MRA Thought of The Day – Word of Caution for Hospital CFOs

Ignore HIM at Your Own Risk

Four Numbers to Know

Medical records are going electronic at record-breaking speed. Spurred by meaningful use incentives, EHRs are being rapidly installed and core HIM functions quickly automated. Many HIM functions are already outsourced and hospital leaders plan to offload even more HIM tasks in the year ahead.

President, CEO

Charlie Saponaro, President, CEO


For example, a recent survey of 650 hospital leaders by Black Book Rankings found that 47% plan to outsource their coding efforts by October 1, 2015, the new deadline for implementing ICD-10-CM/PCS. There is already a 21% national coder shortage according to industry estimates. ICD-10 will make the situation worse. But there’s more.

Look Beyond Coding

Savvy hospital CFOs must look beyond coding to uncover the full impact of HIM operations on their organizations’ overall productivity, efficiency and outcomes.

HIM departments are the “clean-up crew” for patient access and billing errors. They are the guardians of patient privacy. And they are the critical link between clinical documentation and revenue cycle.

While some HIM functions are purely tactical, others are strategic to revenue cycle improvement and quality care. Here are four numbers for hospital CFOs to know about HIM performance:

  • 40% of clinical documentation is not ready for ICD-10. The relationship between physicians, CDI and HIM must be strong.
  • 38% of healthcare organizations expect revenue to decrease during the first year of ICD-10.  HIM professionals should be part of your claims denial team.
  • Nationwide, HIM departments receive over 28 million requests for medical records from RACs, patients, attorneys, and other third parties annually—generating nearly 1.5 billion in electronic and paper pages. The process must be carefully managed to avoid becoming a HIPAA breach statistic. Your HIM department is at the helm.
  • $3 billion has been taken back by the RACs. 48% of hospitals report increased administrative costs due to RAC. HIM departments are usually the first to receive RAC and other auditor record requests. They are your first line of defense in preventing recoupments.

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The above statistics are included in this one-page infographic describing the relationship between HIM and revenue cycle. It’s a great starting point for deeper discussions with your hospital CFO.


The bottom line? You can’t afford to ignore your HIM department as it undergoes massive change. What are your thoughts?



Eight Tips to Win Coding Denials

How to Successfully Navigate Appeals

Even with the temporary suspension of RAC reviews, hospitals continue to deal with insurance denials from a multitude of third party payers.


Cathie Wilde, CCS
Vice President of Coding

Responding to these coding denials is time consuming. HIM, revenue cycle and coding professionals are further frustrated when they believe their cases were correctly coded from the start. Despite their aggravation, hospitals must respond to coding denials and navigate the appeal process in order to receive payment for dollars they’ve rightfully earned.

The following eight tips provide guidance for effective appeals and coding denial resolution:

  1. Submit complete medical record documentation with the appeal.
  2. Enlist the participation and signature of the attending physician.
  3. Outline details in your appeal letter to substantiate your initial codes. Include pertinent clinical findings, official coding guideline references and specific notation of record documentation location (i.e. 6/8 hospitalist progress note). Be direct, succinct and to-the-point when addressing the issue of contention outlined by the denial letter.
  4. Don’t hesitate to ask for reconsideration if you feel strongly the record was coded correctly and is supported by the documentation and official coding guidelines.
  5. If a coding issue is discovered during review of a denial, share it with all coding staff so the same mistake isn’t made again.
  6. Keep track of denials and appeals. Use your denial and appeal data to identify trends and determine root causes of denials, taking steps to avoid similar future issues.
  7. Always share denial findings with other departments involved in the revenue cycle process such as CDI, administration, physicians and case management.
  8. Good communication helps prevent denials due to other root causes such as insufficient clinical documentation, medical necessity concerns, improper eligibility/authorization, invalid inpatient admission orders, and incorrect discharge disposition.

Coding Quality Points to Ponder

Nothing is more dangerous than an incorrect code. Whether in ICD-9, ICD-10 or CPT, your organization’s coding practices must be ethical, complete, accurate and compliant. So how are you measuring coding quality today? Which of the following best practices do you use?

Lynn Salois, RHIT, CCS, CDIPDirector of Coding

Lynn Salois, RHIT, CCS, CDIP
Director of Coding

  • Perform periodic internal coding quality audits.
  • Review all new hire records until coding accuracy standard is achieved.
  • Include focused and random audit samples.
  • Validate items through the auditing process.
  • Classify variances.
  • Identify root causes for coding errors.
  • Conduct education to address coding errors.
  • Capture, analyze and report results.

Keep in Mind

Coding compliance plans should be designed to reduce the potential for fraud and abuse and ensure the integrity of coded data.  The above best practices should be addressed within the framework of your overall coding compliance plan.

Best practice standard includes performing an internal coding quality audits on a quarterly basis and reviewing all new hire records until they achieve 95% coding accuracy standard.  In addition, an annual external coding quality audit is advised to ensure audit objectivity.

There is a degree of subjectivity in coding. Develop a standardized method of classifying errors and scoring the variances across your coding team.  Some coding errors are considered more serious than others and may weigh differently in the accuracy score.  For example, a critical variance would be inaccurate sequencing of the principal diagnosis, whereas a non-critical variance may be omission of a past medical history code.

Finally, develop a quarterly coding performance scorecard to outline the coding teams’ overall performance. Be sure to allow for identification of problem spots and improvement opportunities.

Maintaining a coding audit program reduces your risk for fraud and abuse while ensuring the highest integrity of coded data. It’s your greatest asset in improving your coding program.

What are your thoughts?

MRA Thought of the Day-Grasping the Full Definition of Principal Diagnosis

Cathie Wilde, RHIA, CCS, Vice President of Coding

A sixty-two year old patient is seen in the emergency viagra mail order room complaining of rectal bleeding. His HCT is 24 and his platelet count is 38,000. The admitting diagnosis is GI bleed. Makes sense.

However, per the history and physical, the patient has a history of a bleeding arteriovenous malformation and myelodysplastic syndrome with recurring thrombocytopenia. During the admission of this one day stay, the patient receives platelet and packed cells transfusions, two units each.

Considering a Principal Diagnosis

The final diagnoses per discharge summary are lower GI bleeding due to arteriovenous malformation, acute blood loss anemia, and advanced transfusion dependent myelodysplastic syndrome.

What Principal Diagnosis should be assigned for the above case scenario?

• Consider the definition of Principal Diagnosis – that condition after study to be chiefly responsible for occasioning the admission.

• Consider the treatment rendered to the patient during the hospitalization.

• Consider coding conventions and Coding Clinic Guidelines.

• Consider the complete documentation provided within the medical record.

The coding challenge here is that all three final diagnoses potentially meet the definition of Principal Diagnosis.

Take it All into Account

Some might be tempted to code the bleeding AV malformation as the Principal Diagnosis since this is the etiology of the anemia and the rectal bleed. However, no treatment or work-up was done regarding the AV malformation.

Some might consider the myelodysplastic syndrome as Principal Diagnosis. However, this is a chronic condition and not the acute reason/manifestation for occasioning the admission.

Coding Clinic guidelines regarding to two or more conditions each potentially meeting the definition of Principal Diagnosis state that either may be sequenced first unless the circumstances of the admission, the therapy provided, diagnostic workup indicate otherwise. In this case, the focus of treatment was directly specifically to the anemia and the thrombocytopenia given the transfusions and monitoring of hematologic lab values.

Always take into consideration the full circumstances of the patient’s admission and the treatment rendered in conjunction with Coding Clinic guidelines when assigning the Principal Diagnosis. Assess the entire record. Don’t take at face value the Principal Diagnosis on the discharge summary without taking into consideration the above factors. Reference Coding Clinics 2Q 2002, p. 64-65 and 1Q 2002, p. 3

What would you do?