Coding Process Improvement Report - Prime Academic Study

Current Processes

Coding errors are not uncommon in hospitals due to the complexity of the coding system and entering procedures. Below are coding errors that are often seen in the industry, many of which also apply to the Lower Mountain Hospital audit.

Lack of data to support claims – a diagnosis ICD code should be linked to a CPT or HCPCS code. A golden rule is “Do not code or bill it if it is not documented in the medical record.” Clinical documentation and data are required to justify reimbursements (Nock, 2017).
Upcoding – a common, usually innocent error. Patients are billed for more procedures or higher specialty than they received. Upcoding can occur due to human error in entering codes or a specialty such as cardiology with patients with multiple co-morbidities reporting the highest level evaluation and management (E/M) service, while the code should depend on actual patient condition, not just the level of the physician treating them. Sometimes the practice is abused by providers, which is fraudulent (O’Reilly, 2021).
Unbundling codes – instead of using several CPT codes for single parts of a complex procedure, if a single code is available, that captures multiple components of procedures, that should be used (O’Reilly, 2021).
Incorrect procedure and diagnosis codes being entered – this may be a result of yearly updates to the codes, shifting some around to a simple sleight of hand entering a wrong number. Either way, a wrong diagnosis or procedure is entered into the system, often resulting in immediate claim denial. Keeping updated on the latest code changes is vital to accurate input (Nock, 2017).

The Department of Health and Human Services (HHS) is the primary regulatory agency responsible for overseeing the healthcare industry. The Centers for Medicare and Medicaid Services (CMS) covers millions of Americans and is the leading subagency regulating coding. The government uses CMS to govern what services are covered, compensation levels for service providers, and how claims are processed. CMS establishes and regulates ICD-10 codes for diagnosis used across the industry. One of the key regulations for coding in healthcare organizations is Health Insurance Portability and Accountability Act (HIPAA). In 2009, the HHS mandated that every health organization covered by HIPAA must implement ICD-10 for coding (CMS, 2020). It also formalized the use of Current Procedural Terminology (CPD) and Healthcare Common Procedure Coding System (HCPCS) codes which are meant for procedures. CPT coding is created and updated through the American Medical Association (AMA), which cooperates closely with CMS on any changes, while CMS independently oversees the HCPCS coding that expands on CPT coding (MB&CC, n.d.). All billing and coding practices must be run in according to guidelines and regulations set by the agencies above as well as the rules set forth by the U.S. Office of Inspector General (OIG), which has the authority to investigate any potential fraud or abuse by healthcare providers as a medical biller and coder and to ensure full compliance with the law.

On the one hand, these regulations and unified systems are meant to create standardization in coding so that all organizations and providers use the same universal system of coding and billing, while other stakeholders in the industry, such as insurers and regulators, could easily track data and statistics. However, the reality is that the multiple layers of bureaucracy along with continually updated regulations and coding standards create an ever-evolving coding environment. For example, the volume of ICD diagnostic codes increased by 54,000 when the transition occurred from ICD-9 to ICD-10 in 2015. With ICD-11 being adopted in 2021, that number is set to increase again. It leads to misinterpretation of terms, overwork, and potential for human error, which results in increased claim denials and lower reimbursement rates. This puts significant pressure on organizations and workers who work with consistent modifications to regulations. Regulations require the coding process to be extremely accurate, up to the smallest details, otherwise, the claim may be denied leading to financial write-offs or losses for the provider (Medical Billing Benefits, 2020). The CMS and AMA offer detailed but simple-to-understand guidelines that include all elements of the coding entry. Organizations and employees must maintain up-to-date and accurate coding practices.

Recommendations

Organizations should take steps to upkeep with evolving medical coding and billing practices as it is a process of continuous improvement. First, quality audits should be conducted regularly to identify common and simple coding errors or mismatches such as the ones seen earlier. This helps to keep the organization in check in case CMS or OIG audits it. Staff should also undergo periodic training, especially if new guidelines or coding updates are released. Those who do not meet the 95% accuracy rate can undergo coder mentoring from coding professionals, providing individual feedback and knowledge.

In terms of policies, it is common that there are few, if any, written coding policies in organizations, or coding policies may differ between specialties. Standardizing the coding process and policies across the healthcare organization is important. All formal and informal policies should be written, and guidelines provided for easy access by providers. Creating a comprehensive coding handbook as a quality improvement plan may be successful (Youmans & Youmans, 2019). Recent developments such as computer-assisted coding (CAC) are software that analyzes healthcare documents to determine appropriate medical codes, assisting the provider in entering them based on preset algorithms or identifying potential errors (LaPointe, n.d.). That is a means of how technology can be leveraged to increase accuracy and efficiency in coding.