In this episode, Gloryanne Bryant, HIM Coding and CDI Compliance Consultant, discusses how coding audits help meet compliance.
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Learn how to listen to The Hospital Finance Podcast® on your mobile device.Highlights of this episode include:
- Why we need coding audits
- How often a coding audit should be conducted
- What an appropriate number of records or encounters to include in an audit
- What determines if there is a variance or error or not
- What typical patterns/trends that are seen in coding audits
- Key action items that a coding audit might generate
Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome Gloryanne Bryant. Gloryanne has over 40 years of experience in HIM coding, CDI, and compliance. She is the past president and director of CHIA, having been an HIM volunteer on local, state, and national levels, and served on and led many CHIA, AHIMA, HFMA, and ACDIS workgroups and committees. She is a sought-after advisor, mentor, national educator, speaker, and author on clinical coding compliance and ethics, reimbursement, CDI, physician querying, coding regulations, and denials. For more than five years, she’s been an expert witness and consultant for clinical coding, documentation, charging, denials, and MS-DRGs. Currently, she works part-time as an independent HIM coding and CDI compliance consultant.
In this episode, we’re discussing coding audits help meet compliance. Welcome, and thanks for joining us again, Gloryanne.
Gloryanne Bryant: Well, thank you for asking me to come back and do another podcast. It’s exciting to be with everyone today.
Kelly: We are happy to have you back. So, let’s go ahead and jump in. So why do we need coding audits?
Gloryanne: Well, that’s a great question. Actually, in today’s environment, we’re seeing more and more automation, technology, artificial intelligence. There’s a lot of challenges. So, there are challenges and with challenges, mistakes can happen. But there’s basic reasons, really, that we want to have coding audits conducted. We want to assess the overall accuracy of the medical coding that’s being reported, meaning error identification and correction. I’ll talk a little bit more about that in a moment. We also would like to identify risks and mitigate them. We don’t want to be overpaid. We don’t want to be underpaid. We want to be paid correctly for the encounter. Everybody in healthcare should be wanting that and trying to get that. So having a coding audit conducted can help in that area. We certainly would like to identify any gaps or opportunities for improvement. Like any human being, we want to do the right thing. We want to improve. And then we want to also with an audit, it can have that non-biased feedback to the coding staff, individuals that are performing the coding function. Identify also educational opportunities and provide those opportunities for education. And then I also believe that coding audits can identify documentation issues, clinical documentation issues, and querying opportunities that you can take action on. I would add that from my many years of experience in the industry, that conducting both internal and external audits is a best practice in any organization. And we’ll come back to that topic in a moment.
Kelly: Oh, that makes a lot of sense. So, I mean, I guess the next question, the best question would be, how often should a coding audit be conducted?
Gloryanne: After again many years of experience, I would say that at a minimum, a minimum twice a year, but quarterly is often the normal frequency I see being offered or being conducted in hospital environment and physician practice. Now, having said that, I like to conduct audits after ICD-10-CM/PCS coding updates. So, each year those come in October and I like to around 45 to 60 days later conduct an audit to really assess whether we’ve grasped all those new coding changes. Now, that also goes with the CPT coding updates, which come each January. So, I like to see an audit conducted 45 to 60 days after that implementation as well. So, you can see right there we’ve got those designated times. And then in between times, there could have been an OAG report that came out that said there’s a problem in a certain area or several areas. We would want to have that. And then once the audit result findings are finalized, there might be a need to conduct another audit sooner than later. If we find there’s a compliance risk that we’ve identified in this audit, then we need to have another repeat follow-up audit. This happens when there is a compliance risk identified or a need of a particular pattern or trend that we want to really focus on. So, at a minimum, again, twice, ideally four times a year, and those four times a year could include these date opportunities from the coding systems.
Kelly: Wow, that sounds very helpful and that makes a lot of sense to me. So, what would be an appropriate number of records or encounters to include in that audit?
Gloryanne: The audit and sometimes we also call it a review. Some folks get excited when they hear a word.
Kelly: Yeah, that’s kind of a negative–
Gloryanne: [crosstalk] connotation.
Kelly: Yes, yes, definitely.
Gloryanne: Yeah. So sometimes we use the word review, too. Just depends on the audience that you’re talking with. But for this conversation, we’re using the word audit, so you can think review as well. I want to say as far as the number of records or encounters that you should have, the reality is it can depend, and I’m going to give you a couple examples of why that would be, but I always want to think there’s a minimum, so a minimum number that we would look at. Sometimes we hear this being 20 encounters or 50 encounters. And there’s a variety of reasons. For example, if you’re doing like a probe audit, 50 encounters are what’s often said from legal to do. At a minimum, we always want to make sure whatever the reason for the audit, if it’s an annual audit, biannual, quarterly audit, you want a decent sample size. And part of that is because once you have one or two mistakes being made, you can really move your percentage of accuracy down. So, you want to make sure you’re having a number that really makes sense. And I also say that it also depends on how large an organization a practice is on the number of encounters that you’d want to conduct your review on based upon the volume for a particular timeframe.
So, let’s take, for example, an inpatient hospital has about 900 discharges per month from that hospital. And we want to take 10% of that. So, 90 encounters for our auditor review. Now, if it’s a very small hospital with only 300 discharges per month, 10% would be 30. And then you want a minimum number of 20 at least. So, it’s going to depend on a couple things when you talk to your hospital, when you’re arranging the coding audit schedule. You want to make sure you’ve thought about these things. Another way is to use RAT-STATS system to do a volume selection. Now, this is a statistically valid determination on the number of encounters based upon the overall number. Now, I was using 10% there, but we could do a statistically valid based upon 900 encounters or based upon 300. Always having a minimum threshold. So, you’re looking at maybe five records wouldn’t make sense. We want to make sure it’s a valid number. Now, also, I like to sit with my revenue cycle leaders, director, CFO, HIM director, coding director, CDI director, and talk about what would be a decent number for your organization.
And we set that in place for the year of what that number can be. Certainly, if I found that I had a compliance risk in a particular area, and we can say maybe it’s the sepsis diagnosis. And so, we would want to make sure we do a focused audit, maybe just on sepsis as a diagnosis principle or secondary. So that may be different. That’s a one-off, maybe from your regular schedule of audits. And so that number may be a one-off number. So, you want to look at the DRG 871 or 872 and see how many volumes you typically have across the year, do an average of the 12 months, and then you have the number average that you probably would like to look at for that particular focused number of encounters. So, it’s good to talk about this when you’re making your coding audit plan for the year of different things like that and make sure you build in your plan. The chance to do these one-offs. Maybe it’s a focused review of sepsis. Maybe it’s severe malnutrition because those are both being targeted right now across the industry as focused areas.
So, your regular audits may have a certain number or volume, and then you may have a certain number of volume for these one-offs. And you may use something like RAT-STATS, maybe something that legal has asked you to audit and they’ve asked for a certain number. But for your regular annual, your regular quarter audits, you want to think about a number that makes sense so you have a good view into what’s going on with your coding accuracy.
Kelly: Wow, thank you for all of that. That was very, very helpful. So, what determines if there is a variance or error or not?
Gloryanne: Okay. This one here, this is where we get into semantics a little bit. Unfortunately, again, the word, as I mentioned before, the word audit sometimes gets people kind of uncomfortable. So sometimes they say, “Let’s do a review.” The same thing happens here. The word error makes people a little uncomfortable, but the word variance is a little softer term I found to be used when I’m conducting audits. So, I will say that we did a audit review and we found X number of variances. Now we have to put some definitions to that, “What is a variance/error and other findings?” So, there may be a way to put this into your audit scope and include definitions that everybody would agree to because that’s important to have the agreement of revenue cycle, HIM, coding leadership that they understand how you’re going to determine if something’s wrong or not, because we’re going to use that in our overall accuracy determination. So, let’s go back to the beginning on this one. The word variance is just a softer term for error, but easier for staff to accept. And having said that, a variance is a change in a code that usually implies that the code has impacted the reimbursement. So let me go over that one again because this is an important one.
The variance/error is usually implied that the code that’s being changed, deleted or revised has an impact to the reimbursement. And that impact to the reimbursement can be an increase or it could be decreasing the reimbursement. So, a change or revision in the coding that does not result in a change to the reimbursement, doesn’t change it up or down, it just is educational finding. So, when you ask the question, what determines if there’s a variance? There’s also the piece of, well, what if it’s not impacting payment? What do we call it? And we usually call that an educational finding. And so, you’re going to, when you conduct this audit review, you’re going to have these definitions for variance error, and you’re going to have educational finding. And you might have even other findings that you found. Maybe not educational to the coding. Maybe it was actually something that happened on the billing side or a system error or something regarding the CDI side. And if you’re using computer assisted technology, maybe it’s some finding in that area. So, I like to put my error variance, my education for coding, and then other also listed. So, there’ll be three areas for findings that’ll be very helpful for your audit/review that you’ll put on the audit findings so that what’s going on. The big focus will be, again, that variance type that resulted in either an over or an under reimbursement. And so that’s really important with educational having no financial impact.
Kelly: Got it. Yeah, and I agree about the word variance in error. That’s a very good piece that you pulled out there. From your experience conducting coding audits, what typical patterns or trends are seen in coding audits?
Gloryanne: So, from my experience, there are several patterns and trends that I’ve seen, particularly in inpatient, and I can talk a little bit about outpatient CPT as well. But on the inpatient for principal diagnosis selection, it’s usually more difficult and we find more variances when there’s two or more acute conditions all present at the same time when the patient’s admitted. This can sometimes mislead the coding professional to select the wrong principal diagnosis. And one of the things that can alleviate that is certainly reviewing what is present on admission and what were the plans for those different multiple diagnoses. Can it be determined which was the more acute of those two or three that are going on, the resource consumption of those two or three multiple conditions and selecting the thrust of care condition and the circumstances of admission, meeting that definition of principal diagnosis is the condition found after study to be chiefly responsible for the admission to the hospital for care. The next area that when conducting audits reviews in the coding area, we see secondary diagnoses selection often being a problem area. And from my experience with denial management and payer denials over the last three years, this is more often found to be a problem than principal diagnosis.
And by that I mean we see about 65% of cases with secondary diagnosis being the problem area for a denial. And we see this in audits as well pointing to that selection. So, I’d like to just read to the audience quickly and it’s short the ICD-10-CM official guidelines for coding and reporting that tell us that additional clinical significant conditions that affect patient care in terms of requiring these elements. Clinical evaluation or, and note the word or it’s not the word and so it’s very important. So, it’s a significant addition. Clinical evaluation or therapeutic treatment or diagnostic procedures or extended the length of hospital stay or it increased the nursing care and/or monitoring. That clinically significant condition that was affecting patient care in terms of those elements, any one of them, just one, would then result in reporting, meaning coding that condition, that diagnosis. And that substantiates the secondary diagnosis and would be very much important for coding staff to look at each secondary diagnosis condition and bump it up against this additional guideline for secondary diagnosis reporting and reading through the different criteria elements to see, did I meet one of these to support the reporting of this condition or diagnosis? This can really make a difference in the overall accuracy rate of your coding. And it can also greatly impact the reimbursement.
Secondary diagnosis can be a major complication comorbidity under the MS-DRG system. It can certainly impact severity of illness and risk of mortality under the APR DRG system and can be an ACA HCC under those other payment methodologies. These secondary conditions can result in an impact to payment overall. So, they’re very, very important ones to have to be accurate. Patterns and trends within these areas, both principle and secondary, could be ones that we look at. The ones I’m seeing right now for secondary diagnosis is a secondary diagnosis around acute respiratory failure, a secondary diagnosis for severe malnutrition. I’m also seeing patterns and trends around metabolic encephalopathy coded as a secondary diagnosis. So those are things I think the listeners might find helpful to know that if you’re not auditing those that I just mentioned, these should be included in your audit scope as diagnoses that you want to validate as secondary conditions.
Kelly: Sure. No, we appreciate that. Can you describe some key action items that a coding audit might generate?
Gloryanne: Yeah, and you can tell from the way that we’re talking in this podcast, we’ve got several steps and elements to having a coding audit review conducted. We’re moving down kind of the process. We talked about just now principal diagnosis and secondary diagnosis as potential areas where we have findings. There are others as well. We won’t go into those at this time. So, what would we do next? Well, we have a finding. We have a summary of that finding. So, there should be an audit summary report. This summary report should identify the action items and a timeframe and the individual responsible for that action item. I have found that sometimes we put this nice list of action items. We don’t even discuss it any further of who’s responsible to do it. What would be the timeframe to complete it? What we would want to do is make sure that we have corrections being made. Your audit summary report and action items should include making corrections of any variances, errors that you’ve identified. This would include rebilling all the way through to PFS department, your billing department to ensure that the rebilling has been actually completed. That I found gets sometimes dropped off. The coding staff made the correction, but billing PFS didn’t do a rebilling to the payer.
So that’s an important compliance aspect to remember that we have to make corrections. And then we identify through our audit any documentation issues. We haven’t talked about that a lot, but clinical documentation is foundational, the cornerstone for which coding is based. And so, the identification of any documentation issues should be in this audit summary report with its action items. And that could be that you need to make physicians aware of conflicting documentation, contrasting documentation, missing documentation. So, I use the word awareness because sometimes the word education to physicians, they’re highly educated individuals. And that sounds sometimes a little punitive. So, it’s kind of more an awareness, a softer tone to say we want to make them aware of documentation improvement areas. And that would be part of my action items. Now with that, we would learn about querying opportunities. This would bring in our concurrent CDI or clinical documentation integrity improvement staff, and they should know about documentation issues, the ones I just mentioned. They may be the ones that actually conduct this awareness education to the physician providers to make them see that they can document, even if it’s documentation in an EHR, they can document in an improvement way. And so, we want to make sure our action items address any querying opportunities that we may see. Overall, the audit can help improve coding accuracy going forward, which we know everybody wants. We want to improve, do it right, get it right each and every time.
Kelly: Wow, thank you so much for that. And here’s a question we get asked often. So should hospitals or practices perform internal and external coding audits?
Gloryanne: Well, as I briefly stated when we first started this discussion, I believe that both internal and external audits should be performed. Now, some organizations feel that they have a very robust internal. We have this process in place. It’s working well, but I would say you once in a while, once a year, need to see a different view of things, a different lens into the coding that’s being conducted. So, an unbiased perspective removed from the inner workings of the organization, external audit is really important to have conducted. I’ve been on the receiving side of audits, and I’ve been on the performing side of audits. And I’ve always found external audits to be very helpful, very in life, lightning. We have a different perspective, and you think, “Well, everybody’s educated,” but people get educated in different ways and different levels to different extent. And we have individuals with different experiences and knowledge. So, I think bringing in an external practice, external audit team is very helpful to your overall compliance in the coding realm.
Kelly: That sure makes sense to me. Well, thank you so much for joining us today, Gloryanne, and for sharing your insights on coding audits help meet compliance. Thank you again.
Gloryanne: My pleasure.
Kelly: And if a listener wants to learn more or contact you to discuss this topic further, how best can they do that?
Gloryanne: They can contact me directly at my email. And that would be my first name, Gloryanne, G-L-O-R-Y-A-N-N-E, with a B at the end for Bryant, at sbcglobal.net.
Kelly: Thank you so much for providing that for us. And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…
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