On October 1, 2016, the Centers for Medicare and Medicaid Services (CMS) wrapped up its one-year grace period for allowing the use of unspecified codes without consequence. The governing body also rolled out its first update to the coding system in four years, including a mammoth 6,000 new codes.
Both of these moves could negatively impact financial performance if appropriate action is not taken to minimize risk. Providers still engaging in deficient “unspecified” coding practices face short-term revenue cycle exposure in the way of denied claims, increased accounts receivable days, and time-consuming workflows associated with drafting appeals. Over the long term, revenue risk is associated with lower value-based payments.
Specificity is now the name of the game, and HIM departments must educate teams to code at the highest level under ICD-10. With thousands of new codes in play, it’s imperative that healthcare organizations address this issue through three critical steps:
1) Assess use of unspecified codes and determine financial exposure
Knowledge is power when it comes to managing risk. Healthcare organizations must first understand how unspecified codes are used and the resulting financial implications to determine next steps.
For example, consider the DRG shift for major depressive disorder. If documentation supports only the choice for an unspecified code (F32.9), the reimbursement is $3,921, as opposed to $5,723 for the more specific code F32.3, major depressive disorder, single episode, severe with psychotic features. When calculated for a US 14-site hospital system, this loss equated to a $3 million loss over a one-year period for this DRG shift alone.
Healthcare organizations can improve the outlook by educating staff on potential DRG and HCC impacts as well as negative impacts to case mix index. Also, a number of codes are now deemed inappropriate and should not be used at all. A list of these can be found here.
