Improper DRG payments in 2019 demonstrate the urgency for CDI leadership to address issues.

The 2019 Medicare Fee-for-Service Supplemental Improper Payment Data Report was recently released, showing marked improvement in the Medicare improper payment rate from 2018. This year’s overall improper payment rate came in at 7.3 percent, equating to $28.91 billion paid improperly, compared to last year’s 8.1 percent improper payment rate, at $31.2 billion paid improperly. The calculated improper payments were segregated into five categories, as follows:

  • Incorrect Coding
  • Insufficient Documentation
  • Medical Necessity
  • Other (Duplicative Payments/No Benefit Category/Other Billing Errors)
  • No Documentation (The provider or supplier failed to respond to repeated requests for the medical record.)

Let’s drill down further into the categories of insufficient documentation and medical necessity, both having primary relevance to the clinical documentation integrity (CDI) profession, given the fact that fundamental to each is physician documentation. Insufficient documentation is defined as the following under the Comprehensive Error Rate Testing (CERT) program carried out and fulfilled by a Medicare contractor each year, to calculate the Medicare fee-for-service (FFS) improper payment rate:

  • Insufficient Documentation: This occurs when:
    • Medical documentation submitted is inadequate to support payment.
    • It could not be concluded that the billed services were actually provided, were provided at the level billed, and/or were medically necessary.
    • A specific documentation element that is required as a condition of payment is missing.
  • Medical Necessity: Medical documentation supports that services billed were not medically necessary, based upon coverage and payment policies.

Putting Things into a Proper Perspective
This improper payment rate drives home several key points worthy of noting and examining further, from a clinical documentation integrity perspective, furthering and solidifying my longstanding contention that current CDI processes are ineffective in driving meaningful improvement in actual physician communication of patient care. (More is to come on this discussion later in the article.) I now call your attention to the magnitude of medical necessity and insufficient documentation improper payments identified this time around in the short-term Inpatient Prospective Payment System (IPPS) setting, a continuation of the improper payment findings identified in 2018. The improper payment rate for IPPS Part A services for 2019 was pegged at 3.6 percent, making up 15 percent of the total improper payment rate of 7.3 percent. Quantifying this from a dollars perspective, $4.2 billion in improper payments were attributable to medical necessity concerns, while $1.8 billion improper payments were attributable to insufficient documentation, for a total of $6 billion attributable to physician documentation-related root causes. Why is this particularly important, from a clinical documentation perspective?

CDI: Missing the Mark
Diving into the Appendix tables in the 86-page report, I became more convinced of the potential for what CDI can achieve, if the profession steps up to the table and finally acknowledges that current processes of CDI are in dire need of revamping, as I have been advocating for over the last few years. A major downfall of present-day CDI processes is the unrelenting focus upon reimbursement achieved through the task-based CDI staff query process, perpetuated by key performance indicators that relegate CDI staff to performing menial tasks as an integral part of their daily duties.

CDI professionals are measured on their ability to execute these activities with very little (if any) emphasis upon sharing teachings on how best to communicate patient care through adherence to best-practice standards and principles of physician documentation.

Why is this lack of effort in partnering with physicians to achieve meaningful improvement in physician documentation allowed to fester in the CDI profession? Unfortunately, chief financial officers and other hospital and health system administrators have been led to believe that queries, capture of complications and comorbidities/major complications and comorbidities (CCs/MCCs), and increases in case mix index (CMI), generate additional reimbursement for the facility – yet that’s largely a misconception since CMI is a gross number, not necessarily translating into additional net patient revenue. Witness the increasing volume and dollar amounts of medical necessity and clinical validation denials payers are initiating, creating havoc, administrative burden, and additional costs to collect – all issues with which hospitals must contend.

Proof in the Pudding: Look at the Numbers
A close look at the cited top 20 diagnosis-related groups (DRGs) with improper payments for 2019 unequivocally demonstrates the overwhelming urgency for CDI leadership and hospital administration to look under the hood of their CDI programs and initiate action to redesign them for all the right reasons, focusing more upon the accuracy and completeness of physician communication of patient care, on behalf of the patient and all relevant healthcare stakeholders. The bulk of these top 20 DRGs with improper payments represent common patient admissions and discharges (source: 2019 Medicare Fee-for-Service Supplemental Improper Payment Data Report):

  • Major Hip And Knee Joint Replacement Or Reattachment Of Lower Extremity (469, 470)
    • $693,508,390 Improperly Paid
    • 1 percent Improper Payment Rate
    • Type of Error: 63.3 percent Medical Necessity
  • Psychoses (885)
    • $378,171,886 Improperly Paid
    • 9 percent Improper Payment Rate
    • Type of Error: 80.1 percent Insufficient Documentation
  • Septicemia Or Severe Sepsis WO MV > 96 Hours (871, 872)
    • $275,840,490 Improperly Paid
    • 1 percent Improper Payment Rate
    • Type of Error: 100 percent Incorrect Coding
  • Endovascular Cardiac Valve Replacement (266, 267)
    • $236,231,903 Improperly Paid
    • 3 percent Improper Payment Rate
    • Type of Error: 83.7 percent Insufficient Documentation
  • Esophagitis, Gastroenteritis and Misc. Digest Disorders (391, 392)
    • $88,617,581 Improperly Paid
    • 6 percent Improper Payment Rate
    • Type of Error: 92.6 percent Medical Necessity
  • Cardiac Arrhythmia & Conduction Disorders (308, 309, 310)
    • $85,869,565 Improperly Paid
    • 6 percent Improper Payment Rate
    • Type of Error: 89.7 percent Medical Necessity
  • Kidney & Urinary Tract Infections (689, 690)
    • $72,819,946 Improperly Paid
    • 7 percent Improper Payment Rate
    • Type of Error: 86 percent Medical Necessity
  • Endovascular Cardiac Valve Replacement (266, 267)
    • $236,231,903 Improperly Paid
    • 3 percent Improper Payment Rate
    • Type of Error: 83.7 percent Insufficient Documentation

The Real Question: Are CDI Initiatives Effective?
This year’s FFS improper payment rate of 7.3 percent, the lowest improper payment rate achieved in the Medicare program since the payment rate accuracy has been tracked with the details outlined in the Improper Payment Data Report, should drive the obvious answer to this question. CDI programs are significantly underperforming, as it relates to actual achievement.

A major contributing factor to why CDI programs are failing miserably in affecting improvement in documentation quality and effectiveness is that they were never intended to realize improvement in documentation. Instead, current CDI processes were designed to secure additional reimbursement through diagnosis capture, which is now being refuted by payers at alarming rates, under the guise of “clinical validation.” Hospitals are spending big on software to enhance “productivity” of CDI staff in reviewing records with the most opportunity for “improvement,” meaning more funds from CC/MCC capture. There is even software billed as “computer-assisted physician documentation” that guides physicians on “accurate” diagnoses to capture and report. What is missing from the equation is CDI staffers devoting time and effort in collaborating with physicians and other staff, including case managers, utilization review staff, and ancillary care team members, working in a non-siloed approach, embracing the vision of affecting positive change in physician documentation.

Let’s not forget the patient in the scheme of healthcare delivery and achievement of quality-focused, fully informed coordinated care.  Until this comes to fruition, hospitals will continue to receive an increasing number of costly, self-inflicted medical necessity and clinical validation denials from payers. Payers are winning because providers are creating an environment of clinical documentation that perpetuates continued denials. I submit to CDI leadership that change is inevitable, and the status quo of CDI is not a viable option.

Share This Article