Key Role of Coder in Denial Management

Coders are the backbone of an organization’s fiscal health. Timely coding contributes to timely hospital revenue and cash flow, both of which are essential for a hospital to function. However, coders must be willing to look beyond their traditional roles and examine how they can help ensure the continued financial viability and financial success of the organization.

We are all undoubtedly familiar with third-party auditors and payers that are scrutinizing our claims more than ever. These oversight contractors are required to identify improper payments and either recoup those payments or prevent payments entirely. Coders typically have access to the complete medical record. Thus, they possess a bird’s eye view of the patient encounter. The hospital revenue cycle spans from the time the patient registers at the facility to the time he or she is discharged and beyond until the facility collects any balances, and the account is closed. This means that coders are in an ideal position to identify areas for process improvement that can help avoid denials.

Most hospitals address denials retrospectively with very little emphasis on the factors that lead to those denials. As a result, they repeatedly experience the same types of denials.

The Medicare Fee-for-Service Improper Payment Report includes the following five categories of common denials:

  • No Documentation: This occurs when the provider fails to respond to repeated requests for the medical records or the provider responds that he or she doesn’t possess the requested documentation.
  • Insufficient documentation: This occurs when documentation is inadequate to support payment for the services billed or when a specifically required documentation element is missing, such as a physician signature on an order or a form that providers must complete in its entirety.
  • Medical necessity: This occurs when documentation indicates that services billed were not medically necessary based upon Medicare coverage policies.
  • Incorrect coding:
    Occurs when documentation indicates the following:

    1. A different code should have been assigned
    2. Someone other than the billing provider or supplier actually performed the service
    3. The billed service was unbundled inappropriately
    4. The beneficiary was discharged to a site other than the one coded on the claim
  • Other errors: Includes claims that don’t fit into any of the other categories (e.g., duplicate payment error, non-covered or unallowable service).

Denials related to incorrect coding may be easier for coders to address because they play a direct role in ensuring accurate code assignment. However, denials related to insufficient documentation, no documentation, and medical necessity are more complicated because others (e.g., providers) must be involved in improving the process. In the 2011 Statement of Work for the Recovery Audit Program, CMS distinguishes between DRG and clinical validation. More specifically, the agency provides the following clarification.

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. This type of review shall be performed by a certified coder. For DRG Validations, certified coders shall ensure they are not looking beyond what is documented by the physician, and are not making determinations that are not consistent with the guidance in Coding Clinic.

Clinical validation is a separate process, which involves a clinical review of the case to see whether or not the patient truly possesses the conditions that were documented. Clinical validation is beyond the scope of DRG (coding) validation, and the skills of a certified coder. This type of review can only be performed by a clinician or may be performed by a clinician with approved coding credentials.

What does all of this mean for coders? Although coders can’t clinically validate a condition, they can identify insufficient documentation, such as:

  • Missing progress notes
  • Progress notes that include dates of service for which there is no assessment and plan
  • Conflicting clinical documentation
  • Nurses’ notes that fail to substantiate physician diagnostic conclusion statements
  • Clinical results and documentation that fail to substantiate physician diagnostic conclusion statements
  • Clinical documentation that simply precludes the accurate assignment of principal and secondary diagnoses

Coders can also play a role in ensuring medical necessity. Auditors validate medical necessity by closely examining physician documentation of a concise and detailed history of present illness that reflects patients’ severity and acuity. A well-documented assessment and plan of care must support this severity and acuity as well.

When coders identify and sequence principal diagnoses, they drive the DRG that determines—or invalidates—medical necessity. Auditors and payers focus on the medical necessity of short-stays (i.e., inpatient stays that typically last three or fewer days), and coders may want to do the same. In general, coders must ensure that the principal diagnosis reflects the reason why—after study—the patient is admitted to the facility, particularly when two concomitant and co-existing diagnoses both meet the definition.

Chart selection for review centers around principal diagnosis selection and resulting DRG assignment in acute care short stays defined as inpatient stays typically three days or less. Coders need to focus on ensuring that the clinical condition selected truly reflects and meets the official coding guidelines of the principal diagnosis when concomitant, “co-existing” principal diagnoses exist.

Coders unequivocally play a key role in denials avoidance, and they are best suited to proactively identify process deficiencies. Coders who don’t look for ways to improve the overall process will only continue to perpetuate retrospective and on-going denials. It’s time for coders to step up to the plate and reduce denials.

Medical Billers and Coders (MBC) is one of the leading medical billing service providers. With our 15+ years of experience in the medical billing domain and with our proven medical billing services, many surgical centers across the country have overcome denials and underpayments. Our billing professionals not only specialize in coding and billing but also incorporate the knowledge throughout the process. To know more about our medical billing services you can contact us at 888-357-3226/