How it all plays out: See how coding affects reimbursement

Case studies illustrate the importance of accuracy

Accurate documentation always has been important but it can have an even bigger impact on reimbursement with the new MS-DRG system, according to Deborah Hale, CSS, president of Administrative Consultant Services Inc., a health care consulting firm based in Shawnee, OK.

"With MS-DRGs, proper coding of a secondary diagnosis can affect the DRG assignment and have a tremendous impact on reimbursement in ways that it did not in the past. Coders must base their coding only on what the physician documented. They cannot look at diagnostic tests or other information in the record to determine more specific terminology," Hale says.

Here are three case studies on how proper coding can affect reimbursement. The data were calculated using a hypothetical hospital with a hospital-specific reimbursement rate of $5,500.

• Chronic kidney disease as a secondary diagnosis

In the past, stages 1-5 of chronic kidney disease were treated as CCs. Under the MS-DRG system, only stages 4 and 5 count as CCs.

If the physician documents with the terms "end-stage chronic kidney disease" or "end-stage renal disease," it is considered an MCC.

The stage of chronic kidney disease now is determined by the glomerular filtration rate (GFR) and a CC is present only in patients who are progressing toward a transplant or dialysis and have a GFR of 29 or below, Hale says.

"If the physicians are not quickly calculating the GFR, it could be a great documentation improvement initiative to make sure the physician is using the right terms," she says.

If a physician says "chronic renal insufficiency" or "chronic renal failure," it doesn't count as a CC, she adds.

She cites a case in which a patient's principal diagnosis was a cerebrovascular accident with a secondary diagnosis of chronic kidney disease. If the physician documents "renal insufficiency," the diagnosis falls under MS-DRG 66, intracranial hemorrhage or cerebral infarction without a CC or MCC, which for the hypothetical hospital has a relative weight of 1.0303.

If the physician documents "chronic kidney disease, stage 4," it bumps the case up to MS-DRG 65, intracranial hemorrhage or cerebral infarction with a CC, which increases the relative weight to 1.1901 and increases reimbursement by $878.52.

• Congestive heart failure as a secondary diagnosis

In order for congestive heart failure to count as a CC or MCC, the physician must document whether heart failure is acute and if it is systolic or diastolic. If the record says "heart failure" or "congestive heart failure," the condition cannot be coded as a CC.

Here's how it can make a difference:

Simple pneumonia with congestive heart failure falls into MS-DRG 195 with a reimbursement for the hypothetical hospital of $4,619. Simple pneumonia with chronic diastolic congestive heart failure is MS-DRG 194 with a reimbursement of $5,629 but if the secondary diagnosis is acute diastolic congestive heart failure, the case falls into MS-DRG 193, with a reimbursement of $6,878.

Under the old system, all three scenarios were DRG 89 with a reimbursement of $5,707.

• Secondary diagnoses for major small/large bowel procedures

Reimbursement for MS-DRG 331, major small/large bowel procedures without a CC or MCC (DRG 331), is $10,129 for the hospital. If a CC is documented (MS-DRG 330), the reimbursement is $15,916. On the other hand, DRG 329, major small/large bowel procedure with an MCC, carries a reimbursement of $24,784.