Let Doctors Know: Poor Diagnosis Equals Poor Compliance/Reimbursement

Some hospitals are seeing Medicare outpatient claims denied because the reported diagnosis does not support or justify the procedures and services performed. This happens despite Medicare's continually stressing that accurate diagnosis coding is vital for both compliance and reimbursement. Yet many facilities are struggling to convince physicians that the diagnosis code needs to be as accurate as the E/M code. 

Medicare's grouper software assigns APCs using diagnosis and procedure codes as defined by CMS. It also applies prescribed edits and calculates reimbursement. But, you still must have an accurate diagnosis to establish the medical necessity to perform an outpatient procedure. It's a requirement for Medicare reimbursement.
 
One of the main reasons hospitals must address outpatient diagnosis coding is that it is being targeted as a compliance issue under the OPPS. "We will evaluate the effectiveness of internal controls intended to ensure that services are adequately documented, properly coded and medically necessary," the 2001 Work Plan of HHS's Office of the Inspector General states. 
 
Under Medicare rules, an accurate diagnosis code is required to demonstrate medical necessity for a visit, even though, in most cases, reimbursement is not tied directly to it. As a result, the ICD-9 diagnosis code is intimately linked to the question of whether a service a hospital provides is medically necessary -- and will be reimbursed.
 
Prepare for OIG Review
 
According to Sandra Soerries, CPC, a coding consultant with Baird Kurtz & Dobson in Kansas City,  some fiscal intermediaries (FIs) are taking a hard look at diagnosis coding in the outpatient surgery setting. They're watching it not just for medical necessity, but to make sure the ordering of the procedure, the final diagnosis and the past report are consistent, Soerries said in a recent Coding Institute audioconference. 

FIs are also keeping an eye on Part A and Part B claims, to ensure that the diagnoses on these claims correlate for an individual patient. In the audioconference, Soerries used the example of a patient who is referred to an outpatient setting for a colonoscopy with complaint of abdominal pain, and the hospital and physician assign inconsistent diagnoses. 
 
"If the patient is a diabetic and one of the claims goes in with diabetes as the primary diagnosis and the other goes in with abdominal pain, most likely the FI will deny one or both of them," she warns.
 
While surgery might be one target of the OIG, Cheryl D'Amato, RHIT, CCS, director of Health Information Management at HSS Inc. in Hamden, Conn., warns that accurate diagnosis is important for all [...]

- Published on 2001-07-01