The shock of ICD-10 implementation this past fall has faded and healthcare providers are settling into the “new normal.” Denials are not the only thing your receivables department has to worry about. The hidden threat to a hospital or clinic’s revenue could lie in staff being able to consistently document their encounters with patients and making sure full specificity is attained when performing the coding and billing. You could be missing out on the full negotiated reimbursement of approved claims if your team isn’t accurately recording patient interactions.
It is important for health systems to be conscious of their actual reimbursements versus what they are expecting to receive from payers. Diagnostic Related Groups or “DRGs” need to be accurately documented to make sure you are receiving the correct amount from insurance providers. For example, if a patient comes in with a standard case of pneumonia they may be in the lowest DRG for that condition and insurance would pay out the agreed upon fee. If the pneumonia has progressed to include one or more co-morbid conditions then the encounter would move to a higher DRG and the compensation rate would be weighted accordingly to take into account longer patient stays, additional treatments and other factors. Not documenting the appropriate DRG level drastically cuts your reimbursements.
Specificity is important from the very start of the encounter. Physicians are the key to getting the full reimbursement agreed to in your payer contracts. The coding specialist’s role is to apply the correct codes from the physician’s documentation. If the physician’s documentation is not specific then the coder is left with using non-specific codes which could translate into lower acuity levels, lower quality scores, lower reimbursement and does not accurately reflect the story of the patient.
Documentation issues can be even more pronounced in rural health settings. A lack of staffing resources can put a lot of pressure on documenting the full detail of care they are providing patients. They may prioritize one set of codes, such as evaluation and management (E&M) while giving less attention to others (CPT). These gaps in the treatment record can create hurdles down the road as insurance may not have the encounter history they need to justify pre-authorizations of follow up services like MRI’s or an endoscopy. Physicians are becoming more aware of the link between documentation and ICD/CPT codes and since Value Based Purchasing is on the horizon physicians also understand how documentation and coding may be reflected in their future quality scores.
Specificity is very important as it affects the health system as a whole. Medical Record Documentation is one of the foundations of our health system and only accurate, consistent and complete documentation can translate into the data and information needed to determine correct reimbursements, support clinical quality, and demonstrate medical necessity. Many decisions are made from medical record documentation regarding treatment, payment and health care operations. An abundance of data is gathered from ICD and CPT codes so the integrity of the documentation and the coding are crucial for evaluation and decision making at all levels.
Teaming with a full-service revenue cycle management company takes the pressure off your team and ensures claims are being billed accurately and being payed properly under the agreed upon contract terms you have with insurance providers. A trusted RCM management company like Signature Performance can come alongside your organization and help augment your business office and improve your bottom line.