Healthcare News & Insights

Why diagnosis coding flaws hurt your bottom line

One of the goals of adopting ICD-10 was to make the information in public health databases about patients more accurate. And judging by a recent analysis, hospitals need to make sure their billing departments are coding all patient diagnoses – or their reimbursement may be in jeopardy. 

ThinkstockPhotos-186958084Researchers from Johns Hopkins University examined data from the Agency of Healthcare Research and Quality’s (AHRQ) Nationwide Inpatient Sample (NIS) database.

The NIS database stores information about nationwide hospital visits for facilities that participate in the Healthcare Cost and Utilization Project (HCUP).

Per the AHRQ, these numbers are used to estimate healthcare access, quality, charges and outcomes for patients across the country.

Policymakers also use this data to determine how much risk a patient’s condition carries – which affects reimbursement from certain payors. Additionally, it’s crucial for estimating the likelihood that patients will be readmitted for their conditions.

Impact of diagnosis coding

The information in the NIS database is directly from the diagnoses listed on hospital bills submitted to insurance companies.

But due to problems with inaccurate diagnosis coding, this information is flawed.

An article from MedPage Today goes into detail about the issues with the NIS database, as discovered by Johns Hopkins researchers in their analysis (published by journal PLOS ONE). One big problem: Certain common conditions aren’t always coded on insurance claims, including obesity, alcohol use and tobacco use.

These factors, if present, affect patients’ risk for falling ill – or being readmitted to the hospital after discharge. But since they aren’t reported on claims, they aren’t fully accounted for in the NIS database.

According to patient-reported data from the Behavioral Risk Factor Surveillance System (BRFSS), a national survey administered to 500,000 American adults, nearly 36% of Americans are overweight. But NIS data only estimates that 0.21% of patients are overweight.

Similar discrepancies existed when comparing rates of obesity, smoking and alcohol abuse.

More accurate claims data

Information about patients’ weight, tobacco use and alcohol use is usually part of their medical record. But unless these factors are directly related to the reason that a patient was admitted to the hospital, billers tend not to include them on claims.

While the Johns Hopkins researchers suggested that policymakers try to obtain this data from other sources (including responses to the BRFSS, or even directly from hospitals’ electronic health records systems), hospitals can solve this problem by encouraging more accurate coding.

Once the dust settles from the ICD-10 transition, experts believe it’s only a matter of time before payors start auditing hospitals, checking that what’s documented matches up with what codes are reported.

If diagnoses listed in patients’ medical records aren’t reported on claims, it could raise eyebrows.

Along with the findings from the Johns Hopkins study, this is a good reason to reach out to your billing department and remind staff to make sure all patient diagnoses are reported to insurance companies on claims – even the ones that seem secondary to the patient’s condition at first glance.

Not only does this ensure billing accuracy, it can keep your hospital from facing reimbursement cuts, or even paybacks to carriers, due to an inaccurate assessment of patient risk.

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