Guest Post, Part 1: Where do we stand with clinical validation?

By Richard Pinson, MD, FACP, CCS, and Cynthia Tang, RHIA, CCS

The 2017 Official Guidelines for Coding and Reporting, effective October 1, 2016, contained a new, perplexing, and problematic section I.A.19 titled “Code Assignment and Clinical Criteria,” which states:

“The assignment of a diagnosis code is based on the provider’s diagnostic statement that the condition exists.  The provider’s statement that the patient has a particular condition is sufficient. Code assignment is not based on clinical criteria used by the provider to establish the diagnosis.”

This has been incorrectly interpreted by some to mean that clinical validation of documented conditions is no longer required for code assignment on claims.

In fact, CMS requires that claims submitted for payment must not include diagnoses that cannot be “clinically validated.” So what is clinical validation? These types of reviews examine information in the medical record to determine whether the patient truly had the conditions documented, by applying diagnostic standards (clinical criteria) widely-accepted by the medical community.

What is widely-accepted may be debatable, but CMS expects that, at the very least, a reasonable physician would agree with the diagnosis based on the findings and treatment documented in the medical record. Many professional organizations and societies have published consensus diagnostic criteria or guidelines which are authoritative widely-accepted sources. If a provider makes a diagnosis which is not supported by such an authoritative source, he/she will need to explain the basis of that diagnosis; if not the diagnosis may not be considered clinically valid.

An example of an authoritative diagnostic standard is the National Kidney Foundation’s Kidney Disease: Improving Global Outcomes (KDIGO) guideline for acute kidney injury and another one for chronic kidney disease. The Surviving Sepsis Campaign together with the Third International Sepsis Definition Conference of 2016 have established the current diagnostic standards for sepsis, severe sepsis, and septic shock (Sepsis-3). The authoritative source for the diagnostic criteria of acute pancreatitis is the American College of Gastroenterology.

The main reason for the confusion and controversy over clinical validation is the fact that the coding function and the process of claims submission are actually governed by different sets of statutory and regulatory law. Coding is now governed primarily by the ICD-10-CM/PCS, the Official Guidelines for Coding and Reporting for both of the classifications, and the Affordable Care Act. the American Hospital Association’s Coding Clinic does not have statutory or regulatory authority but is designated by CMS as the official source of interpretation, clarification, and application of the classifications and Guidelines. The classifications and Guidelines always take precedence over Coding Clinic advice.

On the other hand, clinical validation is a statutory and regulatory necessity. Claim submission and reimbursement are governed by CMS regulations and policy manuals including the Recovery Auditor Statement of Work which requires clinical validation of diagnoses on submitted claims. Everyone is aware that clinical validity is a primary focus of the Medicare RA and commercial recovery contractors, and clinical validation is a frequent reason for payment reductions and outright denials.

Finally, the False Claims Act of 1863 imposes penalties (potentially “triple damages”) for the submission of claims to the United States government for goods or services not actually rendered. Today, the law is applied to healthcare claims, including cases where codes for conditions patients actually did not have (i.e., unsubstantiated by accepted clinical criteria) are assigned by any provider with actual knowledge (including deliberate ignorance or reckless disregard) that the claim was false, if doing so increases reimbursement or has a positive impact on quality analytics that now also affect reimbursement.

Editor’s note: This article was originally published by Pinson & Tang, a CDI consulting company based in Houston, Texas. To visit their website, click here. In Part 2, the authors will further discuss implications of clinical validation reviews for CDI professionals. Click here to read a White Paper from the ACDIS Advisory Board on the matter.