Insights into Denials, Appeals, and CDI Practices

 
Denials and Appeals and
CDI
 
 
 
Compiled by
Coral F. Fernandez, RN CCDS CCS
August, 2017 – September 2018
 
1
 
INTRODUCTION
 
Coral F. Fernandez, RN CCDS CCS
 
27 years with Baptist
2 years as a file clerk in HIM (prior to EMR)
25 as an RN
18 years in CDI
2 years as System CDI Auditor/Educator
Lifelong learner
Compulsive reader
Insatiably curious
English language enthusiast
 
2
 
Life cycle of a claim
 
 
1.
Services rendered – patient diagnosed and
treated
 
2.
Charges entered
 
3.
Coding
 
3
 
Life cycle of a claim
 
 
4.  
Adjudication for expected reimbursement – the
billing system calculates what the payment should be,
Medicare expected reimbursement based on APC and
MS-DRG, other payers expected reimbursement is
based on the modeling of each contract – for
example, if the insurer pays lab visits at 80% of
charges, the billing system will take that into account
in determining expected reimbursement
 
4
 
Life cycle of a claim
 
 
5.
Editing and correction of claim – “claims
scrubbing” – fixes duplicate/illogical/invalid
coding, modifier requirements, coverage
determinations, missing codes
 
6.
Billing – claim is submitted to the payer and
accepted and paid, accepted and denied, or
partially paid/denied
 
7.   Collections and appeals
 
5
 
Denials …
 
 
A denial is any claim paid less than
expected.
According to The Advisory Board, denials
cost health care organizations about 3% of
their net revenue stream (2013).
Roughly 67% of all denials are appealable.
It is estimated that around 90% of all denials
are preventable.
 
6
 
Losses from denials
 
 
Healthcare organizations' annual losses from
denial write-offs range from as little as 1% of
net patient revenue to as high as 5%.
 
For an average 300-bed organization, 1
percent of net patient revenue can equate to
$2 million to $3 million annually. - 
McKesson
 
7
 
Some reasons for denial of claim
 
Technical – double billed, visits should have been
combined, etc.
Medical necessity, prior authorization, late
notification, length of stay, referrals, utilization
review
Experimental and/or investigational treatments,
new technologies
Services not covered (payer contract defined or
not?), bundling
Services billed as inpatient that should have been
billed as outpatient and vice versa
 
8
 
Some reasons for denial of claim
 
Waited too long to file the claim
Proper codes are missing (incomplete, invalid, don’t correspond to the
treatment rendered)
Insurance company lost the claim and then the claim expired
Preauthorization
Patient did not acquire referral from a physician
Two services provided in one day
Ran out of authorized sessions
Authorization time ran out
Patient changed insurance plan
Patient lost coverage (late in paying COBRA, for example)
Claim sent to incorrect managing company
Services rendered at the wrong location
Provider isn’t enrolled with the insurance company
Patient has an out-of-state insurance plan
 
9
 
Some reasons for denial of claim
 
 
Coding 
– incorrect code assignment, errors in
sequencing, coding separately things that
should have been combined into one code,
invalid diagnosis or procedure codes
 
Clinical
 – validity of diagnosis (-es), “clinical
criteria” of provider different than “clinical
criteria” of insurer
 
10
 
Medicare Denials Process
 
From CMS.gov
 
Appeals Levels
 
1.
Redetermination by a
Medicare contractor (MAC)
2.
Reconsideration by a Qualified
Independent Contractor (QIC)
3.
Hearing by an Administrative
Law Judge (ALJ)
4.
Review by the Medicare
Appeals Council
5.
Judicial Review in Federal
District Court
 
11
 
Statistics …
 
March, 2017 from Becker’s Hospital
Review denial rates for hospitals with
250-400 beds
 
•Northern Plains ­— 10.58 percent
•South Central — 8.88 percent
•Midwest — 7.89 percent
•Southern Plains — 7.72 percent
•Pacific — 7.58 percent
•Northeast — 7.21 percent
•Mountain — 7.18 percent
•Southeast — 7.14 percent
 
12
 
Inpatient Coding
Denials and Appeals
 
13
 
DRG Validation
Coding vs. Clinical
 
ICD-10-CM Official Coding Guidelines for Coding and Reporting, effective
October 1, 2016, Section I. Conventions for the ICD-10-CM
 
19. Code assignment and Clinical Criteria
 
The assignment of a diagnosis code is based on 
 
the
provider’s diagnostic statement that the condition
exists. The provider’s statement that the patient has a
particular condition is sufficient. Code assignment is
not based on clinical criteria used by the provider to
establish the diagnosis.
 
14
 
Code Assignment & Clinical Criteria
 
Guideline 19 Explanation by Nelly-Leon Chisen at an
AHIMA Clinical Coding Meeting
 
This guideline was created to separate coding and clinical
validation so RAC denials related to clinical validation would
not be labeled as coding errors
 
Clinical validation is a separate function, but it’s a hospital’s
decision on how to handle this from a coding perspective
 
Payers do have specific clinical guidelines which have to be
followed
 
15
 
Remember …
 
 
The inpatient coder has NO
CHOICE but to code what is
documented in the record as
a diagnosis by the provider.
 
16
 
DRG Validation vs. Clinical Validation
 
The distinction is described in the Centers for Medicare &
Medicaid (CMS) definition of clinical validation from the Recovery
Audit Contractors Scope of Work document and cited in the
AHIMA Practice Brief ("Clinical Validation: The Next Level of CDI")
published in the August issue of JAHIMA: "Clinical validation is
an additional process that may be performed along with DRG
validation. Clinical validation involves a clinical review of the
case to see whether or not the patient truly possesses the
conditions that were documented in the medical record.  
Clinical
validation is performed by a clinician (RN, CMD, or therapist).
Clinical validation is beyond the scope of DRG (coding)
validation, and the skills of a certified coder. This type of review
can only be performed by a clinician or may be performed by a
clinician with approved coding credentials
."
 
17
 
CDI and Coding
 
 
If clinical indicators are supportive of a particular
diagnosis but not strongly supportive, a CDI query
may help avoid a denial for claim after billing.
 
Unless there is an after discharge review process in
place, the only way the CDS is going to be notified
that a CDI query may help avoid a denial for claim is if
the inpatient coders communicate this.
 
TEAMWORK
 
18
 
The Bigger Picture
 
What attracts the attention of payers at the end of
a patient’s stay?
 
Short stay, long stay
Specific principal diagnoses
Specific DRGs
Claims with only one CC or MCC are denied more
often than claims with multiple CCs and/or MCCs
 
19
 
CDI in the bigger picture
What’s wrong with the “one and done” CDI
program?
 
If YOU were an auditor for an
insurance company and it was
your job to look for ways to save
the company money by looking
for claims to deny (for whatever
reason), wouldn’t you look for
claims with only 
ONE
 CC or MCC
to minimize the amount of work
you had to do to decrease the
amount paid out to the provider?
As an auditor, you’d only have to
deny 
ONE
 diagnosis successfully
to change the reimbursement for
that claim
.
 
20
 
CDI in the bigger picture
What’s wrong with the “one and done” CDI
program?
 
Claims with only one
CC or MCC are denied
more often than
claims with multiple
CCs and/or MCCs.
CDI queries that add
additional CCs and/or
MCCs to a patient’s
problem list are
INVALUABLE
.
 
21
 
Journal of AHIMA
Clinical Validation:  The Next Level of CDI
July 2016
 
(There is also an article from Journal of AHIMA entitled, “
Taking Coding
to the Next Level through Clinical Validation
”)
 
 
From 2013 Practice Brief, “Guidelines for Achieving a Compliant
Query Practice”:  A query is appropriate when the health record
documentation “provides a diagnosis without underlying clinical
validation.  
When a practitioner documents a diagnosis that does
not appear to be supported by the clinical indicators in the
health record, it is currently advised that a query be generated to
address the conflict or that the conflict be addressed through
the facility’s escalation process
.”
 
22
 
Journal of AHIMA
Clinical Validation:  The Next Level of CDI
July 2016
 
(There is also an article from Journal of AHIMA entitled, “
Taking Coding
to the Next Level through Clinical Validation
”)
 
 
“It is also important to note that clinical validation is a somewhat
subjective concept as practitioners often disagree how to define
conditions ….”
 
CMS 2013 Recovery Audit Contractor Scope of Work:  “
Clinical
validation involves a clinical review of the case to see whether or
not the patient truly possesses the conditions that were
documented in the medical record.  Clinical validation is
performed by a clinician.
 
23
 
Journal of AHIMA
Clinical Validation:  The Next Level of CDI
July 2016
 
 
“Determining the clinical validity of a reported condition is
subjective, which is why denials are plentiful.”  “CMS only states,
“As with all codes, clinical evidence should be present in the
medical record to support code assignment.”
Organizations are also well served to develop internal
guidelines defining those diagnoses most vulnerable to denials.
The goal of these guidelines is to promote consistency among
CDI and coding professionals in identifying diagnoses that
appear to lack sufficient clinical evidence.”
 
24
 
“Organizations are also well served to develop internal guidelines
defining those diagnoses most vulnerable to denials...”
 
25
 
Clinical Denials and Appeals
 
26
 
Empirical Treatment
 
 
EMPIRICAL TREATMENT:
 
- medical treatment that is given
on the basis of the doctor's
observations and experience
 
27
 
Don’t be afraid to point out
the seemingly obvious …
 
“This letter is in response to the audit findings forwarded to us by your
office.  We disagree with the recommendation to delete code J96.01,
(Acute respiratory failure with hypoxia) as a secondary diagnosis.
 
Per ER record, patient with history of COPD with complaints of
worsening shortness of air at rest, 
“supposed to be on O2 but has been
unable to afford it after insurance stopped covering it.”
 
In determining his need for continued oxygen supplementation at
discharge, Mr. Smith’s oxygen saturations were measured on room air
at rest.  This resulted in oxygen saturations measured 85% - 88%.”
 
Patient was discharged with home oxygen.
 
28
 
DRG Validation vs. Clinical Validation
 
AUDITOR/EDUCATOR FOR BAPTIST HEALTH SYSTEM:  The notification from The
Insurer is labeled, “DRG Validation Worksheet.”  Is this denial based on coding
guidelines or is it based on a clinical validation audit?  If this is a clinical
validation audit, The Insurer would be better served by a representative who is
clinically educated and trained.  This auditor, on behalf of Baptist Health System,
reads the qualifications of the representative for The Insurer as RHIA, CCS.  The
RHIA is a professional certification administered by the American Health
Information Management Association (AHIMA) and passing the exam results in
licensure for health information management.  Eligibility for the RHIA includes
successful completion of at least a baccalaureate level degree in an accredited
Health Information Management program and a passing score on the exam,
offered by AHIMA.  The CCS (Certified Coding Specialist) is also a certification
offered by AHIMA.  This level of higher education and certification is admirable,
however RHIA and CCS are not clinically based.
 
Baptist Health System respectfully requests that, if this denial is indeed based on
a clinical validation audit, The Insurer have this claim and the medical records
submitted reviewed by a clinician.
 
29
 
Don’t be afraid to point out the
seemingly obvious …
 
INSURER:  “After the left heart cath, the cardiologist
documented that this patient has a Type II NSTEMI in
the setting of V.T.  This patient was diagnosed as
having a NSTEMI, taken for cardiac cath, had an
attempt at PTCA and medication adjustment per the
Cardiology team.  It was noted that the physician
documented non ST elevation myocardial infarction in
the provided medical record.  
The hospital has coded
a subendocardial infarction or NSTEMI on this claim
based on an elevation of troponin above the range of
normal
.”
 
30
 
Don’t be afraid to point out the
seemingly obvious …
 
BAPTIST AUDITOR/EDUCATOR:  The insurer’s
letter dated 04/25/2018 includes, “The
hospital has coded a subendocardial
infarction or NSTEMI on this claim based on
an elevation of troponin above the range of
normal.”  
Baptist Health Lexington has coded
an NSTEMI based on physician interpretation
of this individual’s clinical picture and
physician documentation thereof
.”
 
31
 
Don’t be afraid to point out the
seemingly obvious …
 
INSURER:  “To confirm the diagnosis of NSTEMI the
medical record is examined for new ischemic changes
on serial EKGs, a rising pattern of troponin levels, an
appropriate clinical picture, and confirmation of the
diagnosis by a cardiologist.”
 
BAPTIST AUDITOR/EDUCATOR:  “Confirmation of the
diagnosis of NSTEMI by a cardiologist is not required,
however, in this case, NSTEMI was documented by
three
 cardiologists and a hospitalist.”
 
32
 
Don’t be afraid to point out the
seemingly obvious …
 
INSURER:  “On review of the medical record there was no history of
dementia and the physician did not document any dementia.”
 
BAPTIST AUDITOR/EDUCATOR:  “In fact, Dr. John Q. Public, MD
documented this very thing in his progress note dated 05/04/2017.
Please see the screen clipping below.  A copy of this progress note will
be sent with this letter.”
 
33
 
Don’t be afraid to point out the
seemingly obvious …
 
 
INSURER:  “One would expect to find consistent documentation
of the diagnosis throughout the record.”
 
BAPTIST AUDITOR/EDUCATOR:  “The present on admission
indicator listed for DIAGNOSIS on PATIENT’s claim is 
NO
.  One
would not expect to see evidence supporting this diagnosis on
admission or documentation “throughout the record” that the
diagnosis is assumed or likely, because the present on
admission indicator for that particular diagnosis was reported as
NO
.  DIAGNOSIS was not present on admission.”
 
34
 
Don’t be afraid to point out the
seemingly obvious …
 
 
BAPTIST AUDITOR/EDUCATOR:  “As
always, Baptist Health System
appreciates The Insurer’s careful review
of medical record documentation and
respectful attention to correspondence
pertaining to the appeals process.”
 
35
 
Sepsis 1, Sepsis 2, and Sepsis 3
 
 
1.
Bone, R.C., Balk, R.A., Cerra, F.B. et al. Definitions for sepsis and
organ failure and guidelines for the use of innovative therapies in
sepsis. The ACCP/SCCM Consensus Conference Committee.
American College of Chest Physicians/Society of Critical Care
Medicine. Chest. 
1992
; 101: 1644–1655
 
2.
Levy, M, et al. 
2001
 SCCM/ESICM/ACCP/ATS/SIS International
Sepsis Definitions Conference.  Int Care Med (2003) 29:530-538.
 
3.
Singer, M, et al.  The Third International Consensus Definitions for
Sepsis and Septic Shock.  JAMA.  
2016
; 315(8):801-810.
 
36
 
Recent Denial Arguments
 
 
BHS has received dozens of denials based on patients not “meeting
sepsis criteria” as outlined by the Sepsis 3 criteria.
 
Sepsis 3 criteria were SUGGESTED as criteria which SHOULD replace
clinical criteria outlined in “Sepsis 2” in an article published by JAMA in
February 2016.  BHS has received some denials for sepsis based on
patients not “meeting Sepsis 3 criteria” on patients whose
hospitalizations occurred prior to February 2016.
 
BHS has received denials which included statements to the effect that
the American Medical Association has now defined sepsis as 
“organ
dysfunction caused by a dysregulated response to infection.”
 
BUT …
 
37
 
Quotes from the Sepsis 3 article, published by JAMA
February, 2016
 
“The task force recognized that no current clinical measures
reflect the concept of a dysregulated host response.”
 
Interestingly, in 2016, ACP Hospitalist interviewed Dr. Clifford S.
Deutschman, MS, MD, 
co-chair of Sepsis-3 
and a professor of
pediatrics and molecular medicine at Hofstra-Northwell School of
Medicine in Hempstead, N.Y.  In this interview, Dr. Deutschman
said, “If you want to absolutely 100% without fail identify a
patient who has sepsis, you can't....  ‘Sepsis is life-threatening
organ dysfunction caused by a dysregulated host response to
infection.’  Relatively straightforward and clinically pretty much
useless” and, 
“nothing we're saying supersedes the judgment of
a good clinician.”
 
38
 
Recent Denial Arguments
 
 
Even when the appeal author, writing on
behalf of BHS, argues that the patient “met
sepsis criteria” for “organ dysfunction caused
by a dysregulated response to infection” as
evidenced by a SOFA score of 2 or greater, the
insurers often send another denial letter
(second level) negating the clinical application
of the SOFA score.
 
 
39
 
Recent Denial Arguments
 
 
INSURER:  “Though the facility reviewer noted
a PF Ratio of <400 in the appeal letter, this
reviewer is unable to find supporting
physician documentation of a PF Ratio in the
medical record as provided.  Therefore, 
we
are unable to determine if the physician used
PF Ratio criteria in the diagnosis of sepsis
.”
 
40
 
Recent Denial Arguments
 
BAPTIST AUDITOR/EDUCATOR:  “To assert that a
physician must not only take PF ratio into account in
diagnosing sepsis but must also document that
consideration is 
ridiculous
.  This auditor has been
unable to find professional guidelines dictating to the
physician that he or she document every aspect of
medical decision making in arriving at a diagnosis
and treatment plan.  
The clinical 
gestalt
 required of a
physician in arriving at a diagnosis cannot be
reduced, especially by a non-physician, to
determining which aspects of a patient’s clinical
picture are relevant
.”
 
41
 
DEFINITIONS
 
GESTALT:
 
An organized whole that is perceived as more
than the sum of its parts
 
This auditor has been unable to find professional guidelines dictating to
the physician that he or she document every aspect of medical decision
making in arriving at a diagnosis and treatment plan.  The clinical
gestalt
 required of a physician in arriving at a diagnosis cannot be
reduced, especially by a non-physician, to determining which aspects of
a patient’s clinical picture are relevant.
 
42
 
DEFINITIONS
 
GESTALT:
 
“… is a sensory interpretation that is greater than the
sum of its parts, gestalt identification is the process
by which healthcare practitioners organize clinical
perceptions into specific diagnostic ideas.”
 
“Gestalt is clearly not intuition.  It is the meticulous
acquisition of complex cognitive skills.”
 
43
 
DEFINITIONS
 
GESTALT:
 
“ … the ability to recognize patterns of disease …”
 
“perceptual grouping”
 
“Amidst the explosion of technological advancement
in medicine, the ability of the physician’s mind cannot
be replicated.”
 
44
 
Recent Denial Arguments
 
INSURER:  “The appeal letter references a P/F ratio of 348;
however, the physician does not document the P/F ratio nor its
significance.”
 
BAPTIST AUDITOR/EDUCATOR:  “This auditor, writing on behalf
of Baptist Health System, finds no opinion whatsoever in the
referenced article 
Singer, M, et al.  The Third International
Consensus Definitions for Sepsis and Septic Shock.  JAMA.
2016; 315(8):801-810.
 regarding the recommendation of or
necessity for physician documented interpretation of clinical
indicators of organ failure (as outlined in the Sequential Organ
Failure Assessment Score table) when that physician has
diagnosed sepsis.”
 
45
 
Every denial letter must be
carefully reviewed …
 
 
The INSURER included
infectious source, a
NORMAL WBC count,
and NORMAL
respiratory rate of 20
in his/her findings.
 
 
Mr. Jones reported fever
to 103.9 prior to coming
to the hospital with rigors
and chills.  His vital signs
on presentation included
oral temp 101.1, pulse
112, respirations 24,
blood pressure 109/43.
 
46
 
Every denial letter must be
carefully reviewed …
 
 
The INSURER included
a NORMAL WBC count
from the day of
admission but did not
address other
pertinent labs.
 
 
Mr. Jones had WBCs
11.18 on admission
which increased to 13.12
the following day,
neutrophils 88.9%, lactate
1.4, and CRP 10.44 on
admission which
increased to 22.76 the
following day.
 
47
 
Every denial letter must be
carefully reviewed …
 
 
The INSURER
wrote that sepsis
was documented
in the discharge
summary.
 
 
Actually, sepsis was
documented clearly
and consistently in
the ED, History and
Physical, progress
notes, AND discharge
summary.
 
48
 
Every denial letter must be
carefully reviewed …
 
 
The INSURER
wrote that
criteria were not
met for acute
respiratory
failure.
 
 
Actually, the patient
met 
both
 the
insurer’s criteria for
acute respiratory
failure as well as
Baptist Health System
criteria for acute
respiratory failure.
 
49
 
Recent Denial Arguments
 
 
INSURER:  “In the discharge summary, the
physician stated, “Principal problem:  Diabetic
ketoacidosis without coma associated with
diabetes mellitus due to underlying
condition.”  The physician stated in the
discharge summary that the presenting
problem was diabetic ketoacidosis.”
 
50
 
Recent Denial Arguments
 
BAPTIST AUDITOR/EDUCATOR:  “This auditor,
writing on behalf of Baptist Health System, is
both a registered nurse and a Certified
Coding Specialist.  “Principal diagnosis” is
defined for coding and reporting purposes as
above.  What a physician lists as “principal
problem” in an electronic medical record is
most definitely not the same thing as
“principal diagnosis” as defined by UHDDS.
This is a 
spurious
 argument.”
 
51
 
DEFINITIONS
 
SPURIOUS:
 
Not being what it purports to be, false,
fake, deceptive, misleading, not valid,
based on something that has not been
correctly understood and therefore
false, not based on facts or good
thinking and likely incorrect
 
 
 
52
 
Inclusion of CDI queries in
appeal letters
 
 
“In an effort to give the attending physician an
opportunity to clarify the diagnosis of sepsis as being
clinically valid or ruled out, the Clinical
Documentation Specialist concurrently queried the
attending physician, and was fully compliant with
Coding Guidelines, the AHIMA Practice Briefs, and the
ACDIS Code of Ethics.  In responding to the
concurrent query, the physician again documented
that sepsis was present on admission and included
sepsis in the discharge summary.”
 
53
 
Email blast sent to physicians
 
SEPSIS
 
YOU think your patient has sepsis.  But does your patient “meet criteria” for SEPSIS?
 
Arguments can be made for and against the various criteria for sepsis.  Each set of criteria seems to have its
proponents and detractors.  The lack of a consensus among medical professionals and professional
organizations on a definition of sepsis is problematic.
 
Since the advent of Sepsis 3 in 2016 and the associated SOFA criteria for organ failure(s), BHS has received
many denials for claim from insurers based on Sepsis 3 criteria.  Although clinical 
gestalt 
should prevail,
few of these denials have been overturned.  Even when a patient “meets Sepsis 3 criteria” for organ failure(s)
based on SOFA scoring, insurers are sometimes denying claims because the organ failures are not
specifically linked to sepsis.
 
Rather than restricting independent clinical interpretation by instituting the use of any particular set of
criteria for the diagnosis of sepsis, BHS asks that physicians please document to link organ failures to sepsis
if they interpret those failures to be related to sepsis in a septic patient.
 
In linking two conditions, documentation such as “due to” or “related to” or “secondary to” will be difficult
for an auditor to negate.
 
54
 
CDI in the bigger picture
 
55
 
“We can capture, charge, code,
and bill, but the ability to be
reimbursed properly is driven
by documentation.
Integration with the clinical
side is critical.”
 
 
 
- Todd Craghead, Vice President of the Revenue Cycle
Organization, Intermountain Healthcare
 
56
 
CDI in the bigger picture
 
Very few clinical denials are sent to BHS on
claims for which there was a concurrent CDI
query answered – 
the CDI query carries a lot
of “weight” in this process
 
If concurrent clinical indicators are
supportive of a particular diagnosis but not
strongly supportive, a CDI query may help
avoid a denial for claim after billing
 
57
 
CDI in the bigger picture
 
Anecdotally, Coral Fernandez has written
appeal letters on 113 different patients, some
first level appeals, some second level appeals,
some both.
 
Out of those 113 denials, only 14 had CDI
queries which pertained to the diagnosis (-es)
the insurer denied.
 
58
 
CDI in the bigger picture
 
Of those 14 patients with queries pertinent to
the diagnosis (-es) being denied by the
insurer, there were queries for:
 
Clinical validation
Queries to bring the diagnosis back into the documentation
Etiology of a diagnosis
Attestation to Malnutrition Severity Assessment results
Type of acute on chronic CHF
Present on admission or not
 
59
 
CDI in the bigger picture
 
Coral Fernandez has written appeal letters on 113 different patients
 
Out of those 113 denials, only 14 
(12%) 
had CDI queries which
pertained to the diagnosis (-es) the insurer denied.
 
How to interpret these statistics?
 
CDSs need to write more queries?
CDS queries are not precise?
CDS and/or inpatient coders are “missing things”?
 
NOT NECESSARILY …
 
60
 
CDI in the bigger picture
 
These statistics are based only on a quick
adding up of denials filed in Coral’s
“document library” and were NOT computed
scientifically.
These statistics could mean that insurers
are NOT sending denials on charts that
include a CDI query with a physician
response that supports a particular
diagnosis that the insurer might otherwise
deny
 
61
 
CDI in the bigger picture
 
These statistics could mean that CDI sends queries
more often on diagnoses not chosen as frequently
as targets by the insurers.
There have been several cases in which the CDI
query was not copied and sent to the insurer when
the insurer requested copies of records from HIM.
Sometimes just sending an appeal letter with a
copy of the CDI query is enough for the insurer to
reverse their denial.
 
BUT…
 
62
 
CDI in the bigger picture
 
 
It’s a 
wonderful
 feeling to be able to include
a CDI query and physician’s response in the
body of an appeal letter!!
 
 
YEA, TEAM!!!
 
63
 
Questions?
 
 
 
 
 
 
 
 
Thank you!
 
 
64
 
References
 
http://campus.ahima.org/audio/2009/RB041609.pdf
 
https://www.humanarc.com/wp-content/uploads/2013/06/HOSPITAL-DENIALS-WHITE-
PAPER-by-Holly-Pelaia-2013-05.pdf
 
http://www.healthcarefinancenews.com/sponsored-insights/getting-front-problem-how-can-
hospitals-empower-denial-prevention-and-management
 
http://www.hrgpros.com/denials-management/
 
http://www.beckershospitalreview.com/finance/4-ways-healthcare-organizations-can-reduce-
claim-denials.html
 
http://www.mckesson.com/bps/blog/medical-billing-denials-are-avoidable/
 
ICD-10-CM Official Coding Guidelines for Coding and Reporting, effective October 1, 2016,
Section I. Conventions for the ICD-10-CM
 
 
 
 
 
 
 
65
 
References
 
AHA ICD-10-CM/PCS Coding Clinic, Fourth Quarter 2016, pages 147 – 149 (effective with
discharges 10/1/2016) addresses the previous listed coding guideline; DRG validation
versus clinical validation.
Clinical criteria and code assignment
ICD-10-CM/PCS Coding Clinic, Fourth Quarter ICD-10 2016 Pages: 147-149 Effective with
discharges: October 1, 2016
 
Bone, R.C., Balk, R.A., Cerra, F.B. et al. Definitions for sepsis and organ failure and guidelines
for the use of innovative therapies in sepsis. The ACCP/SCCM Consensus Conference
Committee. American College of Chest Physicians/Society of Critical Care Medicine. Chest.
1992; 101: 1644–1655
 
Levy, M, et al. 2001 SCCM/ESICM/ACCP/ATS/SIS International Sepsis Definitions Conference.
Int Care Med (2003) 29:530-538.
 
Singer, M, et al.  The Third International Consensus Definitions for Sepsis and Septic Shock.
JAMA.  2016; 315(8):801-810.
 
 
 
 
 
 
 
 
 
66
 
References
 
 
 
https://medical-dictionary.thefreedictionary.com/empirical+treatment
 
https://acphospitalist.org/archives/2016/08/q-a-sepsis-3.htm
 
https://www.dictionary.com/
 
 
 
 
 
 
Coral F. Fernandez, RN CCDS CCS
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Explore the comprehensive guide compiled by Coral F. Fernandez, RN, CCDS, CCS, shedding light on the life cycle of a claim, denials, appeals, and the significant financial impact they have on healthcare organizations. Understand the reasons for claim denials, the potential losses incurred, and strategies to mitigate denials for optimal revenue cycle management.


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  1. Denials and Appeals and CDI Compiled by Coral F. Fernandez, RN CCDS CCS August, 2017 September 2018 1

  2. INTRODUCTION Coral F. Fernandez, RN CCDS CCS 27 years with Baptist 2 years as a file clerk in HIM (prior to EMR) 25 as an RN 18 years in CDI 2 years as System CDI Auditor/Educator Lifelong learner Compulsive reader Insatiably curious English language enthusiast 2

  3. Life cycle of a claim 1. Services rendered patient diagnosed and treated 2. Charges entered 3. Coding 3

  4. Life cycle of a claim 4. Adjudication for expected reimbursement the billing system calculates what the payment should be, Medicare expected reimbursement based on APC and MS-DRG, other payers expected reimbursement is based on the modeling of each contract for example, if the insurer pays lab visits at 80% of charges, the billing system will take that into account in determining expected reimbursement 4

  5. Life cycle of a claim 5. Editing and correction of claim claims scrubbing fixes duplicate/illogical/invalid coding, modifier requirements, coverage determinations, missing codes 6. Billing claim is submitted to the payer and accepted and paid, accepted and denied, or partially paid/denied 7. Collections and appeals 5

  6. Denials A denial is any claim paid less than expected. According to The Advisory Board, denials cost health care organizations about 3% of their net revenue stream (2013). Roughly 67% of all denials are appealable. It is estimated that around 90% of all denials are preventable. 6

  7. Losses from denials Healthcare organizations' annual losses from denial write-offs range from as little as 1% of net patient revenue to as high as 5%. For an average 300-bed organization, 1 percent of net patient revenue can equate to $2 million to $3 million annually. - McKesson 7

  8. Some reasons for denial of claim Technical double billed, visits should have been combined, etc. Medical necessity, prior authorization, late notification, length of stay, referrals, utilization review Experimental and/or investigational treatments, new technologies Services not covered (payer contract defined or not?), bundling Services billed as inpatient that should have been billed as outpatient and vice versa 8

  9. Some reasons for denial of claim Waited too long to file the claim Proper codes are missing (incomplete, invalid, don t correspond to the treatment rendered) Insurance company lost the claim and then the claim expired Preauthorization Patient did not acquire referral from a physician Two services provided in one day Ran out of authorized sessions Authorization time ran out Patient changed insurance plan Patient lost coverage (late in paying COBRA, for example) Claim sent to incorrect managing company Services rendered at the wrong location Provider isn t enrolled with the insurance company Patient has an out-of-state insurance plan 9

  10. Some reasons for denial of claim Coding incorrect code assignment, errors in sequencing, coding separately things that should have been combined into one code, invalid diagnosis or procedure codes Clinical validity of diagnosis (-es), clinical criteria of provider different than clinical criteria of insurer 10

  11. Medicare Denials Process From CMS.gov Appeals Levels Redetermination by a Medicare contractor (MAC) Reconsideration by a Qualified Independent Contractor (QIC) Hearing by an Administrative Law Judge (ALJ) Review by the Medicare Appeals Council Judicial Review in Federal District Court 1. 2. 3. 4. 5. 11

  12. Statistics March, 2017 from Becker s Hospital Review denial rates for hospitals with 250-400 beds Northern Plains 10.58 percent South Central 8.88 percent Midwest 7.89 percent Southern Plains 7.72 percent Pacific 7.58 percent Northeast 7.21 percent Mountain 7.18 percent Southeast 7.14 percent 12

  13. Inpatient Coding Denials and Appeals 13

  14. DRG Validation Coding vs. Clinical ICD-10-CM Official Coding Guidelines for Coding and Reporting, effective October 1, 2016, Section I. Conventions for the ICD-10-CM 19. Code assignment and Clinical Criteria The assignment of a diagnosis code is based on the provider s diagnostic statement that the condition exists. The provider s statement that the patient has a particular condition is sufficient. Code assignment is not based on clinical criteria used by the provider to establish the diagnosis. 14

  15. Code Assignment & Clinical Criteria Guideline 19 Explanation by Nelly-Leon Chisen at an AHIMA Clinical Coding Meeting This guideline was created to separate coding and clinical validation so RAC denials related to clinical validation would not be labeled as coding errors Clinical validation is a separate function, but it s a hospital s decision on how to handle this from a coding perspective Payers do have specific clinical guidelines which have to be followed 15

  16. Remember The inpatient coder has NO CHOICE but to code what is documented in the record as a diagnosis by the provider. 16

  17. DRG Validation vs. Clinical Validation The distinction is described in the Centers for Medicare & Medicaid (CMS) definition of clinical validation from the Recovery Audit Contractors Scope of Work document and cited in the AHIMA Practice Brief ("Clinical Validation: The Next Level of CDI") published in the August issue of JAHIMA: "Clinical validation is an additional process that may be performed along with DRG validation. Clinical validation involves a clinical review of the case to see whether or not the patient truly possesses the conditions that were documented in the medical record. Clinical validation is performed by a clinician (RN, CMD, or therapist). Clinical validation is beyond the scope of DRG (coding) validation, and the skills of a certified coder. This type of review can only be performed by a clinician or may be performed by a clinician with approved coding credentials." 17

  18. CDI and Coding If clinical indicators are supportive of a particular diagnosis but not strongly supportive, a CDI query may help avoid a denial for claim after billing. Unless there is an after discharge review process in place, the only way the CDS is going to be notified that a CDI query may help avoid a denial for claim is if the inpatient coders communicate this. TEAMWORK 18

  19. The Bigger Picture What attracts the attention of payers at the end of a patient s stay? Short stay, long stay Specific principal diagnoses Specific DRGs Claims with only one CC or MCC are denied more often than claims with multiple CCs and/or MCCs 19

  20. CDI in the bigger picture What s wrong with the one and done CDI program? If YOU were an auditor for an insurance company and it was your job to look for ways to save the company money by looking for claims to deny (for whatever reason), wouldn t you look for claims with only ONE CC or MCC to minimize the amount of work you had to do to decrease the amount paid out to the provider? As an auditor, you d only have to deny ONE diagnosis successfully to change the reimbursement for that claim. 20

  21. CDI in the bigger picture What s wrong with the one and done CDI program? Claims with only one CC or MCC are denied more often than claims with multiple CCs and/or MCCs. CDI queries that add additional CCs and/or MCCs to a patient s problem list are INVALUABLE. 21

  22. Journal of AHIMA Clinical Validation: The Next Level of CDI July 2016 (There is also an article from Journal of AHIMA entitled, Taking Coding to the Next Level through Clinical Validation ) From 2013 Practice Brief, Guidelines for Achieving a Compliant Query Practice : A query is appropriate when the health record documentation provides a diagnosis without underlying clinical validation. When a practitioner documents a diagnosis that does not appear to be supported by the clinical indicators in the health record, it is currently advised that a query be generated to address the conflict or that the conflict be addressed through the facility s escalation process. 22

  23. Journal of AHIMA Clinical Validation: The Next Level of CDI July 2016 (There is also an article from Journal of AHIMA entitled, Taking Coding to the Next Level through Clinical Validation ) It is also important to note that clinical validation is a somewhat subjective concept as practitioners often disagree how to define conditions . CMS 2013 Recovery Audit Contractor Scope of Work: Clinical validation involves a clinical review of the case to see whether or not the patient truly possesses the conditions that were documented in the medical record. Clinical validation is performed by a clinician. 23

  24. Journal of AHIMA Clinical Validation: The Next Level of CDI July 2016 Determining the clinical validity of a reported condition is subjective, which is why denials are plentiful. CMS only states, As with all codes, clinical evidence should be present in the medical record to support code assignment. Organizations are also well served to develop internal guidelines defining those diagnoses most vulnerable to denials. The goal of these guidelines is to promote consistency among CDI and coding professionals in identifying diagnoses that appear to lack sufficient clinical evidence. 24

  25. Organizations are also well served to develop internal guidelines defining those diagnoses most vulnerable to denials... 25

  26. Clinical Denials and Appeals 26

  27. Empirical Treatment EMPIRICAL TREATMENT: - medical treatment that is given on the basis of the doctor's observations and experience 27

  28. Dont be afraid to point out the seemingly obvious This letter is in response to the audit findings forwarded to us by your office. We disagree with the recommendation to delete code J96.01, (Acute respiratory failure with hypoxia) as a secondary diagnosis. Per ER record, patient with history of COPD with complaints of worsening shortness of air at rest, supposed to be on O2 but has been unable to afford it after insurance stopped covering it. In determining his need for continued oxygen supplementation at discharge, Mr. Smith s oxygen saturations were measured on room air at rest. This resulted in oxygen saturations measured 85% - 88%. Patient was discharged with home oxygen. 28

  29. DRG Validation vs. Clinical Validation AUDITOR/EDUCATOR FOR BAPTIST HEALTH SYSTEM: The notification from The Insurer is labeled, DRG Validation Worksheet. Is this denial based on coding guidelines or is it based on a clinical validation audit? If this is a clinical validation audit, The Insurer would be better served by a representative who is clinically educated and trained. This auditor, on behalf of Baptist Health System, reads the qualifications of the representative for The Insurer as RHIA, CCS. The RHIA is a professional certification administered by the American Health Information Management Association (AHIMA) and passing the exam results in licensure for health information management. Eligibility for the RHIA includes successful completion of at least a baccalaureate level degree in an accredited Health Information Management program and a passing score on the exam, offered by AHIMA. The CCS (Certified Coding Specialist) is also a certification offered by AHIMA. This level of higher education and certification is admirable, however RHIA and CCS are not clinically based. Baptist Health System respectfully requests that, if this denial is indeed based on a clinical validation audit, The Insurer have this claim and the medical records submitted reviewed by a clinician. 29

  30. Dont be afraid to point out the seemingly obvious INSURER: After the left heart cath, the cardiologist documented that this patient has a Type II NSTEMI in the setting of V.T. This patient was diagnosed as having a NSTEMI, taken for cardiac cath, had an attempt at PTCA and medication adjustment per the Cardiology team. It was noted that the physician documented non ST elevation myocardial infarction in the provided medical record. The hospital has coded a subendocardial infarction or NSTEMI on this claim based on an elevation of troponin above the range of normal. 30

  31. Dont be afraid to point out the seemingly obvious BAPTIST AUDITOR/EDUCATOR: The insurer s letter dated 04/25/2018 includes, The hospital has coded a subendocardial infarction or NSTEMI on this claim based on an elevation of troponin above the range of normal. Baptist Health Lexington has coded an NSTEMI based on physician interpretation of this individual s clinical picture and physician documentation thereof. 31

  32. Dont be afraid to point out the seemingly obvious INSURER: To confirm the diagnosis of NSTEMI the medical record is examined for new ischemic changes on serial EKGs, a rising pattern of troponin levels, an appropriate clinical picture, and confirmation of the diagnosis by a cardiologist. BAPTIST AUDITOR/EDUCATOR: Confirmation of the diagnosis of NSTEMI by a cardiologist is not required, however, in this case, NSTEMI was documented by three cardiologists and a hospitalist. 32

  33. Dont be afraid to point out the seemingly obvious INSURER: On review of the medical record there was no history of dementia and the physician did not document any dementia. BAPTIST AUDITOR/EDUCATOR: In fact, Dr. John Q. Public, MD documented this very thing in his progress note dated 05/04/2017. Please see the screen clipping below. A copy of this progress note will be sent with this letter. 33

  34. Dont be afraid to point out the seemingly obvious INSURER: One would expect to find consistent documentation of the diagnosis throughout the record. BAPTIST AUDITOR/EDUCATOR: The present on admission indicator listed for DIAGNOSIS on PATIENT s claim is NO. One would not expect to see evidence supporting this diagnosis on admission or documentation throughout the record that the diagnosis is assumed or likely, because the present on admission indicator for that particular diagnosis was reported as NO. DIAGNOSIS was not present on admission. 34

  35. Dont be afraid to point out the seemingly obvious BAPTIST AUDITOR/EDUCATOR: As always, Baptist Health System appreciates The Insurer s careful review of medical record documentation and respectful attention to correspondence pertaining to the appeals process. 35

  36. Sepsis 1, Sepsis 2, and Sepsis 3 1. Bone, R.C., Balk, R.A., Cerra, F.B. et al. Definitions for sepsis and organ failure and guidelines for the use of innovative therapies in sepsis. The ACCP/SCCM Consensus Conference Committee. American College of Chest Physicians/Society of Critical Care Medicine. Chest. 1992; 101: 1644 1655 2. Levy, M, et al. 2001 SCCM/ESICM/ACCP/ATS/SIS International Sepsis Definitions Conference. Int Care Med (2003) 29:530-538. 3. Singer, M, et al. The Third International Consensus Definitions for Sepsis and Septic Shock. JAMA. 2016; 315(8):801-810. 36

  37. Recent Denial Arguments BHS has received dozens of denials based on patients not meeting sepsis criteria as outlined by the Sepsis 3 criteria. Sepsis 3 criteria were SUGGESTED as criteria which SHOULD replace clinical criteria outlined in Sepsis 2 in an article published by JAMA in February 2016. BHS has received some denials for sepsis based on patients not meeting Sepsis 3 criteria on patients whose hospitalizations occurred prior to February 2016. BHS has received denials which included statements to the effect that the American Medical Association has now defined sepsis as organ dysfunction caused by a dysregulated response to infection. BUT 37

  38. Quotes from the Sepsis 3 article, published by JAMA February, 2016 The task force recognized that no current clinical measures reflect the concept of a dysregulated host response. Interestingly, in 2016, ACP Hospitalist interviewed Dr. Clifford S. Deutschman, MS, MD, co-chair of Sepsis-3 and a professor of pediatrics and molecular medicine at Hofstra-Northwell School of Medicine in Hempstead, N.Y. In this interview, Dr. Deutschman said, If you want to absolutely 100% without fail identify a patient who has sepsis, you can't.... Sepsis is life-threatening organ dysfunction caused by a dysregulated host response to infection. Relatively straightforward and clinically pretty much useless and, nothing we're saying supersedes the judgment of a good clinician. 38

  39. Recent Denial Arguments Even when the appeal author, writing on behalf of BHS, argues that the patient met sepsis criteria for organ dysfunction caused by a dysregulated response to infection as evidenced by a SOFA score of 2 or greater, the insurers often send another denial letter (second level) negating the clinical application of the SOFA score. 39

  40. Recent Denial Arguments INSURER: Though the facility reviewer noted a PF Ratio of <400 in the appeal letter, this reviewer is unable to find supporting physician documentation of a PF Ratio in the medical record as provided. Therefore, we are unable to determine if the physician used PF Ratio criteria in the diagnosis of sepsis. 40

  41. Recent Denial Arguments BAPTIST AUDITOR/EDUCATOR: To assert that a physician must not only take PF ratio into account in diagnosing sepsis but must also document that consideration is ridiculous. This auditor has been unable to find professional guidelines dictating to the physician that he or she document every aspect of medical decision making in arriving at a diagnosis and treatment plan. The clinical gestalt required of a physician in arriving at a diagnosis cannot be reduced, especially by a non-physician, to determining which aspects of a patient s clinical picture are relevant. 41

  42. DEFINITIONS GESTALT: An organized whole that is perceived as more than the sum of its parts This auditor has been unable to find professional guidelines dictating to the physician that he or she document every aspect of medical decision making in arriving at a diagnosis and treatment plan. The clinical gestalt required of a physician in arriving at a diagnosis cannot be reduced, especially by a non-physician, to determining which aspects of a patient s clinical picture are relevant. 42

  43. DEFINITIONS GESTALT: is a sensory interpretation that is greater than the sum of its parts, gestalt identification is the process by which healthcare practitioners organize clinical perceptions into specific diagnostic ideas. Gestalt is clearly not intuition. It is the meticulous acquisition of complex cognitive skills. 43

  44. DEFINITIONS GESTALT: the ability to recognize patterns of disease perceptual grouping Amidst the explosion of technological advancement in medicine, the ability of the physician s mind cannot be replicated. 44

  45. Recent Denial Arguments INSURER: The appeal letter references a P/F ratio of 348; however, the physician does not document the P/F ratio nor its significance. BAPTIST AUDITOR/EDUCATOR: This auditor, writing on behalf of Baptist Health System, finds no opinion whatsoever in the referenced article Singer, M, et al. The Third International Consensus Definitions for Sepsis and Septic Shock. JAMA. 2016; 315(8):801-810. regarding the recommendation of or necessity for physician documented interpretation of clinical indicators of organ failure (as outlined in the Sequential Organ Failure Assessment Score table) when that physician has diagnosed sepsis. 45

  46. Every denial letter must be carefully reviewed Mr. Jones reported fever to 103.9 prior to coming to the hospital with rigors and chills. His vital signs on presentation included oral temp 101.1, pulse 112, respirations 24, blood pressure 109/43. The INSURER included infectious source, a NORMAL WBC count, and NORMAL respiratory rate of 20 in his/her findings. 46

  47. Every denial letter must be carefully reviewed Mr. Jones had WBCs 11.18 on admission which increased to 13.12 the following day, neutrophils 88.9%, lactate 1.4, and CRP 10.44 on admission which increased to 22.76 the following day. The INSURER included a NORMAL WBC count from the day of admission but did not address other pertinent labs. 47

  48. Every denial letter must be carefully reviewed Actually, sepsis was documented clearly and consistently in the ED, History and Physical, progress notes, AND discharge summary. The INSURER wrote that sepsis was documented in the discharge summary. 48

  49. Every denial letter must be carefully reviewed Actually, the patient met both the insurer s criteria for acute respiratory failure as well as Baptist Health System criteria for acute respiratory failure. The INSURER wrote that criteria were not met for acute respiratory failure. 49

  50. Recent Denial Arguments INSURER: In the discharge summary, the physician stated, Principal problem: Diabetic ketoacidosis without coma associated with diabetes mellitus due to underlying condition. The physician stated in the discharge summary that the presenting problem was diabetic ketoacidosis. 50

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