September 21, 2016

Hospital Alleges Third-Party Auditors Not Following Federal Guidelines

By


James Jones, MD

The irony is stupefying. One of America’s oldest teaching hospitals is spending in excess of $1 million annually to defend itself from third-party auditing vendors that refuse to follow federal coding guidelines.

That is what is happening currently at Mount Sinai Health System in New York City, where the embattled organization receives approximately 200 to 250 audits monthly from healthcare payers. Unfortunately, the win rate for the venerable teaching facility, founded in 1852, is only 20 percent, according to James Jones, MD, the system’s vice president of administration and its senior medical director of clinical documentation quality and improvement (CDQI). 

Jones estimates that when considering the full life cycle of an audit, from beginning to end, his group is handling approximately 2,000 audits at any given time. 

Defending against this onslaught of audits is such a massive undertaking that the system had to create a finance department to focus solely on this issue. The system’s line of defense consists of DRG validators and physician advisors working all year on the process. 

“Every chart is coded internally, reviewed by a DRG validator, (and) processed by electronic audit flags,” Jones explained to RACmonitor. “Cases (that are) flagged get reviewed by physician advisors, again by a validator, and then sent out to payers.” 

Compounding the process, while adding even more cost to the defense budget, is that most payers don’t have secured electronic processes, which means that Mount Sinai has to print, scan, and then mail records to the payers, Jones added. 

“As you can imagine, a medical chart can be up to 300 pages,” he said. “This comes at a significant cost to hospitals.” 

Jones said that when Mount Sinai does hear back from the payer regarding a DRG change “DRG denial,” they then perform an internal review again with a DRG validator and a medical director of DRG validation.  

“We have physicians respond to each appeal with a letter explaining the clinical picture and why it is coded correctly,” Jones said. “At a time when healthcare costs are increasing, it amazes me how much hospitals have to (spend) just to translate the true clinical picture into codes.” 

Jones said that every case the system appeals has been vetted by more than four DRG validators and two physician advisors before the appeal process even begins. 

When asked about the "cycle" of one of these audits, Jones went on to explain. 

“A patient is discharged (and the record) coded through above process,” he said. “(The record is) sent to (the) payer, and most payers have up to two years to request charts). They will request a group at a time – we will then send charts (and) can hear back 30 to 90 days later.” 

Jones said the system’s DRG denial team will review, and if it agrees with the original coding, they will appeal. He said that usually they get the appeal processed in one to two weeks, noting that the system usually hears back within 60 to 90 days. 

“If still denied, we will do a second appeal,” Jones added.

“We are very confident that our coded episode of care is the true clinical picture of our population,” he said. “What we find is that third-party vendors working for payers don’t follow federal coding guidelines.” 

For example, according to Jones, in some instances a physician taking care of a patient will document sepsis, and the patient will have the clinical indicators.

“The vendor will overrule the patient’s doctor and respond by saying this is not ‘sepsis’ but related to a local infection,” Jones explained. “As a provider, this is very upsetting. The only person who really knows what a patient has is the provider, with face-to-face interaction with a patient. This, in my opinion, is very clear in the coding guidelines.” 

According to Jones, the uptick in the number of DRG denials began within the last 18 to 24 months, during which time the coding targets of preference were obstetric cases, acute respiratory failure, and the long-disputed sepsis diagnosis. When asked how clinical criteria for these specific conditions are cited, Jones said they are developing policies regarding the most common secondary diagnoses. 

“With world-renowned clinical leaders throughout the health system, and using coding guidelines,” Jones said, “we hope to have a full dictionary over the next year or so.” 

Jones said a case last week marks a good example of where the decision made by the auditor is clearly wrong.

“(A) patient had a history of a temporary trach (tracheostomy) nearly one year earlier, which had been allowed to close,” Jones explained, noting that the trach had been for airway maintenance following complex facial surgery for central mucoepidermoid carcinoma of jaw (mandibular Ca.) 

“This admission was for further reconstruction, and a temporary trach was again performed over the same site,” Jones said. “(The) payer thinks this is a revision of a trach since it was performed at same site. How can a surgeon revise an ostomy that did not exist?” 

In another example of where so-called guidelines were used instead of real medical judgment, Jones described the case of a patient who had prolonged labor requiring a cesarean section (c- section). Jones said the provider sent the placenta to pathology and treated the patient with prophylactic antibiotics for possible chorioamnioitis. 

“(The patient) ended up needing a c-section,” said Jones. “The amniotic fluid was clear and cultures negative, so antibiotic was (discontinued and the) patient did fine.” 

Jones went onto explain that the uterus was sent for pathology and the report was positive for chorioamniotis. 

“This is the confirmatory test,” he said. “(The) provider was queried with a compliant query post-discharge and added the documentation. The payer is stating (that there was) no evidence (the) patient had this diagnosis because the fluid was clear. Pathology is the gold standard for diagnosing chorioamnioitis.” This was the reason why the patient had prolonged labor and ended up with a c-section. It is so important to code things like this to tell the clinical picture of our population in the United States. 

Notwithstanding the financial costs Mount Sinai has to bear, but the long-term consequences for the healthcare industry are more problematic since there isn’t “a true clinical picture of the population in coded language,” Jones said. 

“This will have a negative effect on population health, research, and improving quality of care through administrative data,” he added. 

Jones also pointed out that with greater specificity in the ICD-10 code set, coders have been defensive, and will “avoid certain ICD-10 codes because they will be concerned about denials.” 

Jones said that early last year, with ICD-10 on the horizon, his health system made a major investment in physician education, and it now has a clinical documentation quality improvement (CDQI) medical director at each of its hospitals. 

“These experts are continually focused on physician education to make sure we have the specific documentation to allow our coders to tell exactly what happens during the hospitalization via ICD-10 codes,” Jones said.

How has the downgrading of diagnoses/procedures on the inpatient side impacted billing at the health system?  

“Prior to developing a new department around DRG denials, our coders were doing defensive coding … leading to decreased complexity of cases – which, unfortunately for patients, was not telling the true clinical picture of the population,” Jones said. “Now, with more specific codes in ICD-10 (and) a new focus on DRG denials, we are more focused than ever to tell the story of our patients through accurate coding.” 

What advice would Jones offer to other providers facing the same challenge?

“(It is) important for all providers to work together to benefit our patients,” he said. “Ultimately, we are in the business of providing the best medical care we can to our populations. Having accurate administrative data that reflects the true clinical picture of our patients is crucial in population health.” 

About the Author 

Chuck Buck is the publisher of RACmonitor and the executive producer and program host of Monitor Mondays.

Contact the Author 

cbuck@panaceainc.com

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About James Jones, MD 

Dr. Jones received his medical training at St. Luke's-Roosevelt Hospital in New York City. He has had fellowships in nephrology and critical care, and an administrative fellowship at the American Hospital Association in healthcare transformation, where he is currently a senior fellow.

Dr. Jones joined the divisions of nephrology and critical care in 2008, advancing to associate fellowship director of the Division of Nephrology and director of both continuous renal replacement therapy and transplant donor evaluations. Following that, he became director of medical informatics and quality initiatives for Mount Sinai St. Luke's and Mount Sinai Roosevelt (now Mount Sinai West). He currently is the vice president of administration at Mount Sinai West and the senior systems medical director of clinical documentation and quality improvement for the health system.

Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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