Clarissa McCormick, RHIT, CCS

Clarissa McCormick is a DRG subject matter expert and Lead Auditor at Discovery Health Partners. She holds a Health Information Technology degree from DeVry University and maintains RHIT and CCS credentials from AHIMA.

DRG validation strategies for success

Research into medical billing errors shows that as many as 80% of medical bills contain errors. In 2017, CMS paid $390 billion in claims, $36 billion of which were paid in error. There are several common coding and billing error types, with incorrect DRG coding being one of them. As health plans conduct clinical audits, DRG validation plays an important role in ensuring the accuracy and validity of payments.

DRG coding errors can be caused by clerical oversight or fraudulent practices. These errors can have a significant impact on payments and the health plan’s ability to maintain payment integrity. By auditing DRG coding, health plans can work to ensure that claims comply with all guidelines and that any uncovered overpayments are recovered accordingly.

The following strategies help health plans ensure their DRG validation audits are successful.

1. Analyze trends in data

When performing a DRG validation audit, data analytics plays a key role. Sophisticated data analytics technologies include predictive analytics, rules-based algorithms, and machine learning techniques. These technologies can examine hundreds of variables from multiple data sources and bring coding errors to light.

With these tools, payers can uncover trends and patterns in incorrect coding. Rather than sifting through hundreds of claims without direction, those trends and patterns highlight the most frequent coding errors and enable auditors to review only the claims that are most likely overpaid.

2. Trust coders’ professional knowledge

While data analytics can highlight trends in incorrect coding, DRG validation audits require the knowledge of a seasoned coding professional. A trained and knowledgeable staff—coupled with data analytics—can review and analyze historical claims data, medical records, and databases to quickly pinpoint errors.

To ensure proper learning, professional coders are credentialed through organizations like AHIMA that offer education, training, and certification. AHIMA helps coders gain a fundamental to advanced understanding of clinical diagnosis coding, as well as detailed insights into all types of DRG methodologies including MS-DRG, AP-DRG, APR-DRG, and Tricare DRG.

3. Get clinical validation

The expertise of a coder reaches a limit when physician documentation and clinical indicators appear to be imprecise or incomplete. Only a trained clinician—a nurse or physician—can call clinical decisions into question and get them corrected.

With clinical oversight, the health plan can be sure to conduct medically sound audits that reduce provider abrasion and ensure medically defensible recoveries. Physicians can help providers understand the medical rationale behind DRG coding inaccuracies and show providers where they may have gone wrong in their coding and documentation practices.

The combination of advanced data analytics, the knowledge and expertise of an experienced coder, and clinical oversight helps health plans achieve greater success with their DRG validation audits. Together, these strategies help health plans recover overpayments associated with coding inaccuracies—and potentially correct the practices that caused the errors in the first place.

Learn how Discovery Health Partners can help you enhance your DRG validation audits.

Clarissa McCormick, RHIT, CCSDRG validation strategies for success
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