DRG validation strategies for success

August 13, 2020 Clarissa McCormick, RHIT, CCS
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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The impact of telehealth on clinical audits during COVID-19

August 5, 2020 Lynn Walter, MBA, RN, COC, CCFA
The impact of telehealth on clinical audits during COVID-19

Nowhere is COVID-19 felt more acutely than in healthcare. Hospitals are overloaded, clinicians are overworked, and ICU beds are scarce. The pandemic has also had an effect on the ways in which we seek non-emergent care. Telehealth has become a welcome relief for patients who need to seek care but want to stay in the safety of their homes. It also helps providers remotely screen and monitor COVID-19 patients without putting themselves at risk. 

4,347% growth

in telehealth claims

FAIRHEALTH.ORG

$250 billion

stated telehealth market potential

MCKINSEY & COMPANY

7-fold growth

in telehealth projected by 2025

FROST & SULLIVAN

In response to the growing need for telehealth, the Department of Health and Human Services issued a waiver on March 6, 2020, allowing all Medicare beneficiaries in all areas of the country to receive telehealth services from home. Previously, telehealth was only allowed in rural areas from healthcare sites. The waiver relaxes several other regulatory guidelines including those surrounding HIPAA, copays, deductibles, and more.

While telehealth has become a lifeline during the pandemic, the potential for improper coding and documentation—and fraud, waste, and abuse—is high. Until reimbursement for telehealth is better understood, health plans are wise to include telehealth claims in their clinical audit programs.

New telehealth regulations

As they manage telehealth claims, health plans need to first fully understand the new payment requirements. There are three types of telehealth services that fall under the telehealth expansion waiver:

  • Medicare telehealth visits are visits with a provider via telecommunication systems that offer audio and video 
  • Virtual check-ins are brief, patient-initiated check-ins with providers via telephone or other device to determine whether an office visit or other service is needed
  • E-visits cover communications between a patient and provider through an online patient portal

The waiver also includes stipulations as to whether the patient must be an established patient. A range of providers including doctors, nurse practitioners, clinical psychologists, and licensed clinical social workers can offer telehealth services. In its fact sheet, CMS provides greater detail, as well as HCPCS and CPT codes for telehealth services. 

Telehealth payment risks

Relaxing telehealth regulatory guidelines has led to growing concern about a potentially heightened risk of improper payments. Concern has arisen around a few factors:

  • CMS has approved 135 additional temporary billing codes for telehealth services, and new information and guidelines are changing by the minute, causing confusion and raising the risk of error
  • Penalties for some HIPAA violations may be waived to encourage telehealth, though this raises concern for patient privacy and safety
  • States and the federal government have loosened state licensing restrictions, allowing providers to work across state lines, widening the potential for liability and malpractice repercussions
  • States like California have their own telehealth regulations, which are stricter than the federal government’s. These state regulations must take precedence

Telehealth in clinical audits

As telehealth continues to skyrocket and with relaxed guidelines, health plans need to begin including telehealth claims in their clinical audit programs. Claims need to be reviewed for legitimacy to spot instances of fraud. Plans need to validate that services are coded and billed correctly and verify that appropriate documentation is included in all claims. 

Telehealth has been making great inroads in helping to combat the COVID-19 crisis, but until it is better understood, health plans are wise to approach this uncharted territory with a dose of caution.

Learn more about Discovery’s Clinical Audit solution.

Lynn Walter, MBA, RN, COC, CCFAThe impact of telehealth on clinical audits during COVID-19
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Trends that are re-shaping payment integrity strategies

July 16, 2020 Diane Akrami
Trends that are re-shaping payment integrity strategies

Evolving payment models and new technologies are supporting health plans’ efforts to implement more proactive, data-driven payment integrity solutions. Diane Akrami, Senior Director, Audit Operations, discusses what’s in store for the future of payment integrity and how the company is helping clients make the transition from retrospective to prospective programs.

During the last decade, a number of emerging trends have impacted health plans’ ability to reduce their exposure and increase payment accuracy. Value-based contracting, for example, has left many payers struggling to figure out how to transition to the performance-based payment methodologies that center on cost efficiency, quality, and delivery standards. The changes around CMS’ reimbursement models for home health and skilled nursing can pose some challenges as provider and payers adapt to those changes and create new PI audit opportunities. Payment integrity programs can provide needed support in adapting to claims processing changes like these.

At the same time, providers themselves are evolving and making changes to their billing processes based on these new models. In order to mitigate potential payment errors, health plans are moving from a retrospective process of identification and recovery to a more cost-effective prospective approach. Through clinical audits focused on the provider type, place of service, and their reimbursement models, plans can verify that services billed were performed, ensure proper payments, and avoid the costs of recovery. Payment integrity has a role to play here. Focused payment integrity programs that take a holistic approach to claims auditing enable health plans to shift from cost recovery to prevention and cost avoidance, thereby increasing claim payment accuracy.

Helping transform payment integrity approaches

As industry needs change, Discovery has been bolstering our payment integrity capabilities with experienced talent, technology platforms, and analytical tools. Our highly-experienced Clinical Audits team builds and deliver solutions for urgent care, home health, skilled nursing facilities, high-cost drugs, and other standard and client-specific audits, Our client-centric approach to payment integrity will allow us to continue expanding these types of services to address health plans’ needs as they arise—specialty audits for provider telehealth claims, for example—to support our clients’ cost avoidance and recovery operations.

Using data to evolve payment integrity approach

The healthcare industry is accelerating its adoption of cutting-edge technologies like artificial intelligence and machine learning to add efficiency and cut costs across operations, including in the payment integrity space. Discovery leverages analytics, artificial intelligence, and machine learning to audit millions of claims every month and find the “needle in the haystack” claims that yield the highest savings for health plans. We are also using analytics to identify patterns in client data that are specific to that provider. We can use that information to educate clients on how to address specific trends to improve their billing processes. We can also help them identify opportunities to change behaviors, so they are able to pivot to a proactive payment process.

Health plans are looking for a true partner who can help them support and enhance their payment integrity efforts so they can better control costs associated with incorrect billing and overpaid claims and improve administrative and medical loss ratios. With years of experience supporting both payment integrity and managed care, Discovery’s connected payment integrity approach—combined with our dedication to partnership, responsiveness, and relationships—delivers results that go far beyond financial value.

Find out how Discovery Health Partners can help strengthen your payment integrity initiatives. Contact us today.

Diane AkramiTrends that are re-shaping payment integrity strategies
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Caring for providers during clinical audits

July 9, 2020 Moira Dolan, M.D.
Caring for providers during clinical audits

For today’s health plans, clinical audits play a critical role in ensuring the financial health of the organization. They can help a plan control costs, comply with government regulations, and meet financial requirements. Fundamentally, clinical audits help to identify where payment errors are likely. There are many flavors of clinical audits—reviews for high-dollar claims, medical necessity, hospital bills, DRG validation, and skilled nursing care are among some of the most common.

Effect of clinical audits on providers

Whatever the flavor of the audit, it’s likely that clinical audits can create provider abrasion. As a medical director, I have experienced clinical audits and understand the reasons for the discontent. There’s little disagreement in the medical community that clinical audits are necessary, yet tedious and expensive.

In fact, nearly a third of providers report a negative experience with payer audits, according to a recent study by Frost & Sullivan. Providers report that their negative experience stems from factors including a high volume of medical requests, the prevalence of technical denials, and the high administrative costs of audit compliance.

More than 92% of survey respondents tie provider abrasion to the volume of medical requests. And 50% of providers consider clinical validation audits and DRG coding to be very or extremely labor-intensive. This is a critical factor given that labor intensity has a direct impact on administrative costs.

Improving the payer-provider relationship during audits

The good news is that any dissatisfaction in the clinical audit process is not irreparable. I have learned that provider-friendly techniques can go a long way toward delivering a positive experience during clinical audits, making them less intrusive and more cost-effective for both parties. Recognizing that clinical audits have the potential to cause provider abrasion is the first step to reducing discontent. Beyond that, communication and education are key.

Clear and transparent communication throughout the clinical audit process can have a significant impact on enhancing the provider experience. By clearly communicating expectations, health plans can alleviate provider unease with the audit process and mitigate the adversarial impact and stress related to clinical audits.

Providers are more likely to be amenable to the audit when they clearly understand requests, deadlines, and the plan’s findings. When they know what to expect and understand that the communication lines are open, providers are more likely to have a positive experience.

Similarly, education is an important tool in reducing provider abrasion. Perhaps the most valuable element of clinical audit education is helping providers understand how to change their behavior to reduce the impact of audits. Health plans can educate providers on the need for preventative measures in situations related to high-risk targets. Education can also include helping providers understand how to implement a proactive approach to address recurring problems.

Ultimately, with frequent and transparent communication and education throughout the clinical audit process, health plans can help providers view the plan in a favorable light and experience the audit without undue stress. With a positive clinical audit experience, payers and providers can work together to reduce the potential for post-payment recovery today and in the years to come.

Learn how Discovery Health Partners can help you enhance the provider experience in clinical audits.

Moira Dolan, M.D., is Medical Director for Discovery Health Partners. She is a graduate of the University of Illinois School of Medicine and has been a practicing physician for over 30 years. Dr. Dolan maintains a private medical practice in Austin, Texas.

Moira Dolan, M.D.Caring for providers during clinical audits
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