Perhaps the most essential component of physician professionalism is the authority and autonomy to make a clinical diagnosis. As RACs, MACs, QIOs and other entities engage in the DRG Validation process, we have begun to see significant numbers of reversals of clinical diagnoses made by treating physicians. While part of the overall review process, these recent interventions warrant special attention.

Defining the DRG Validation Process

"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.(1)"

Coders typically code using encoding software. RAC auditors use similar software that looks back at claims to see if a case has been "maximized" inappropriately, leading to improper payment. Usually, denials can be based on "incorrect coding" in instances in which coders fail to follow established rules. For example, a patient presenting with acute respiratory failure secondary to an antidepressant overdose might be assigned the principal diagnosis of acute respiratory failure (DRG 189). Correct interpretation of coding rules, however, requires a principal diagnosis of poisoning by psychotropic agents, with the respiratory failure being an MCC. A RAC denial due to incorrect coding could result in a substantial financial "takeback" for the admission, as the DRG is reassigned.

This illustration is straightforward and consistent with the intent of CMS, which has provided procedural guidelines for reviewing entities. "The contractor shall base DRG validation upon accepted principles of coding practice, consistent with guidelines established for ICD-9-CM coding, the Uniform Hospital Discharge Data Set data element definitions, and coding clarifications issued by CMS. The contractor shall not change these guidelines or institute new coding requirements that do not conform to established coding rules.(2)"

We recently have seen increasing numbers of denials based on challenges made not to coding practices, but rather to the accuracy of the underlying diagnosis. Such reviews appear to be authorized under the definition of a DRG validation (supra), which states in part that "the purpose of the DRG validation is to ensure that [coding] matches both the attending physician's description and the information contained in the beneficiary's medical record."

Reviewing entities are capitalizing on perceived inconsistencies between the physicians' descriptions (diagnoses) and other information in the medical record.

The Coding Process

Coders assign and sequence ICD-9-CM codes based on documentation of diagnoses and procedures by treating providers using official coding guidelines published by the National Center for Health Statistics and also found in Coding Clinic, published by American Hospital Association.

CMS directs reviewing entities to ensure that coding guidelines are followed: "the contractor shall determine whether the principal diagnosis listed on the claim is the diagnosis which, after study, is determined to have occasioned the beneficiary's admission to the hospital. The principal diagnosis (as evidenced by the physician's entries in the beneficiary's medical record; see 42 CFR 412.46) must match the principal diagnosis reported on the claim form.(3)"

One QIO recently denied a case coded off a physician's diagnosis of pathologic fracture. The physician had stated (and the QIO quoted):  "her fracture was because of her fall, but she definitely has osteoporosis, which made the fracture more likely to happen and more difficult to fix." The QIO's response was: "the physician reviewer stated the patient likely has some degree of osteoporosis; post-menopausal female taking Boniva and calcium supplements. However, the fracture would not have occurred had the patient not fallen over curbing. Thus the fracture is traumatic, not pathologic."

(1) CMS Manual System, Department of Health & Human Services (DHHS), Pub 100-08 Medicare Program Integrity

Centers for Medicare & Medicaid Services (CMS),Transmittal 264, Date: AUGUST 7, 2008, Change Request 5849, p21

(2) Department of Health &CMS Manual System Human Services (DHHS) Pub. 100-10 Medicare Quality Centers for Medicare & Improvement Organizations Medicaid Services (CMS)

Transmittal 2 Date: July 11, 2003, p22

(3) as above, page 22