CDI programs were originally developed to improve the completeness, accuracy, and clarity of inpatient clinical documentation to ensure inclusion of pertinent diagnoses that influence DRG assignment. With the advent of public reporting of quality measures and the CMS pay-for-performance programs, the role of CDI now extends well beyond DRGs. Hospital CDI programs frequently include review of additional payer sources beyond MS-DRGs (APR-DRG, non-DRG), mortality reviews, hospital-acquired conditions (HACs), patient safety indicators (PSIs), and outpatient services.

How can an organization make the most of their CDI services and achieve the greatest return on investment? Given finite resources, CDI will be most effective when you’ve correctly identified the challenges and opportunities that face your hospital. Some of the most fruitful opportunities may be found in:

• HCCs in the inpatient setting
• Payer denials and appeals
• Physician office practice
• Emergency department
• Observation services

For each opportunity area, you should first identify specific needs and resources (e.g., staffing, collaboration with other departments) and decide how you will measure your results and define success. Wherever possible, baseline data should be generated as a first step to track a return on investment (ROI) for your expanded CDI program activities.

Many hospitals can start with inpatient capture of HCCs, because the additional work effort can usually be absorbed by your current CDI staff. Reducing payer denial risks does not necessarily require additional resources, unless CDI is involved in composing appeal letters.

To expand the scope of CDI to the outpatient setting typically requires more staff. Since payment for an outpatient encounter is determined primarily by the service provided and not the diagnosis coded, however, it can be difficult to demonstrate an objective return on investment to support the effort.

Every hospital is unique. The decision to expand your CDI program into other areas should be made only after consideration of the particular circumstances of your own facility.   

INPATIENT HCCs. Capture of HCC diagnoses in the inpatient setting is important since HCCs affect risk-adjustment for payment incentives such as the CMS Pay for Performance programs. Only those HCCs submitted from inpatient discharges are used for risk adjustment of the three CMS inpatient pay for performance programs.

As value-based risk adjustment payment models become more prevalent, accurate documentation of HCC diagnosis codes will become more central to reimbursement.

To incorporate HCCs into your inpatient CDI review process, first optimize the MS-DRG assignment with identification of MCC/CCs and APR-DRG severity levels. Most diagnoses that influence APR-DRG severity are also CCs or MCCs; there are only a few non-CC conditions that can change the APR-DRG severity level.

On the other hand, HCCs tend to be chronic conditions and only half of the CMS-HCCs are CCs or MCCs. For example, a metastatic cancer diagnosis (which is a CC) is the highest-weighted HCC and significantly affects risk adjustment for most outcome measures. This should be a CDI focus to ensure this diagnosis (when supported) is always coded on the claim.

The CDI team should make a list of the more common, high-impact HCC diagnoses to ensure capture and query for these diagnoses as well. Our Outpatient CDI Pocket Guide: Focusing on HCCs includes a list of the most common HCC diagnoses to help you identify your focus list.

It is most effective when processes for capturing chronic conditions that influence risk adjustment within your electronic health record are incorporated systematically by your physician documentation procedures. Links between problem lists and provider notes, a problem list reconciliation process, and physician admission order templates can support point-of-care documentation of these pertinent conditions.

In collaboration with the quality department, the CDI team should review quality and pay-for-performance reports to identify opportunities where more precise physician documentation and coding could improve data quality, risk adjustment, and the hospital’s overall performance results.

Documentation of HCCs is particularly important if your organization or providers are paid under a capitation or value-based contract (e.g., ACO, APM).  The impact will vary based on your patient populations and insurance types. In addition to knowing whether your state uses a risk adjustment methodology or value-based contract, you should determine whether your organization or its employed physicians:

• Participate in any full-risk capitation agreements
• Are part of an accountable care organization (ACO) bundled payment model, or other alternative payment model
• Participate in any value-based agreements with Medicare Advantage or other health plans, creating a revenue incentive if quality or risk scores improve
• Offers a provider-sponsored Medicare Advantage plan

At this time, most hospitals and providers are not paid under any capitation or value-based contracts, but these are becoming more common.

In our next article, we will discuss CDI and coding involvement in payer denials and appeals.