injury Network (AKIN) criteria. She then educated physicians, clinical documentation improvement (CDI) specialists, and coders on the AKIN criteria and monitored denials accordingly.

However, disagreements between auditors and coders that result in a lower DRG payment can occur even when both parties use the same tool, DeGrosky says.

TruCode's encoder product—used by hospitals, consultants, commercial payers, and even some RACs—integrates coding guidelines and references directly into the interface so users can validate code assignment in real time. She says hospitals use the product to ensure coding accuracy while auditors use it to glean slight ambiguities that can justify lower DRGs.

How can disputes occur when both entities use the same technology? "If the role of the coder was simply to add the numbers to the records, then we'd all add the same numbers and everything would match," DeGrosky says. "But the role of the coder is to determine what diagnoses and procedures should get the numbers added. Coders read the medical record to make that interpretation."

Experts agree that auditors commonly target DRGs for which there is only one complication or comorbidity (CC) or major CC (MCC). If the auditor can dispute a CC or MCC, the case automatically shifts to a lower DRG. Encephalopathy and respiratory failure are common examples, Smith says.

Kwashiorkor, a form of severe protein malnutrition that generally affects children living in tropical and subtropical climates of the world during periods of famine or insufficient food supply, is another example. The diagnosis—an MCC—has been the focus of countless Office of Inspector General (OIG) investigations, the most recent of which required one New Jersey hospital to repay $85,000. In another case, a York, Pennsylvania, hospital was mandated to repay more than $200,000. The OIG has also listed the diagnosis in its 2015 Work Plan for further investigation.

Coders must understand the signs and symptoms of all nutritional problems, including malnutrition, Smith says. Nutritionists and dietitians can help facilitate accurate documentation, but coders ultimately must be aware that kwashiorkor, in particular, requires very specific clinical indicators. "In many facilities, the case is referred to the physician for further clarification of the malnutrition and to confirm if, in fact, the diagnosis is kwashiorkor," Smith says.

How to Ensure Clean Claims
There's no doubt auditors are here to stay. However, experts agree that there are plenty of strategies that organizations can use to reduce the likelihood that external auditors will lower a DRG. Consider the following:

• Hire the best and brightest coders. "Diversity of experience across multiple health care settings enables a coder to develop a wealth of experience," says Cheryl Bowling, RHIT, CCS, CHC, C-CDI, managing director of compliance at himagine solutions. "A coder who possesses detailed knowledge of disease, illness, and injuries—as well as the resultant treatments—allows him or her to be far more effective when reviewing a medical record and following up on requests for documentation. It takes a certain amount of time and varied experiences [to hone this skill]."

Sandra Routhier, RHIA, CCS, an independent coding consultant, agrees that hiring quality coders is a must. "When it comes to inpatient coding, it really does take someone with experience and good clinical knowledge and a good grasp of coding guidelines, index and tabular instructions, and Coding Clinic advice," she says. "The most important quality is a coder's ability to read a medical record and glean from it the conditions and procedures that can be coded."

Although hiring and training new graduates is an option, it's an avenue that each organization must explore individually, Routhier says. Organizations must be willing to invest the time and resources necessary to develop a strong training program that will ultimately benefit the hospital, she adds.

• To retain coders, know what they want. Retention is an important part of the coding puzzle—especially hanging on to coders who have amassed significant facility-specific knowledge. These are the coders who can help train new staff members and share lessons learned. But what entices coders to stay at an organization?

First and foremost, coders want to feel respected, DeGrosky says. "When an auditor finds something, don't shame the coder. You need to make it a positive learning experience," she says.

Remember that coders aren't the only individuals who affect coding quality, data integrity, and reimbursement. "It's the entire documentation process. Even ancillary services—wound care notes, physical therapy notes, and dietitian notes—are all important in supporting the diagnoses or conditions that are being treated. It's really a team approach," Smith says. "We have become too accustomed to saying, 'It's a coding issue,' when it's really not just a coding issue."

One way organizations can demonstrate respect for coders is to provide continuing education. If organizations can't afford an extensive training budget, DeGrosky says managers and directors should consider advocating for paid time off to allow coders to attend education sessions.

In addition to respect and continuing education opportunities, coders also appreciate having access to state-of-the-art technology, DeGrosky says. For example, computer-assisted coding can greatly enhance coding compliance when used appropriately, she says.

A fair salary, flexible hours, and the option to work from home also are appealing to many coders, says Judith Kay Sturgeon, CCS, CCDS, clinical coding/reimbursement compliance manager at Harris Health System in Houston. "Salary doesn't guarantee skill, but the really good coders can make really good money," she says. "If you are trying to get them to come to work for you, you have to provide them with more than they're getting now."

• Hold coders accountable. Ensure that individual coders have the opportunity to review any and all claims to which auditors assigned lower DRGs or denied outright, Routhier says. Managers and directors should ask coders for their rationale for code assignment and the resources they used to reach their decision. Where in the record did they find important information? What clinical support had they identified?

If a particular inpatient coder's work results in repeated denials or lower DRG payments, Routhier says consider moving him or her to emergency department, outpatient, or ancillary procedure coding. Not every coder is suitable for the inpatient setting, and the sooner managers reach this conclusion, the better it is for the department and the organization as a whole, she says.

• Provide feedback to coders. Coders want and need feedback to be able to code appropriately going forward. At Memorial Healthcare System, Koldyke has begun to roll out internal coding quality audits in anticipation of external auditor scrutiny. Coders receive individual feedback based on these audits and learn about general auditing trends. During department meetings, coders discuss specific DRG targets and examine deidentified coding scenarios (ie, the individual coder is not identified). Koldyke created an education file on a shared drive featuring Coding Clinic references and guidelines to support coding decisions and ensure consistency.

• Integrate coding and CDI. Organizations must open the lines of communication between coders and CDI specialists despite the fact that the two increasingly report to different departments, Routhier says. Coders are frequently included under revenue cycle while CDI is moving more toward process improvement or case management. Still, the two functions are intertwined.

System challenges also make communication difficult, she adds. For example, coders may not have access to CDI software or even be aware that certain diagnoses are being queried concurrently.

• Address copy-and-paste problems in the EMR. Auditors frequently lower DRGs when they discover that ruled-out conditions were coded inappropriately. Routhier says confusion regarding ruled-out conditions has always been an issue, but the problem becomes magnified when information is copied and pasted repeatedly without clinical validation.

"One of the challenges for coders today is just the volume of information that coders need to read in a record to get to the decision of what can be coded," she says. "What happens is that information is cut, pasted, and brought forward day after day, and even when conditions were ruled out, the doctor still keeps it in his or her documentation."

Take the example of a urinary tract infection (UTI). On admission, a urinalysis may be positive. A physician orders a culture and starts the patient on an antibiotic. Even though the culture comes back negative, the physician continues to copy and paste the UTI diagnosis in the documentation, resulting in it being coded as though it continued to exist throughout the patient's stay. An auditor can then lower the DRG by denying the UTI, Routhier says.

• Minimize ambiguity. "There are so many rules and so many different providers who document in the chart, especially at the big teaching facilities," Sturgeon says. "Which physician's note outranks the other? … How many times was an electronic note revised, and does only the last one count? The auditor always has the fallback of 'It's ambiguous, so the coder should have queried.'"

Organizations must develop detailed query guidelines and ensure that coders know when it's appropriate to ask for clarification. According to AHIMA's practice brief "Managing an Effective Query Process," coders should query when a patient's record fails to meet one of the following criteria: legibility; completeness; clarity; consistency; and precision.

• Don't let the problem list become a problem. According to stage 1 meaningful use requirements, organizations must maintain an up-to-date problem list of current and active diagnoses for more than 80% of their patients. Routhier says the challenge is to ensure that physicians use and maintain this list properly.

"Hospitals that I've reviewed across the country have done a very poor job at setting up and training their physicians on the proper use and maintenance of a problem list," she says. "Conditions get on this problem list, and this list gets pulled in electronically to H&Ps [history and physical examinations], consults, daily progress notes, and discharge summaries. It includes conditions that were treated the admission before or five admissions before."

If coders fail to validate each diagnosis on the problem list (ie, look for active treatment, signs, or symptoms) before coding, an auditor is likely to lower a DRG, Routhier says.

• Perform routine audits. Organizations can enlist the help of consultants or perform audits using internal resources. The idea is to catch errors before the auditors do and then perform targeted education, Routhier says. Audits help identify a problem's root cause, including coding errors, physician documentation insufficiencies, EMR challenges, payer processing miscues, and even data transmission errors.

During internal audits, examine all claim types, not just those that are RAC targets. Routhier says this strategy often reveals where hospitals are leaving money on the table.

Also use audits to help process improvement. For example, how often does information included in the discharge summary affect code assignment? Does a lack of access to the discharge summary result in inappropriate coding of CC or MCC conditions? Physicians often use the discharge summary to further clarify a symptom (eg, syncope or chest pain) with a more definitive diagnosis, Routhier says. If coders don't wait for the discharge summary before coding, what effect does this have on coding accuracy? Can it potentially yield an inappropriate higher-paying DRG?

Keep in mind that auditors have access to the entire record, including the discharge summary, when auditing. Coders must be granted that same access.

• Review all external postaudit findings. Although this may be resource intensive, DeGrosky says coding managers or CDI specialists should perform this task to ensure that the auditor's findings are correct and justified. "If you disagree, you should obviously appeal," she adds.

Smith agrees. "We're coding for data integrity. If you have that clinical documentation that supports the diagnosis, definitely appeal that case," she notes.

Bowling says if organizations detect a trend or a pattern of inappropriate denials or lower DRG payments, they must contact federal agencies such as the American Hospital Association and the CMS as well as private payers to expose any wrongdoing.

It's also important to review cases for which there were no findings, says Routhier, adding that sharing the positive feedback with coders and physicians makes them aware of what they're doing well.

• Form an audit response team. This group monitors audit results, including the reasons for denials or lower DRG payments. Koldyke recommends its members include CDI specialists, compliance staff, coders, and physician advisors. Organize monthly or quarterly meetings to discuss audit findings and share compliance ideas. Team members will benefit from information about general trends and specific examples of denials and lower DRG payments, she says.

"We don't want [the findings] to go to the one coder who had the error. We need to communicate it across the board," says Koldyke, who recommends posting the minutes from each meeting on a shared drive in order to deliver consistent information.

— Lisa A. Eramo is a freelance writer and editor in Cranston, Rhode Island, who specializes in HIM, medical coding, and health care regulatory topics.