By Matt Lambert, M.D., CMO, Curation Health
Why Are These High-Stakes Healthcare Topics Today
And What Is It That Providers Need To Be Doing?
Most people who work in and around health care already understand, at least at a high level, the concepts of documentation and coding in a fee-for-service context. Physicians have to document every service so that they and their organizations can be properly paid for the work they do.
But move coding and documentation into a risk context, and many key nuances change in ways that even savvy, experienced health care professionals may need a bit of help getting up to speed with – and it is critical that they do so because in the realm of value-based care, these topics carry a significant new load. They’re politically sensitive, make-or-break for strategy and provider/payer finances, and carry high regulatory and legal stakes.
This FAQ directly addresses healthcare stakeholders who need a quick conceptual boost or refresher on the overall topic terrain of documentation and coding, specifically in the context of risk or value-based care. It answers questions such as:
- Why is there so much intensity around these topics?
- What is the problem? Under-coding? Over-coding?
- In order to hit the universal goals – correct, thorough, and compliant risk-based documentation and coding, what should providers be doing?
The issues of risk-based documentation and coding
Risk and value-based care contracts were designed to move health care AWAY from per-click service economics, which would seem to make exact documentation in every patient visit LESS of a big issue. Why is there so much intensity around the issues of risk-based documentation and coding?
Correct and thorough documentation and coding are both crucial in risk contracts for three big-picture reasons:
1 In any form of modern health care risk economics, having a correct severity adjustment (aka risk adjustment) for a given patient/population will make or break the organization’s financial performance under the terms of the contract.
All contracts that revolve around reducing total costs must include some mechanisms to prevent adverse patient selection – providers or plans ‘cherry picking’ the healthiest, least-costly patients and avoiding the highest-cost patients. Severity adjustment (higher payment for higher-cost/complexity patients and populations) is that mechanism. It ensures that the organization is fully paid for caring for patients whose conditions are more complex, making them more costly to treat. Clinical documentation and coding, together, are the keys to severity adjustment.
The key to documenting and coding accurately for the correct severity adjustment is capturing and properly supporting not only all diagnoses, but the specific, and relatively small subset of patient diagnoses that qualify as Hierarchical Condition Category (HCC). HCC refers to conditions that trigger higher reimbursement to reflect the assumed higher cost of caring for that patient under the value-based contract.
2 All risk contracts come with quality and cost-related performance metrics. A provider is much more likely to be able to hit both types of goals – keeping chronic conditions managed, closing care gaps, and preventing avoidable admissions, if the information in the clinical record makes it obvious to the care team what conditions patients have that need addressing, gaps that need closing, etc.
3 Given the financial incentives for capturing patient complexity through documentation and coding, policymakers and regulators are keenly focused on making sure that no entity is ‘over-coding’ – submitting codes for conditions that increase the risk adjustment factor without the patient record reflecting proper documented support for those (higher-intensity) codes. This makes it even more important for clinicians to ensure they are documenting and coding conditions in a way that is accurate, thorough, and compliant with regulations. (See further discussion below.)
When talking about risk-based documentation/coding, what contract types are we probably talking about?
Commercial and Medicaid risk contracts exist and require severity adjustment, but the majority of risk dollars and energy today are focused on one of two types of Medicare risk contracts – the Medicare Shared Savings Program (MSSP, now known as Pathways) or a Medicare Advantage contract.
If we’re talking about risk-based documentation and coding, what PROVIDERS/SITES OF CARE are we most likely referring to?
Ambulatory sites, and most likely primary care/multi-specialty medical group clinics. Participating PCP/multi- specialty groups may be independent, part of a health system or part of a national chain.
These providers/sites of care are the focus because provider-patient interaction at these sites is considered a powerful opportunity for the active and ongoing management of longer-term, chronic conditions (and therefore inflection point for driving down overall avoidable cost). As a result, this part of the care continuum is where the most risk-based contracting activity is concentrated. These are also the providers with the biggest lift in front of them when it comes to learning how to do risk-based documentation and coding correctly.
‘High code intensity’ is one of a series of drivers that industry experts have flagged as a cause of over-payments by CMS to the Medicare Advantage program as a whole. And CMS is definitely cracking down on this form of potential fraud, waste and/or abuse. Audits have been triggered, payments have been clawed back, and false claims act suits have been brought.
That said, most providers are not systematically adding inappropriate codes to the patient record for financial gain. When providers add diagnoses without merit, very often the cause is not malfeasance, but human error. Or, more constructively – weak systems. Few provider organizations have achieved a practice environment in which it is easy for physicians to do risk-based documentation correctly and thoroughly.
To improve at risk-based documentation and coding, healthcare as an industry must look back at its hard-won lessons when it comes to systems thinking – engaging in systems thinking, and looking for ways in which systems are failing physicians who are doing their best to care for patients, and who generally have not been fully trained or supported when it comes to risk-based documentation and coding, and conventional metrics of safety/quality.
If most providers have considerable room to improve on risk-based documentation and coding accuracy, and we don’t have a problem with rampant over-coding, is the problem then rampant under-coding?
The core issue here is that without strong systems to support physicians in risk-based documentation and coding, it is difficult to code thoroughly and correctly in either direction. In other words, because mistakes are common, both over-coding and under-coding are also common. That means ANY GIVEN provider organization is probably at risk of inadvertently, across its many individual providers and care teams, doing both.
- Some individuals in the organization are adding codes without fully thinking through whether the clinical documentation evidence base is there.
- Some individuals are overlooking or hesitating to add codes even when warranted.
Unfortunately, these diametrically different types of error do not cancel each other out. Provider organizations with weak risk-based documentation and coding systems are BOTH leaving money on the table under the terms of the risk contract, AND leaving themselves open to the risk of an audit, claw-back and/or adverse judgment in a lawsuit.
Coding and documentation improvement efforts, technology, whole departments, and a massive services/technology support sector have been around forever. What exactly is making documentation/coding so hard to do correctly under VBC?
Physicians are consistently juggling too many different tasks. Risk-based documentation and coding rules are very complicated, vary from condition to condition, and are substantially different from fee-for-service coding rules.
Even when insurers, provider organizations, or vendors have tried to help by way of tools such as pre-visit lists of potential care gaps and diagnoses for a given patient, those supports do not help unless they are well designed and executed – which many are not. Many of these tools include too many overall items, with low- and high-merit items mixed together. That overwhelms the physician and any other member of the care team tasked with identifying clinical gaps that need closing.