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Does Your CDI Program Expose to Compliance Risk?

December 30, 2017

Reality of Clinical Documentation Improvement- Compliance Risk


CDI programs have strong potential to significantly raise compliance risks for the hospital or health system in which the program operates. Compliance departments strive to minimize and alleviate the numerous risks associated with the myriad of components associated with and fundamental to the delivery of healthcare. Clinical documentation improvement initiatives can work in tandem, align and collaborate with the compliance department’s goals and objectives, supporting overall efforts to minimize this risk while still achieving optimal enhancement of documentation accuracy, completeness and overall sustainable long-term effectiveness.


The Business of Compliance


Healthcare compliance is the process of following rules, regulations, and laws that relate to healthcare practice. There exists countless number of CMS laws, regulations, policies and mandates particular to and governing coding, billing and reimbursement for healthcare care services, not to mention all other third-party payers with their own distinct set of laws, regulations, policies and mandates. Let’s take a close look at some of the most pertinent CMS regulations and policies cited in the OIG’s Compliance Review of past hospitals when reporting on the results of a hospital’s

compliance with Medicare billing requirements.  


Medicare Requirements for Hospital Claims and Payments


  • Medicare payments may not be made for items or services that "are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member" (the Social Security Act (the Act), § 1862(a)(l}(A)).


  •  No payment shall be made to any provider of services or other person under this part unless there has been furnished such information as may be necessary in order to determine the amounts due such provider or other person under this part for the period with respect to which the amounts are being paid or for any prior period. the Social Security Act (the Act), § 1833


  • Federal regulations state that the provider must furnish to the Medicare contractor sufficient information to determine whether payment is due and the amount of the payment (42 CFR § 424.S(a}(6}}.


  • The Medicare Claims Processing Manual (the Manual}, Pub. No. 100-04, chapter 1, §, requires providers to complete claims accurately so that Medicare contractors may process them correctly and promptly.


  • Medicare contractors shall utilize the medical record to determine whether procedures and diagnoses were coded correctly. If the medical record supports that they were, pay the claim as billed. If the medical record supports that they were not, then utilize ICD-10-CM coding guidelines to adjust the claim and pay at the appropriate DRG. The Medicare Program Integrity Manual, chapter 6.5.

  • The contractor shall perform DRG validation on PPS, as appropriate, reviewing the medical record for medical necessity and DRG validation.  The purpose of DRG validation is to ensure that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician's description and the information contained in the beneficiary's medical record.  Reviewers shall validate principal diagnosis, secondary diagnoses, and procedures affecting or potentially affecting the DRG.  The Medicare Program Integrity Manual, chapter 6.5.3.


Medicare, its contractors and the OIG utilize advanced data analytics, data mining and claims matching to identify potentially aberrant patterns of coding and billing as an integral part of a Medical Review program to insure appropriate payment of claims and protection of the Medicare Trust Fund. This is a critical element of hospital compliance that clinical documentation improvement specialists, CDI leadership and the C-suite of hospitals lack understanding and appreciation for in the quest to increase reimbursement through reimbursement optimization and the deployment of clinical documentation improvement programs. Further adding to and complicating the compliance risk of hospitals is CDI consulting companies pushing hospital CDI specialists to become more aggressive in querying for high weighted DRGs such as DRG 871- Sepsis with MCC and DRG 177- Complicated Pneumonia with MCC. This is a lesson in futility with all third-party payers focusing upon high weighted DRGs to refute the diagnoses used in assigning the DRG and cost containment. I have personally experienced a colleague