CDI programs tend to facilitate denials attributable to ingrained reactionary processes perpetuated by the query process.
The COVID-19 public health emergency (PHE) has unleashed untoward burden and financial challenges associated with treating and managing acutely ill patients. Costs associated with such patients is overwhelmingly high, with often extended ICU stays in which the patient slowly turns the corner and wins the battle against COVID-19. The American Hospital Association (AHA), in a bulletin titled Hospitals Face Continued Financial Challenges One Year into the COVID-19 Pandemic, listed the following as being of particular note:
- In 2020, hospital providers were projected to lose an estimated $323 billion, leaving nearly half of America’s hospitals and health systems with negative operating margins by the end of the year;
- Despite the advent of multiple COVID-19 vaccines and a growing number of Americans who have been vaccinated, the pandemic continues to take its toll. Kaufman Hall recently projected that hospitals and health systems could lose an additional $53 billion to $122 billion in revenue in 2021;
- Revenue losses and sluggish recovery of patient volumes have been met with increased expenses, creating the perfect financial storm for hospitals and health systems; and
- As the pandemic persists and patients continue to avoid critical care, hospitals face a long road to recovery in 2021 and beyond.
There is simply no arguing that hospitals are and will continue to be under extreme financial duress due to the COVID pandemic. No day passes when we don’t read about hospitals and health systems resorting to layoffs and reduction and/or elimination of service lines as a means of addressing significant revenue shortfalls. The ultimate end goal is to manage, balance, and eliminate these shortfalls. A concept I learned in business school that still strongly resonates with me after all these years, reinforced and stressed by the dean, was that “no business can cut itself into profitability; instead, the business must be able to grow revenue.” The same notion holds true for hospitals and health systems trying to right the ship, from a financial perspective.
Taking Care of Business
There are a variety of ways to grow revenue, regardless of the type of business, ranging from offering a new service line to increasing revenue in an existing service line, or raising prices for existing lines of services. Raising prices in the near term is not a viable option for most hospitals and health systems, since most of their payer contracts are set in stone through the contract negotiation process, so percentage of charge payer contracts is minimal in most instances, for most facilities. One area in the revenue cycle often overlooked to grow revenue is avoidable medical necessity and clinical validation denials, as well as level-of-care and DRG downgrades, which all significantly impact cost to collect and net patient revenue. All these payer determinations and actions substantially detract from net patient revenue when you factor in administrative cost to appeal and time value; $10,000 today is not worth $10,000 two to six months later from the expected payer due date, given the time to appeal and opportunity cost associated with not collecting and investing the funds in the first place.
How best to reduce unnecessary, avoidable, self-inflicted denials? Doing so starts with a renewed emphasis upon enhancing the value of physician clinical documentation in the medical record. The medical record serves as a communication tool, first and foremost, as opposed to a reimbursement tool. The American College of Physicians sums it up well with the following statements from its Clinical Documentation in the 21st Century: Executive Summary of a Policy position paper:
- The primary goal of EHR-generated documentation should be concise, history-rich notes that reflect the information gathered and are used to develop an impression, a diagnostic and/or treatment plan, and recommended follow-up;
- The primary purpose of clinical documentation should be to support patient care and improve clinical outcomes through enhanced communication;
- The medical record was first used by physicians to record their findings and actions, and as a vehicle to communicate with other physicians who might care for the patient; and
- Clinical documentation serves to track a patient’s condition and communicate the author’s actions and thoughts to other members of the care team.
Taking care of business, investing in a proactive denial avoidance approach to physician documentation, translates into developing and rolling out a well-thought-out initiative to drive measurable, meaningful, and sustainable improvement in the quality and completeness of physician documentation. The consensus from chief financial officers (CFOs) is that if they authorize and fund a “clinical documentation integrity” (CDI) program, they can proceed to check off a box and assume they have invested in an initiative to improve documentation, reduce denials, and optimize revenue. Unfortunately, this assumption is far from the truth; in some ways, it is a fallacy. The overwhelming emphasis of most CDI programs is upon the capture of CC/MCC diagnoses through the query process, thereby impacting outcomes of reimbursement, as opposed to achieving measurable process improvement in physician behavioral patterns of documentation. The end result is diagnoses appearing in the record without concomitant improvement in the overall quality and completeness of the physician’s documentation – which should be supporting the diagnoses through describing the patient story, establishing need for hospital level of care and continued stay, validating diagnoses beyond clinical indicators, including accurate reflection of physician’s clinical judgment and medical decision-making, and clearly reporting the patient’s clinical progression while hospitalized. Current CDI processes remind me of my childhood days and tee-ball, wherein the coach sets the ball on a stationary tee and the batter swings, instead of the ball being pitched. What CDI is accomplishing now is setting the ball on the tee and allowing the payer to hit the record out of the park with ease, denying payment based on medical necessity and clinical validation. In our practice, we see an increasing number of avoidable denials that could be easily alleviated with more robust and effective physician documentation.
Denials Avoidance versus Facilitation
CDI programs tend to facilitate denials attributable to ingrained reactionary processes perpetuated by the query process. Just look at key performance indicators (KPIs) that represent little more than task-based activities, with virtually no bearing on the quality and completeness of physician documentation. By consistently focusing upon activities driving reimbursement outcomes without intervention designed to achieve clinical documentation excellence, health systems stand to generate continued unnecessary payer denials. Complete and accurate documentation, defined by the following, supports the reporting of the patient story every time, embracing the concept of proactive “denials avoidance” versus highly inefficient “denials management:”
- All entries in the medical record must be complete. A medical record is considered complete if it contains sufficient information to identify the patient, support the diagnosis/condition, justify the care, treatment, and services; document the course and results of care, treatment, and services; and promote continuity of care among providers. With these criteria in mind, an individual entry into the medical record must contain sufficient information on the subject of the entry to permit the medical record to satisfy the completeness standard.
CDI in its present format contributes to avoidable denials mainly due to insufficient physician documentation that often misses the mark on the “five C’s” of documentation: clear, concise, consistent, contextually correct, and consensus-driven. Once a CC/MCC is queried about and answered by the physician by dropping a diagnosis in the chart (perhaps not carried forward every day, if clinically relevant throughout the daily progress notes), the CDI staffer often does not consistently follow up in the record. This lends itself to setting up the record for an unnecessary denial for a variety of reasons, but primarily due to the fact the patient story is not well-depicted. It is almost as if CDI is operating in a vacuum, neglecting the opportunity to work collaboratively with the physician as mentors and guides in all things related to documentation. I call your attention to sufficiency of documentation: “support the diagnosis/condition, justify the care, treatment, and services; document the course and results of care, treatment and services; and promote continuity of care among providers.”
Facilitating Achievement of Clinical Documentation Integrity
Hospitals and health systems deserve to be paid optimally for quality care provided, furthering their mission to serve the healthcare needs of their community for the foreseeable future. Generating net patient revenue with reasonable cost to collect while minimizing costly and avoidable denials is paramount to survival with the ongoing COVID-19 pandemic and the associated variants. Reducing payer denials is fundamental to survival. Transforming current CDI processes to those that unequivocally embrace a denials avoidance approach is a step that will best support the achievement of a high-performing revenue cycle.
Present-day processes of CDI have outlived their shelf life. I submit to all CFOs and CDI professionals that change in CDI is inevitable for both financial survival of all hospitals and health systems, as well as the CDI profession at large. The status quo flies in the face of legitimacy and continuation of the profession. The CFO simply checking off that he or she has implemented a CDI program is counterintuitive to achievement of optimal net patient revenue, instead potentially generating more denials. Start this transformative movement by rejecting the notion that current industry-supported KPIs are valid and reliable measures of overall CDI program performance and success. Alleviating unnecessary payer denials is certainly a better standard for performance and success of any CDI program.