Clinical Documentation and Coding Top Revenue Cycle Vulnerability

Image shows clinical documentation and coding is the top area at risk of lost or decreased revenue, according to most hospital leaders.

Hospitals are concerned their clinical documentation and coding processes are resulting in lost or decreased revenue, a new survey shows.

Hospital leaders are concerned that their organization’s clinical documentation and coding processes are vulnerable to errors that could result in lost or decreased revenue, according to a recent survey.

Consulting firm and technology vendor BESLER recently partnered with HIMSS Media to identify the greatest industry challenges and potential opportunities for revenue cycle improvement. They surveyed over 100 leaders within finance, revenue cycle, reimbursement, and health information management (HIM) departments at hospitals and acute-care facilities in October 2018.

The recently released survey results showed that 84 percent of respondents believe clinical documentation and coding are high or medium revenue cycle risk.

Hospital finance leaders were the most adamant that clinical documentation and coding presented significant revenue cycle challenges. Almost one-half of finance leaders chose clinical documentation and coding as their greatest revenue cycle vulnerability.

Although, the area was considered high or medium risk by over one-third of revenue cycle, reimbursement, and HIM leaders as well.

Clinical documentation and coding are creating revenue cycle vulnerabilities because solutions are not optimized for the diagnosis-related group (DRG) payment system, respondents shared. Only about one-third of hospital leaders said DRG optimization is a solved problem. In other words, the majority of hospital leaders (68 percent) do not think their solutions are equipped to manage DRG coding.

The DRG payment system has been around for over three decades. And major payers, including Medicare, use the payment system to determine lump-sum payments for hospitals that treat specific diagnoses.

While the payment system is not new, it is constantly evolving. Payers are attempting to get more specific about diagnoses to ensure hospitals are paid accurately for treating patients with certain conditions. The introduction of ICD-10 in 2015 is a prime example of how the industry has changed the DRG payment system.

But DRG changes are not ideal for providers. Hospitals find it difficult to follow and comply with constant DRG changes, and as a result, DRG coding accuracy has decreased. The report stated that the national benchmark for DRG assignment fell from 95 percent under ICD-9 to 72 percent in 2018.

Revenue cycle solutions, however, are optimized for inpatient coding and audits. Approximately 72 percent of respondents felt their technology is optimized for inpatient coding.

The survey also uncovered that respondents thought the accuracy of inpatient coding at their organizations was about the same as the industry benchmark.

Additionally, the majority of respondents (72 percent) agreed that their revenue cycle solutions are optimized for outpatient coding.

Opportunities to improve revenue cycle management technology remain. And poor coding integrity could result in the top two challenges hospitals face: claim denials (49 percent of respondents) and inaccurate reimbursements (47 percent of respondents).

Image shows claim denials and inaccurate reimbursements are the top two revenue cycle challenges, according to most hospital leaders.

Source: BESLER and HIMSS Media

However, hospitals and health systems face significant obstacles with improving their mid-revenue cycle processes, including DRG coding and documentation. Chief among the challenges is a lack of budget. Nearly one-half of hospital leaders (49 percent) said budget constraints prevented their organization from improving DRG coding and documentation.

Nearly the same percentage of leaders also felt return on investment (ROI) was an obstacle. Forty-eight percent of respondents said difficulty proving ROI from investment stopped their organization from executing DRG optimization efforts.

Other obstacles to improving the mid-revenue cycle included:

  • Competing projects (45 percent)
  • Lack of staff/headcount to manage improvement efforts (38 percent)
  • Lack of familiarly with solutions to address challenges (34 percent)
  • Existing solutions already widely entrenched or accepted (32 percent)
  • Overcoming internal perceptions that there is no need for improvement (30 percent)

Respondents identified a variety of challenges, but the survey also found a potential solution for hospitals and acute-care facilities. The survey showed that nearly half of respondents (47 percent) have created a revenue integrity program, which ensures organizations are being fully compliant with coding and billing practices while also achieving operational efficiency and legitimate reimbursement.

That means about 53 percent of hospitals still haven’t implemented a revenue integrity program.

About three-quarters of hospitals with revenue integrity programs reported improvements in net collections, increases in gross revenue capture, and/or reduction in compliance risk.


ICD-10 turns 1: Was it so bad?

R51: headache. Gearing up for the switch from ICD-9 to ICD-10 last October, many providers expected nothing but headaches. The new system increased the number of diagnostic codes from around 13,000 to about 68,000, requiring clinicians to sift through highly specified conditions — and some unusual ones, such as W61-62XD: struck by duck.

But after a year of using the ICD-10 — and the impending end of a one-year grace period that ensured providers wouldn’t be denied Medicare Part B claims as long as they used a code from the correct family — most physicians say the implementation process went better than expected.

“The fear that this was really going to impact us financially because of the potential inability to process the new codes really never transpired,” says Michael Munger, a family physician with Saint Luke’s Medical Group in Overland Park, KS, and president-elect of the American Academy of Family Physicians.

In fact, the error rate for claims tracked by the AAFP was the same this year as it was for ICD-9 — 10%. The fact that commercial insurers didn’t have the grace period bodes well for the loss of flexibilities, since doctors should be used to being more specified in their claims.

Top 8 challenges physicians face

Physician Challenges

Click to access HC_IssueBrief-PhysicianPressurePoints_TL_0316v2.pdf


Providers See Only Minor Productivity Declines After ICD-10 Implementation

ICD-10 (1)

Beyond productivity, 20% of survey respondents said revenue disruption was their top concern. However, 60% of organizations did not see any impact on monthly revenue following the transition.

What healthcare executives should know about ICD-10

ICD 10

Despite efforts by critics to stave off the transition to the ICD-10 coding system, the mandated October 1, 2015 deadline became a near certainty when the American Medical Association (AMA) signaled a cooperative arrangement with the Centers for Medicare and Medicaid Services (CMS) in early July to assist practitioners in making the switch.

Why even the most prepared providers aren’t ready for ICD-10


After being delayed in 2009, 2012 and 2014, the nation’s switch to ICD-10 is once again slated to occur this October. Although the industry has had years to prepare, the negative effects of the switch may be felt by all providers, even those that believe they are fully ready for the new coding system

Combatting 3 Big Revenue Cycle Challenges

Cash Hospital

A Cone Health revenue cycle executive shares strategies for reducing the health system’s three biggest revenue threats: high-deductible health plans, uninformed patients, and the looming implementation of ICD-10.