Pinson and Tang CDI Pocket Guide
Richard Pinson

Clinical Validation - Where do we Stand?

June 1, 2017

As everyone probably knows by now that the 2017 Official Guidelines for Coding and Reporting, effective October 1, 2016, contains a new, perplexing and problematic section I.A.19 titled “Code assignment and Clinical Criteria” regarding clinical diagnostic criteria that creates a dilemma for all providers:

“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”.  Clinical validation involves clinical review of a case to see whether or not the patient truly had the conditions that were documented in the medical record, 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 should not be considered clinically valid.

An example of an authoritative diagnostic standard is the National Kidney Foundation’s 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 and ICD-10-PCS classifications, the official coding guidelines for both of the classifications, and the Affordable Care Act.  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 RAC Statement of Work which require clinical validation of diagnoses submitted on claims.  Everyone is aware that clinical validity is a primary focus of the Medicare RAC and commercial recovery contractors, and clinical validation is a frequent reason for payment reductions.

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.

At the 2017 ACDIS Annual Conference held in May, Nelly LeonChisen, RHIA provided clarification on this new coding guideline since Coding Clinic had received a large volume of questions from facilities.  Nellie is the American Hospital Association’s (AHA) Director of Coding and Classification, the Executive Editor of the AHA’s Coding Clinic, and serves as the AHA representative to the ICD-10 Maintenance and Coordination Committee.

At the meeting, Nelly explained that the guideline was intended to reaffirm long-standing advice that coding must be based on provider documentation:

  • Only the physician, or other qualified healthcare practitioner legally accountable for establishing the patient’s diagnosis, can “diagnose” the patient.
  • Clinical information published in Coding Clinic does not constitute clinical criteria for establishing a diagnosis, substitute for the provider’s clinical judgement, or eliminate the need for provider documentation regarding the clinical significance of a patient’s medical condition.

She also confirmed that this new guideline addressed coding, not clinical validation which is a separate function.

Coding Clinic, Fourth Quarter 2016, pages 147–149 also states that “coders should not be disregarding physician documentation and deciding on their own, based on clinical criteria, abnormal test results, etc., whether or not a condition should be coded.”

In other words, coders should not be accountable for clinical validation because they would not be expected to make such clinically complicated judgements by themselves.  Organizations must establish clear, compliant policies and processes for dealing with this clinical validation dilemma.  Coders must be involved because they are responsible, as employees of the hospital, for ensuring that codes are assigned in compliance with the law, regulations and coding guidelines.

Therefore, organizations must continue clinical validation to ensure that documentation is complete and accurate, and that it appropriately reflects the patient’s clinical conditions, abiding by the statutes, regulations and policies that govern claims submission and reimbursement.

CDI programs that allow and encourage clinical documentation specialists and coders to collaborate and conduct clinical validation are the ideal institutional venue for ensuring compliant coding and claims submission that fully and accurately reflects the patient’s clinical condition and the circumstances of the admission.

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