ICD-10 is the largest mandate in U.S. healthcare history, and it will require diligent, comprehensive actions to be fully prepared for the transition. This is the fourth post in a four-part series that explores successful strategies in key areas of ICD-10 readiness: general approach, governance, education and standardization of documentation.
“The pen is mightier than the sword,” is a famous line from Edward Bulwer-Lytton’s 1839 play, The Conspiracy. Fast-forward nearly two centuries, we substitute the keyboard for the pen, and the idea is nonetheless the same; documentation is the quintessential element that translates one’s thoughts and actions into a durable record of key events in health care.
Unfortunately, the lack of uniform documentation is the Achilles’ heel for ICD-10 readiness across the entire industry.
Concise, thorough and comprehensive documentation is not only essential, but it is the required basis for not only ICD-10, but for value-based purchasing, bundled payments, pay for outcomes and managing episodes of care. Without solid documentation, hospitals and physicians alike will soon find themselves challenged to validate their work, which could lead to undervalued or denied payments.
Lack of consistency in documentation takes on many forms. It can be a hospital that allows its clinicians to document both on paper and in an electronic medical record. Or it can manifest itself as relying on free text or dictated notes that do not follow a consistent format. But perhaps the biggest challenge facing hospitals and physicians alike is not providing the level of detail needed to justify selecting high-value codes.
Good documentation is essential to surviving costly audits
The Centers for Medicare and Medicaid (CMS) is well aware of this challenge. In 2006, CMS instituted Recovery Audit Program (RAC) audits for the sole purpose of seeking to recoup Medicare and Social Security overpayments. To put this into perspective, the 2013 CMS Report to Congress noted that the Medicare Fee for Service (FFS) Recovery Audit Program returned more than $3 billion to the Medicare Trust Fund.
When looking at audit triggers and providers’ costs, hospitals note that medical necessity denials accounted for 96% of costly complex denials. Managing these audits can be expensive; 63% of all hospitals reported spending more than $10,000 managing the RAC process during the fourth quarter of 2012; 43% spent more than $25,000 and 13% spent over $100,000.
While hospitals were able to overturn about two-thirds of appealed denials, only 40% of hospital denials went to appeal. While there is less published data regarding physician practices, it would not be surprising to see similar numbers for this segment of the medical community.
Standardization returns significant value
Clearly documentation cannot, by itself, address all these woes, but coupled with strong governance and training on how to do effective documentation offers the best solution to avoiding these financial penalties. Wide variation in physician documentation processes within an organization, department or service can complicate coding, prolong billing cycles and inhibit effective communication across providers and with the patient.
Perhaps most disturbing are the potential clinical effects of poor documentation. In a 2013 study that examined the financial impact of CDI, there are significant increases in length of stay, cost of care and readmissions when documentation falls short of expectation for consistency and content.
Since launching our consulting service to hospitals and physician practices, only those organizations that have invested time and resources in governance, education and documentation are ready to move into ICD-10 pre go-live activities, such as testing and dual coding.
ICD-10 readiness is a journey, but unless the fundamentals are in place, moving toward an October 1 launch is an uphill journey on a very steep slope. Contact us if you’d like to learn more about how Allscripts can help.