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The cost of a second chance: outpatient coding denials

Assessing current outpatient coding procedures and creating a plan that aligns HIM, clinical documentation improvement, and revenue cycle will help reduce claim denials and improve the overall financial health of your organization.

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Avoiding Outpatient Coding Denials

Time is money.  It’s a well-known phrase that applies to every industry whether you are repairing a broken pipe or scrolling through endless pages of physician dictation to find the specific detail needed for a code.  Efficiency is a key component to keeping down costs.

Nearly 30 percent of hospitals report denials for outpatient coding errors, a rate that can take a sizable gauge out of an organization’s bottom line.  When the expenses  for the time and resources expended on finding the necessary documentation, resubmitting, and managing these claims are tallied up, more than 58 percent of hospitals spending upwards of $10,000 on the process.  Not the best way to manage cost.  Proactively assessing your current situation and implementing a plan can help reduce expensive denials and reduce staff frustration.

Organizational assessment of your CDI program

First things first: Does your organization have an outpatient clinical documentation improvement (CDI) program?  As the industry continues to see a dramatic increase in outpatient volume and outpatient claim denials, initiating an outpatient CDI program is necessary to ensure the right information is being accurately captured in a timely fashion, particularly since the patients leave immediately after their visit.

Pinpoint the source of denials

Take a look at your denials and analyze the data.  Where are they coming from?  Are they tied to documentation issues or coding issues?  ICD-10 will compound any existing problems, so taking the time to determine the primary source of the denials will help you proactively address any future complications.  Take the time now to amend your health information management strategy accordingly, and incorporate education and benchmarking metrics to track progress.

HIM/CDI/revenue cycle collaboration is a must

Denials affect all players in the revenue cycle: from health information management (HIM) teams to financial teams, so analyze your outpatient denial trends. Outpatient CDI should be focused initially on the areas that are most impacted by denials. Collecting information about your outpatient denial trends and patterns will help you determine which services need more education in order to improve documentation.  This process will ensure the areas most severely impacted by high dollar denials are addressed and aligned with your organization’s revenue cycle processes for real, quantifiable benefits.

Engage physician CDI champions

Physicians and clinicians must understand and embrace outpatient clinical documentation requirements, especially those that are a prime target for RAC auditors. Accurate clinical documentation impacts clinicians through better patient care, and impacts your organization by helping to improve financial stability—and this is especially important as we transition to ICD-10.  CDI specialists and physicians must expand their knowledge and understanding of the outpatient documentation compliance requirements in order to ensure quality patient care and maximize ambulatory payment classification (APC) reimbursement to ensure the organization receives appropriate payment for providing the appropriate services and medications to patients.

Embracing health IT technology

Many outpatient clinical documentation issues can be resolved by educating clinicians, CDI specialists, and coders.  Another essential component, however, is reviewing workflows and redesigning processes with the addition of automated solutions and technology, and utilizing and enhancing EHR templates designed to capture co-morbid conditions and severity of illness, when appropriate.  2015 is your time to evaluate your outpatient setting readiness for assistive technologies such as computer-assisted physician documentation (CAPD), computer-assisted CDI (CA CDI), and computer-assisted coding (CAC).

Tackling outpatient coding denials is matter of taking a comprehensive look at your data and working with your revenue cycle management team to determine the most impactful areas, and implementing a strategy that will support physicians and HIM teams, CDI specialists and coders through awareness, education, and benchmarked success.

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