Clinical validation reviews defense against denials

Historically, organizations—primarily hospitals—tended to focus on diagnosis-related group (DRG) validation and limit their clinical validation to utilization review efforts, says Cheryl Ericson, MS, RN, CCDS, CDIP, CDI education director at HCPro in Danvers, Massachusetts, who spoke during the “Defining the Role of CDI Through Clinical Validation” webinar earlier this year.

But the Social Security Act requires CMS to protect the Medicare Trust Fund against inappropriate payments. To do so, it hires contractors to perform not only DRG reviews but clinical validation as well. And these contractors are getting more adept at performing such reviews and identifying errors.

The CDI specialist’s role is changing. It’s no longer enough to query for diagnoses and report corresponding codes. The diagnosis must be backed up by clinical indicators and thorough documentation—or it risks being overturned by an auditing agency. Organizations have a lot of revenue at risk, and incorporating clinical validation into CDI efforts can be the first line of defense.

Let’s talk about the differences between DRG and clinical validation.

DRG validation

DRG validation is the process of reviewing physician documentation and determining whether the correct codes and sequencing were applied to the billing of the claim on prospective payment services (PPS), and, as appropriate, reviewing the record’s DRG accuracy. Contractors perform DRG, or coding, validations using certified coders. The contractors base DRG validation on:

• Accepted principles of coding practice, consistent with Official Guidelines for Coding and Reporting DRG validation is the process of reviewing physician documentation and determining whether the correct codes and sequencing were applied to the billing of the claim.
• The Uniform Hospital Discharge Data Set (UHDDS) data element definitions
• Coding clarifications issued by CMS

When performing a DRG validation, the contractor also determines whether the primary diagnosis listed on the claim is the diagnosis that, after study, is determined to have occasioned the beneficiary’s admission to the hospital (as required by the UHDDS). The principal diagnosis, as evidenced by the physician’s entries in the beneficiary’s medical record, must match the reported principal diagnosis. The principal diagnosis should be coded to the highest level of specificity.

Auditors can deny an item or service if it does not meet any of the conditions listed below:

•  The item or service does not fall into a Medicare benefit category
• The item or service is statutorily excluded
• The item or service is not reasonable and necessary
• The item or service does not meet other Medicare program requirements for payment

Clinical validation

When performing clinical validation, the contractor determines whether the beneficiary required an inpatient level of care, whether the patient truly possessed the conditions documented in the medical record, and whether such care was medically necessary, reasonable, and appropriate. The beneficiary must have demonstrated signs or symptoms severe enough to warrant inpatient medical care, and he or she must have received services of such intensity.

During clinical validation reviews, the reviewer considers preexisting medical problems and extenuating circumstances that make admission of the beneficiary medically necessary. Factors existing solely out of convenience to the beneficiary or family (such as admitting an elderly patient because the family is taking a weekend getaway) do not, by themselves, justify inpatient admission.

The medical necessity of a claim supersedes the DRG validation—if the service was not supported by the medical record, the applicable codes are irrelevant.

Then, the reviewer determines whether procedures and diagnoses were coded and sequenced correctly. If the medical record supports the coding, the claim will be paid and billed. If the medical record does not support the coding, the reviewer will use coding guidelines to adjust the claim and pay at the appropriate DRG.

The contractor may determine that the beneficiary did not require an inpatient level of care on admission, but that the beneficiary’s condition changed during the stay and inpatient care became medically necessary (at a later point during the stay). They review the cases in accordance with the following procedures:

The first day on which inpatient care is determined to be medically necessary is deemed to be the date of admission

The diagnosis determined to be chiefly responsible for the beneficiary’s need for covered services on the deemed date of admission is the principal diagnosis

The claim is adjusted according to the diagnosis that made inpatient care medically necessary.

Claims are denied in full when the contractor determines the beneficiary did not require an inpatient level of care at any time during the admission. If the medical record does not support the coding, the claim is denied. Hospitals have the opportunity to appeal claim denials.

Create defensible claims

CDI specialists at Catholic Health Services of Long Island, a six-hospital network, perform both types of reviews ahead of government contractors’ efforts, says Adelaide La Rosa, RN, BSN, CCDS, its corporate director of HIM, CDI, and clinical data management. The team looks through the record for accuracy of:

• Level of acuity
• Severity of illness
• Clinical indicators
• Utilization of resources

During the DRG validation review, the CDI specialists work with the coders to ensure all diagnosis and procedure codes are supported by documentation in the medical record, resulting in appropriate DRG assignment prior to bill drop.

In the clinical validation review, CDI specialists look for clinical indicators that support the diagnosis and procedure. They generate queries when a diagnosis or procedure is not supported in the medical record and, once again, make sure proper codes have been assigned.

The chief medical officers (CMO) at Catholic Health Services support the CDI team, acting as physician champions and keeping the medical staff at each facility engaged in the CDI program and compliant with CDI requests. Their support was the first step in expanding to more complex reviews, La Rosa says, adding that the CMOs review charts, outstanding physician query reports, and quality metrics with the CDI team on a weekly basis. In addition, the CDI directors can request impromptu meetings with their CMO counterparts.

While many programs may not have the level of support that La Rosa’s does, everyone can rally physician support by exploring how such efforts positively affect the physicians themselves and adjusting query efforts with that in mind. In fact, clinical validation–focused reviews also help with pay-for-performance and quality measures, she suggests.

If a claim gets denied, La Rosa says her team “RACs them back,” appealing as many times as necessary. The staff performs a second clinical validation review following any denial, engaging the physician(s) involved in the original record documentation to review the contents and identify any shortcomings. The team also performs an additional DRG validation review, engaging the coding experts for extra insight. The CDI staff gather as much supporting documentation as possible, such as progress notes and reports, and return the compilation to the auditing body. (Read the related article below for a brief description of one such case successfully overturned at Catholic Health Services.)

Appeals take time—sometimes up to a year—before a final decision is made. CDI departments must stay strong and learn from denials, La Rosa says. Foundationally, CDI specialists should ensure the clinical indicators support the principal and secondary diagnoses and procedures before the claim is submitted. They should be confident that the documentation provided supports the billing. If a claim is denied, La Rosa suggests meeting as a team to review and decide how to respond. Sometimes that means learning from mistakes, but overall it will help facilities defend future claims and prevent costly denials.