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July 22, 2009

Checks and Balances
By Selena Chavis
For The Record
Vol. 21 No. 14 P. 12

Experts—who say coding audits should be part of every hospital’s compliance plan—suggest six strategies for setting up the best possible program.

If you are an HIM professional working in a hospital, chances are you have participated in a coding audit, complete coding audits on a regular basis, or have at least had discussions about implementing an internal strategy for such initiatives.

It’s a sign of the times. As hospitals continue to feel pressure from federal watchdogs for improved compliance while seeking to capitalize on all revenues in a tight economy, effective coding practices become key to the overall strategy.

“I think because of this, [hospitals] have really gotten more involved over the last six years,” says Julie Daube, BS, RHIT, CCS, CCS-P, manager of coding quality review and education with Chicago-based Care Communications.

While most healthcare organizations understand the urgency of internal and third-party audits, the effort often may take a backseat to other day-to-day issues, especially as resources continue to be tightened.

“I believe many hospitals have a strategy for completing coding audits, but it may not be most. Internal coding audits require labor time to conduct, and labor time is never in excess, especially in the coding area,” says Rose Dunn, RHIA, CPA, FACHE, chief operating officer with Missouri-based First Class Solutions. “It’s not that some are not doing it ‘good’… rather it’s that there are insufficient hours available to do it.”

Robert S. Gold, MD, an HIM expert and CEO of Atlanta-based DCBA, suggests that the effectiveness of internal audits often comes down to staff expertise. “There is just a lot to know and a lot to learn,” he says, adding that, in his experience, misinterpretations occur quite frequently. “Unless you study a lot, you’ll be left in the dust as things change.”

Gold points out that industry goals for audits fall somewhere in the range of a 90% to 95% accuracy rate and that average standards should not be lower than 95%. With the bar set high for overall performance, industry experts lend their advice on how best to approach coding audits.

1. Establish Measurable Goals
Dunn points out that the first step to establishing a coding compliance program is to define the goals. “Ask ‘Why are we establishing this program?’” she suggests. Potential reasons could include the need to comply with strategies set out by the overall companywide compliance program; an effort to improve the quality of coding, reimbursement, or documentation; a strategy to improve data quality profiles for physicians and facility; or to address issues that surfaced in an external audit.

Daube notes that a good first step usually revolves around establishing a documented policy and procedure. “Facilities will have to decide how often they want this to occur,” she says. “This is often based on the resources. I most often see clients do this quarterly.”

Goals should be measurable and include industry benchmarking, Dunn suggests. “Once the goals are defined, the program should define its ‘current state’ and establish a baseline coding quality expectation,” she says, adding that the gap between the two will help the coding manager identify the audit topics that need to be conducted.

Dunn also suggests using industry resources such as the AHIMA’s Benchmarking to Improve Coding Accuracy and Productivity book, which provides guidelines for measuring coding quality.

2. Choose the Right Team
Experts agree that coding audits are primarily a function of HIM and compliance.
The buck doesn’t stop there, though, according to Gold, who emphasizes that key executives should also be part of the process. “The CEO and board should be made aware of results,” he says, not to mention the chief financial officer (CFO), who is concerned about reimbursement issues.

Daube agrees, adding that “a lot of things don’t get done and don’t get respect without involvement from upper management.”

Dunn says a typical team includes obvious participants such as the compliance officer, the CFO, case management, and HIM. She also suggests there are others who may be considered.

“The chief nurse executive should be involved to ensure the patient care staff promptly adds documents pertinent to the patient in the patient’s file and captures documentation that supports the discharge disposition and that it is accurately entered into the information system,” Dunn says. “The PFS [patient financial services] director needs to understand the nuances of coding guidelines, and when audits are conducted that surface errors that resulted in overbilling a payer, the PFS director must promptly address the rebilling effort and record that it has occurred as part of the organization’s compliance program.”

Daube adds that it’s also a good idea to involve IT and a physician advisor because clinical documentation and reporting are key to the overall goal of improving accuracy.

3. Consider a Layered Approach
Beware of just implementing one strategy model, Gold cautions, pointing to organizations that either use only an internal staff model or those that look solely to external groups to tell them what is wrong.

“A hospital may have a coding manager who is a guru internally who can go over each of the coder’s records for accuracy, but [he or she] may have limitations associated with personality issues or their own knowledge base,” he says. “On the other hand, [external groups] are basically self-proclaimed experts. Somebody has to hold the external auditor to task.”

Gold recommends that alongside an internal audit strategy, healthcare organizations should look to expertise within their corporate head entities, as well as periodically including third-party external consultants.

Dunn says organizations with sufficient internal team staffing—including a coding compliance coordinator—often have the inherent advantage of knowing their team members. “Often, internal staff members are more aware of the weaknesses of team members and can focus their review efforts on those weak points and provide one-on-one education and oversight of those team members until the deficiency is eliminated,” she says.

While many hospitals have an established objective to routinely have an external audit, many may be finding it more difficult to allocate resources to such an endeavor, notes Dunn.

“Hospital margins are very tight these days,” she says, pointing out that if prior audits have found a minimum of concerns, administration may not see the value of future projects unless there has been turnover on the coding team, new compliance concerns have surfaced, a significant coding change has occurred—such as when Medicare severity diagnosis-related groups were implemented—or a recovery audit contractor (RAC) or other external payer has found coding variations. “But those organizations that continue to have external audits do so to validate their internal audit results, including to audit the internal auditor, address sticky situations that have challenged the coding team in the past … and to provide the team with an outside perspective on current coding issues.”

Daube believes depending on internal auditors alone to adequately do the job is unrealistic for many healthcare organizations. “They probably can’t do it as frequently as they need to. … It needs to be one of the top five things on the agenda,” she says. “Even if they can do it biannually and then get outside help more frequently to fill in the gaps, it’s just good to get both perspectives.”

4. Define the Audit
Gold points out that it doesn’t take a major sampling of thousands of records to get the job done. “You don’t have to do this big massive thing and spend zillions of dollars,” he explains, adding that weaknesses usually show up pretty quickly if an auditor is conducting the initiative on a coder-by-coder basis. “If you want to see how well coding is doing, you probably don’t need more than 10 records per coder on the average.”

He also suggests that an organization do a reasonable sampling of service lines. “If you are Indiana University [Medical Center], you probably want to look at transplants. Focus on your most frequent cases,” Gold says.

Potential and known weaknesses should also drive the sampling, Dunn says. “Often, the items audited are those where variances have been identified in the past,” she notes, pointing to indicators such as conditions resulting in denials or a RAC review, high error rates, high reimbursement or cases that may impact reimbursement, and conditions that require specific documentation elements.

Auditing should always occur when a new team member is added, regardless of experience, Dunn says, noting that every facility has its idiosyncrasies and should have published coding guidelines that will often differ from one facility to the next. “New team members may not realize that there are differences,” she says. “When internal auditing occurs routinely on a concurrent basis, the coding manager can catch these oversights early and address the nuances of the facility’s coding practices with the new team member.”

To get the initiative started, Daube suggests that an organization may want to use a broader sampling that includes pulling both random and specific records to obtain a baseline for moving forward. “There is an industry standard that suggests 5% of discharges or 30 per coder,” she notes.

5. Equip Your Team With the Right Tools
Experts suggest that facilities invest in some type of audit software to properly equip their team going forward. While there is an up-front cost, most agree that the return is well worth the purchase.

“I think it typically will pay for itself … just like an investment in external reviews,” Daube says.

For those organizations not willing to make the investment, Dunn says a simple spreadsheet to capture results and demonstrate the auditing program’s value is important. “This tool should display the progress of the program and be able to project the fiscal benefits of the program to those who may be hesitant to fund the program and include the internal or external labor required, educational programs, resources and reference materials, and other expenses,” she says.

Opinions vary as to whether EMRs make the auditing process easier. Gold has found that the lack of EMR standards actually complicates the process, especially when it comes down to reviewing large amounts of text. “I have not seen an EMR program that’s worth anything in order to analyze progress notes,” he says.

Dunn points out that EMRs can potentially help if they have built-in rules to provide notifications of missing elements and identify the presence or absence of some of the conditions to be audited.

A hybrid record environment, where much of the documentation is scanned, can create the same challenges for auditors as it does for coders to find the documentation they need to validate or perform the coding, she adds. “Most coders are accustomed to coding in a color-coded world of record forms,” she says. “Unfortunately, in a scanned record environment, everything is black and white, thus requiring more time to navigate through the record.”

6. Follow Up and Educate
Don’t waste the effort and resources put into a coding audit by not making the most of the resulting data, according to the experts.

“The most important thing is what they do with the results,” Daube says. “The follow-up and education doesn’t happen as frequently as it should, so there’s no measurable improvement.”

Dunn agrees, adding that once the audits are conducted, the results should be compiled and trended until the coding quality goal is achieved consistently. “The results must be shared with the coding team members, used to define educational opportunities for the team members, and utilized to build the next phase of auditing efforts,” she explains.
And don’t stop there, Daube says. Once the goal is achieved, organizations should be looking to broaden their auditing goals to identify new areas of improvement that may not have been in the initial target.

“You don’t want to be stuck in a rut. If you see improvement, broaden the effort,” she suggests.

— Selena Chavis is a Florida-based freelance journalist whose writing appears regularly in various trade and consumer publications covering everything from corporate and managerial topics to healthcare and travel.