Accurate documentation can improve your hospital's bottom line

Case managers are perfectly positioned to take charge

In today's health care environment, it's more important than ever for hospitals to make sure that documentation in the patient record reflects the severity of patients' conditions and the level of services they receive.

"There has been a big movement toward documentation improvement in hospitals. Hospitals are making an effort to get physicians to document completely and to use the most appropriate terms to capture severity of illness," says Deborah Hale, CCS, president of Administrative Consultant Services LLC, a health care consulting firm based in Shawnee, OK.

Since the inpatient prospective payment system using diagnosis-related groups (DRGs) started in 1983, the number of dollars a hospital receives in reimbursement has been directly linked to how effectively physicians document severity of illness and how well coding staff take the documentation and translate it into accurate codes, Hale says.

"When physician documentation accurately reflects the true clinical picture of the patient, it is easier to capture patient acuity, which in turn potentially increases the hospital's case mix index, leading to an increase in revenue," adds Doris Imperati, BSN, MHSA, CCM, managing consultant for Navigant Consulting, a consulting firm with headquarters in Chicago.

But it's more than just money, Hale points out.

In addition to increasing reimbursement, improved documentation will raise a hospital's case mix index, which, in turn, can improve the outcomes data used in public report cards used to measure performance by physicians and hospitals, Hale points out.

"Consumers are being told to check out their physicians and research a hospital they are considering at The accuracy of those report cards can be improved with a documentation enhancement program," she adds.

Facilities and physicians that appear to have higher mortality rates actually may not get credit for the severity of illness of their patients because of poor documentation, Hale says.

"Physicians have now become more aware that if they don't document using appropriate terms, they don't get credit for severity of illness. The report cards make it look like they are providing substandard care if the mortality rate is higher than expected," Hale says.

In addition to improving reimbursement, a documentation improvement program can have a positive impact on clinical outcomes and indicators and can help reduce denials for medical necessity because the patient's severity of illness is accurately reflected in the medical record, adds Lorraine Larrance, BSN, MHSA, CPHQ, CCM, manager with Pershing Yoakley & Associates, a Charlotte, NC, health care consulting firm.

"We have moved from focusing on documentation enhancement so that the hospital gets more reimbursement to improving documentation because the way the public perceives a hospital or a physician is largely based on what is in the medical records," Hale adds.

Accurately documenting a higher patient acuity also helps the physician justify a longer length of stay, Imperati says.

For instance, Medicare allows a 3.2-day length of stay for patients with simple pneumonia, DRG 90. If the physician documents that the patient has atrial fibrillation or another comorbid condition, the patient acuity increases and the DRG will bump up to DRG 89. This increases the length of stay for that same pneumonia patient to 4.6 days, Imperati says.

"Furthermore, if the physician determines and documents that the patient's pneumonia is due to aspiration of food or vomitus, the DRG bumps up even higher to DRG 79, which allows a 6.7-day length of stay," she adds. These conditions commonly occur in elderly patients and often are underdocumented, she says.

Documentation enhancement will be even more important when the Centers for Medicare & Medicaid Services (CMS) changes to the severity-adjusted DRG system for reimbursement in the fall, Hale points out.

CMS has announced a comprehensive revision of the DRG model to tie reimbursement more closely to the severity of the patient's condition and to base reimbursement on all-patient refined DRGs (APR-DRGs). Most severity-adjusted DRG methodologists split the current DRGs into multiple levels of severity.

"These changes will require more documentation and more accurate documentation in order for a hospital to receive the reimbursement it is entitled to," Hale says.

CMS has hired the Rand Corp. to evaluate the various severity-adjusted DRG systems being considered for implementation. A report is expected in early May at the latest with the severity-adjusted DRG system slated to go into effect in fiscal 2008 beginning Oct. 1, 2007, Hale adds.

Hospital leaders and coders are acutely aware of the fact that physicians do not always use the terminology that best describes the severity of illness, Hale says.

"If hospitals are to be paid an amount that accurately reflects the services they provide, someone must intervene with physicians to make sure they are documenting the right things, using the words recognized by the coding system," she says.

CMs in good position to help

Case managers in the acute care environment are in a good position to identify areas where documentation can be improved because of their clinical knowledge, their good relationship with physicians, and because their day-to-day activities already involve reviewing the medical record for medical necessity and continued stay documentation, Larrance says.

Documentation enhancement involves the critical clinical skills that case managers use every day, Larrance points out.

With some additional training on coding components and a very basic understanding of the Medicare prospective payment system and ICD-9 coding, case managers can help their hospitals capture the true picture of a patient's condition and treatment needs by working with physicians to make sure severity of illness is correctly documented in the patient record, she adds.

"Case managers are already in the chart, putting the clinical pieces together. With a basic level of coding information, they can team with the coders in the health information management department and facilitate the capture of information that the coders need," Larrance says.

Case managers often have an advantage over coding staff when it comes to approaching physicians with questions about documentation, points out Carol Eyer, RHIA, clinical compliance senior manager with Pershing Yoakley & Associates' Atlanta office.

"Case managers are ideally positioned to have a great impact on documentation improvement efforts. They are able to readily recognize clinical components of the patient's care as well as opportunities for clearer documentation that reflects true patient acuity, leads to appropriate coding compliance, and results in accurate reimbursement," Eyer says.

Case managers have access to the chart while the patient is still in-house and are able to meaningfully approach physicians as fellow clinicians with queries about the clinical picture, she adds.

"Physicians are accustomed to seeing the case managers on the floor. While they tend to raise barriers with coders' post-discharge queries, physicians are more accustomed to having these types of dialogue with case managers. There's a different dynamic there," she adds.

Having the case management staff involved in documentation enhancement gives the hospital the opportunity to capture the correct documentation in real-time before the patient is discharged, Larrance points out.

"In hospitals where there isn't a focus on DRG enhancement, coding tends to happen retrospectively. If there is someone on the floor, looking at the chart and taking the opportunity to clarify information with the physician, it can ensure that the highest level of documentation occurs while the patient is still in the hospital," Larrance says.

Hospitals want to drop the bills as soon as possible for financial reasons, Larrance points out; but bills can't be dropped until the coder completes the coding and that can't be done until the physician notes are complete.

"It all ties in with the revenue cycle, and when documentation enhancement is done retrospectively, you may end up with accounts that are not able to be billed at the severity level delivered," she says.

If the lack of appropriate documentation for an otherwise higher-paying DRG is discovered after the patient has been discharged, it's very challenging to get the necessary documentation in a timely and compliant manner, Eyer points out.

When there is retrospective question about documentation, coders must place a coding query on the discharged chart in the medical record department. The physician may respond to the query days or weeks later when completing other assigned chart deficiencies, Eyer says.

Coders must be careful not to lead or inappropriately prompt the physician to document conditions that are not supported in the medical record, she adds.

"It can't be documentation that just falls out of the sky. There has to be some evidence in the chart that offers a clinical indicator of something that is not clearly documented by the physician. There are huge advantages if clear documentation is entered while the patient is still in the hospital," Eyer says.

It's challenging to get physicians to review the charts of patients after discharge, she adds.

"Queries for post-discharge documentation are met with a cool reception — if not skepticism — and the physician has moved on to the next patient," Eyer says.

From a compliance standpoint, coders have to be cautious when coding from late entries made to the chart.

"Information added several weeks after discharge, the information may appear out of context, depending on supporting documentation or lack thereof, elsewhere in the chart. Auditors are savvy to this when they review charts," Eyer says.