Increasing Federal Regulations

       Impact on Care
    Documentation of Care?

       Emily A. Boohaker, MD
         December 9, 2008

   Review recent Medicare regulations
       Medicare Severity DRG (MS-DRG)
       Present on Admission (POA)
       Hospital Acquired Conditions (HACs)
       Recovery Audit Contractors (RACs)
       Medicare Administrative Contractors (MACs)
   Describe the impact on hospital reimbursement
    and hospital/physician profiling
   Illustrate the role of compliant documentation

       Not a Coder
       Not a Financial Guru

   What works at UAB may not work at other
       Clinical Documentation Specialists
       Query Process


Momentum for Changes

   Institute of Medicine Report
       Healthcare errors
   Medicare Prescription Drug, Improvement
    and Modernization Act of 2003
       Reducing costs/improving pt care
   Deficit Reduction Act of 2005
       Hospital Acquired Conditions
   Value Based Purchasing
       Active purchaser of higher value healthcare services
Diagnostic Related Groups
   Groupings of diagnoses similar clinically and
    in resource utilization
   DRG assigned a Relative Weight (RW)
       Hospital Reimbursement
       Severity of Illness (SOI)
       Resource Utilization
The Blended Rate

   Rate for reimbursement for individual
    hospitals based on
       Region of country
       Teaching vs non-teaching (phasing out)
       Proportion of uncompensated care
       Bed size
   Medicare Blended Rate
       Ranges from $3,000 to $10,000
       UAB blended rate                 $6887
Medicare Hospital Reimbursement
Made Simple
   Physician documents all relevant diagnoses
    and procedures
   Coder selects appropriate DRG
       UTI = DRG 690
   DRG defines RW
       DRG 690 has RW = .7581
   RW drives reimbursement
       RW x blended rate = Payment
       .7581 x $6887 = $5221
Medicare-Severity DRGs
Final CMS Rule 2008

   Based on CMS updated analysis of a severity DRG
    system from the mid-1990s, CMS adopted MS-
       Better recognize severity of illness
       Better demonstrate ability to explain differences in patient cost
   CC: Co-morbid condition or complication
   MCC: Major co-morbid condition or complication
   Often treat but do not document diagnoses
  Medicare-Severity DRGs
  (DRG Example Table)

DRG                         DRG TITLE                          WTS      LOS     $
193   Simple pneumonia & pleurisy w MCC                        1.4327   5     9867

194   Simple pneumonia & pleurisy w CC                         1.0056   4     6926

195   Simple pneumonia & pleurisy w/o CC/MCC                   0.7316   3     5039

853   Infectious & parasitic disease w O.R. proc. w MCC        5.4328   13    37,416

854   Infectious & parasitic disease w O.R. proc. w CC         2.9172   9     20,091

855   Infectious & parasitic disease w O.R. proc. w/o CC/MCC   1.8140   6     12,493
Medicare-Severity DRGs
MCC and CC
                                                        CC Subclass
                               Code                     Assignment
428.21, Acute systolic heart failure               MCC

428.41, Acute systolic & diastolic heart failure   MCC

428.43, Acute on chronic systolic heart failure    MCC

428.31, Acute diastolic heart failure              MCC

428.33, Acute on chronic diastolic heart failure   MCC

428.1, Left heart failure                          CC

428.20, Systolic heart failure NOS                 CC

428.22, Chronic systolic heart failure             CC

428.32, Chronic diastolic heart failure            CC

428.40, Systolic & diastolic heart failure         CC

428.0, Congestive heart failure NOS                Non-CC

428.9, Heart failure NOS                           Non-CC
From the Federal Register

 “We highly encourage physicians and hospitals
 to work together to use the most specific codes
 that describe their patient’s conditions. Such
 an effort will not only result in more accurate
 payment by Medicare but will provide better
 information on the incidence of this disease in
 the Medicare patient population.”
From the Federal Register

 “We do not believe there is anything
 inappropriate, unethical or otherwise wrong
 with hospitals taking full advantage of coding
 opportunities to maximize Medicare payment
 that is supported by documentation in the
 medical record. We encourage hospitals to
 engage in complete and accurate coding.”
Example 1

   68 yo with h/o DM, COPD presents with altered
    mental status. Family states over the past several
    days he has become more “sleepy” and is having
   PE: Ill appearing, diaphoretic. T = 102, BP
    127/80, HR = 102, RR = 24, tachycardic, supra-
    pubic tenderness
   Labs: WBC = 13k, 90% segs, CBS = 200, UA
Example 1
   Admitting Diagnoses
       UTI
       Urosepsis
       Altered Mental Status
       Diabetes Mellitus
   Hospital Course
       IV antibiotics started
       Urine Culture: E. Coli; Blood cultures: negative
       Mental status returned to baseline
       Discharged home after 5 days
Example 1
   What is the principal diagnosis warranting this
   Is there another diagnosis that more accurately
    describes the severity of illness and the
    additional resources used to manage this
   Sepsis from a urinary source
   SIRS: 2 or more of the following
     T > 100.4 or < 96.8

     HR > 90
     RR > 20 or PaCO2 < 32

     WBC > 12k or < 4k or > 10% bands

   Sepsis: SIRS due to suspected or confirmed infection (do not need
    positive blood cultures)
   Severe sepsis: Sepsis associated with organ dysfunction,
    hypoperfusion or hypotension
   Septic shock: Sepsis induced hypotension despite adequate fluid
    resuscitation along with presence of perfusion abnormalities

            American Journal of Medicine (2007) 120, 1012-1022
Example 1
                        RW Payment LOS

 690   Kidney and UTI   .7581   $5221   3.5

 872   Septicemia       1.1209 $7720    4.7
Example 2

   30 yo s/p renal transplant, h/o leukopenia with
    disseminated Zoster, presents with fever and sore
    on tongue.
   PE: No acute distress, T = 100.8, BP = 135/82,
    HR = 120, tongue with pustular lesion
   Labs: WBC = 1, Hct = 41, BUN/Cr = 28/2.7
    (baseline = 10/1.2), CXR neg, culture neg
Example 2
   Admitting Diagnoses:
       Neutropenic fever
       Renal insufficiency
   Hospital Course:
       Treated with acyclovir
       Aggressive IVFs
       Frequent monitoring of renal function
       Creatinine returned to baseline
       Discharged home after 6 days
Example 2
   Is there a more accurate diagnosis to better
    describe what is going on with his renal

   Acute Renal Failure
Example 2
                                  RW Payment LOS

 809   Neutropenic fever          1.1744   $8088     4.2

 808   Neutropenic fever w/ MCC   1.9886   $13,695   6.3
Severity Matters

   Public reporting of mortality/morbidity
   Contract negotiations for the organization
       Ex: treating UTIs when truly septic
   Pay for performance for physicians
Present on Admission
POA Indicators

   Initiated in January 08 for Medicare and
    October 08 for BCBS
   Identify potentially preventable hospital-
    acquired conditions vs conditions already
    present on admission
   All diagnosis codes must have an indicator
General POA Reporting Requirements
   Indicator is required for all claims involving Medicare and
    BCBS inpatient admissions to general acute care hospitals
   Defined as present at the time the order for inpatient
    admission occurs
   Includes conditions that develop during an outpatient
    encounter in:
            Emergency department
            Observation
            Outpatient Surgery

   Issues related to inconsistent, missing, conflicting, or
    unclear documentation must be resolved by the provider
CMS POA Indicator Reporting
Options and Definitions
   Y      Diagnosis was present at time of inpatient admission

   N      Diagnosis was not present at time of inpatient admission

   U      Documentation insufficient to determine if condition was
   W      Clinically undetermined by provider

   1      Unreported/not used. Exempt from POA reporting
   78 yo with CHF presents from Spain Rehab
    with acute dyspnea/hypoxemia.
       MET activated
       Afebrile, BP 90/50, RR 20, HR 70
       O2 sat = 80%
       Using accessory muscles, chest crackles, lower
        extremity edema
Example (continued)
   Admitting Diagnoses
       CHF
       PTE
       HAP
   On day 3 attending documents hypoxemic
    respiratory failure
   Coder after discharge assigns respiratory
    failure with an “N” indicator
Example (continued)

   Was respiratory failure present on admission?

   YES –clarify as late entry in chart
Hospital-Acquired Conditions
HACs: Scope of the Problem

   IOM Report
       To Err Is Human: Building a Safer Health System
           HACs are leading cause of M&M in US
           98,000 Americans die annually due to medical errors
           National costs of these errors estimated at $17-$29 billion
   CDC Report
           Estimated that HACs add nearly $5 billion to US health care
            costs annually

              IOM: To Err is Human: Building a Safer Health System, November 1999 (http://www.
              Centers for Disease Control and Prevention: Press Release, March 2000 (

   Section 5001(c) of the DRA required the Secretary
    to identify those conditions that
     Are high cost or high volume or both,

     Result in the assignment of a case to a DRG that

      has a higher payment when present as a secondary
     Could reasonably have been prevented through the
      application of evidence-based guidelines

   Conditions not payable after 10/01/08
       Air embolism
       Blood incompatibility
       Object left in during surgery
       Catheter-associated UTIs
       Vascular catheter-associated infections
       Pressure ulcers (stage 3 and 4)
       Mediastinitis after CABG
       Hospital-acquired injuries: fractures, dislocations,
        burns, crushing or intracranial injuries
Additional HACs

   Surgical site infections following certain
    elective procedures including certain
    orthopedic surgeries, and bariatric surgery for
   Certain manifestations of poor blood glucose
   DVT or PE following total knee and hip
    replacement procedures

   Conditions not payable after 01/01/09
       All Medicare HACs PLUS
       11 more from the National Quality Forum
           Surgical events
           Product or device events
           Care Management events
           Environmental events
Documentation of HACs

   HACs that are usually well documented

       Blood incompatibility
       Air embolism
       Object left in during surgery
       Mediastinitis after CABG
       Hospital-acquired injuries
       DVTs or PEs after certain orthopedic surgeries
Documentation of HACs

   HACs that may require additional
    documentation by provider

       Catheter-associated urinary tract infections
       Vascular catheter-associated infections
       Pressure ulcers (site and stage)
       Surgical site infections after gastric bypass
Medicare HAC Payment
   If this is the only complication or co-morbid
    condition driving the MS-DRG to a higher level
       For compliant coding must include the condition on the bill
       Medicare will reimburse at the lower MS-DRG

   If this is not the only complication or co-morbid
    condition driving the MS-DRG to a higher level
       For compliant coding must include the condition on the bill
       Medicare will reimburse at the higher MS-DRG
HAC: Example 1
Patient presents with an MI. Foley catheter
inserted on admission. Patient later develops
a UTI.
 MS-DRG 281 Acute MI, discharged alive with
  a CC; only CC is UTI
    RW = 1.2213 ($8411)
    Query for catheter-related UTI
        Lose CC
        RW = 0.8696 ($5989)
HAC: Example 2

   83 yo transferred from OSH for LLE
    ulcer/cellulitis, CHF, DVT, etc
       After 5 days pt acutely decompensates/febrile/sob
       Possible HAP, cellulitis, possible sepsis from line
        infection-will change
       Cath tip showed 40 CFU Candida parapsilosis
       Blood cultures negative
   Did this pt have a hospital acquired vascular
    cath associated infection?
HAC: Example 2

   Attending queried
       Late entry in to chart “patient had negative blood
        cultures from that day, so he did not meet the CDC
        definition of line associated bacteremia or fungemia.”
BCBS HAC Payment

How do you get paid if the condition is HAC?

   For compliant coding must include the condition
    on the bill

   Was it preventable?
Recovery Audit Contractors
RAC Background

   Medicare Modernization Act of 2003
     CMS to use RACs to identify and recoup over and

      under payments

   Tax Relief and Health Care Act of 2006
     RAC Program permanent

     Expansion to all 50 states no later than 2010
Overpayments Collected by
Provider Type
           Skilled          Inpt Rehab        OP Hospital,
           Nursing         Facility, $59.7      $44.0 Physician,
        Facility, $16.3                                    $19.9
                                                       /Lab / Other,

                                                      DME, $6.3

                                             IP Hospital,

$ in millions
Source: Self-reported by the Claim RACS
Overpayments Collected by Error
Type                                                  Medically
Incorrectly Coded,                                     $391.3

           No / Insufficient
                                          Other, $150.2
$ in millions
Source: Self-reported by the Claim RACS
Claim Review Process

   Automated Reviews
       Look for “low hanging fruit”
          Use data mining techniques
          Mainly outpatient hospital claims
               Multiple units billed
               Missing modifiers that would impact payments
               Payment for discontinued HCPCS/CPT codes
Claim Review Process
   Medical Record Audits
          Hospitals have 45 days to comply
             Missing  records automatic denials
             Request 100 records/45 days for UAB

             RAC has 60 days to review chart and issue either a
              denial or an “all clear” letter to the provider
 Providers must follow Medicare appeal rules to
    dispute a RAC adjustment
Issues Identified
   Information on claim did not match the medical
       Excisional debridement
       Respiratory failure

   Claims with single secondary diagnosis
    designated as a complication or co-morbidity

   Discharge status/transfers – claim indicates
    discharge to home or other facility but medical
    record indicates beneficiary was discharged to
    another hospital or home with home care
Issues Identified
   Medical necessity
       Inpatient rehab
       Short stay admissions, including chest pain, back
        pain, congestive heart failure, and gastroenteritis
       Admission for scheduled elective procedures

   Wrong number of units billed
       Neulasta
       Speech therapy
       Transfusions
Medical Necessity
(according to Medicare)

   CMS determines whether the item or service is
    “reasonable and necessary for the diagnosis or
    treatment of illness or injury or to improve the
    functioning of a malformed body member.”
   Two questions
       Is the therapy/treatment/device/procedure
       Is the setting in which it is deployed
Medicare Administrative
   Required by section 911 of the Medicare Prescription
    Drug, Improvement and Modernization Act of 2003
    (MMA of 2003)
   CMS is replacing its current claims payment
    contractors - fiscal intermediaries and carriers - with
    new contract entities called Medicare Administrative
    Contractors (MACs)
   For the first time, MACs will enable the government to
    match, link and compare both Part A and Part B
    claims submitted for a specific episode of care.

   Improved Beneficiary Services
       Claims processed by one contractor
       Integrated approach to medical coverage
       Single point of contact
   Improved Provider Services
       Single interface for Parts A/B
       More accurate claims payments
       Greater consistency in payment decisions

   The word game is here to stay

   Engage each other in the game

   Documentation must reflect excellent care

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