Shore up your clinical documentation

February 10, 2011

If you see patients in the hospital, it's important to realize that clinical language does not necessarily equate to coding language.

If you see patients in the hospital, it's important to realize that clinical language does not necessarily equate to coding language. To optimize the chances of full and accurate coding and reimbursements, the related clinical documentation must be specific and precise. And, as we know: If it's not documented, it didn't happen and it does not exist.

Currently, Medicare reimbursement for hospitals involves four simple steps:

1. the physician documents all relevant diagnoses and procedures in the chart;

3. each MS-DRG has a defined RW (relative weight);

4. RW drives reimbursement.

The current Medicare system was started in 1980s when the Reagan administration instituted sweeping reforms in the Medicare reimbursement system to keep the program from insolvency. The emergence of the Prospective Payment System (PPS) was passed into law in 1983. The PPS changed the manner of reimbursement from paying hospitals for services rendered to a new model of payment by predetermined, set rate based on diagnosis. The Diagnostic Related Groups (DRG) system was created by Robert Barclay Fetter and John Devereaux Thompson from Yale University with support from what is now the Centers for Medicare and Medicaid Services (CMS), to be used as a template for payment to hospitals. In 2008, the Rand Corporation was commissioned by CMS to evaluate alternative systems to reclassify diagnoses with severity-adjusted DRGs. MS-DRG was developed and is the method of payment being used presently.

In the current MS-DRG, base DRGs have been divided into subgroups, a tiered system, and further assignment depending on the presence or absence of major co-morbidity (MCC) and co-morbidity (CC).

This design for MS-DRGs establishes that one of the most important steps in the process of determining appropriate reimbursement for hospitals is dependent on physician documentation. If not documented properly, the final MS-DRG assigned by the coding department may not be correct, and the payer will be underbilled.

The following example illustrates the effects of proper coding. An elderly patient is admitted to the hospital with a febrile illness, showing signs of dehydration with poor urinary output. Her laboratory data show leukocytosis with bandemia, an elevated BUN and creatinine, and an abnormal urine culture showing E coli. She's properly treated and discharged with the physician coding: urospesis with dehydration and renal insufficiency.

If the urosepsis is coded to DRG 690 (UTI) as the principal diagnosis (DRG 690 [length of stay or LOS=3.5 days]; weight=0.7708), the reimbursement would calculate to $5,221.

Had the physician coded as sepsis secondary to UTI as the principal diagnosis alone (DRG 872 [LOS=4.6], weight=1.1155), reimbursement would have calculated to $7,720. Furthermore, had the diagnosis been coded as sepsis secondary to UTI as the principal diagnosis with any MCC such as acute renal injury secondary to dehydration (DRG 871 [LOS=5.4]; weight=1.8437), reimbursement would be an estimated $14,284.

The impact of proper documentation is clearly apparent. There has been no change in the evaluation, treatment, and disposition of the patient, yet the language that elucidates the severity of the patient's illness is reflected in variance of the RW.