The diagnosis-related groups (DRG) were developed as a method of classifying hospitalized patients into categories having a similar process of care and a predictable range of services. DRGs play a critical role in hospital reimbursement. To assign an appropriate DRG you need to 1) determine the principal diagnosis, 2) determine if procedures were performed and 3) assign reportable secondary diagnoses. Accurate code assignments and sequencing is crucial to choosing the correct DRG. Inaccuracies can affect a hospital’s reimbursement and cause poor performance during audits. DRG auditing can ensure compliance with coding guidelines and regulations.
Most forms of DRG auditing require thorough medical record review. I say “most forms” because there is now a methodology out there that allows for DRG auditing without medical record review! Yes, the future is now – but ordinarily a complete and detailed review of the record is necessary. Of course, we see inconsistencies, omissions, and copy/paste bandits in the provider documentation. Sure, there are common sequencing issues that arise like sepsis on admission coded secondary to the local infection, which is also present on admission. In many ways, the DRG audit is similar to a typical coding review.
However, having performed chart reviews including DRG audits and clinical Medical Necessity reviews for many different clients, both on the provider and payer side, I can say typically most findings are a result of a clinical DRG audit. With clinical DRG auditing, the provider may have documented the diagnosis correctly; and the coder assigned an accurate code based on the documentation. However, clinical validation of the assigned diagnosis looks for criteria that confirm the presence of the condition. A good example is the commonly targeted diagnosis code N17.9 (Acute kidney failure, unspecified). The Kidney Disease Improving Global Outcomes (KDIGO) has very specific clinical practice guidelines that define acute kidney injury. The criteria are widely accepted and adapted by many payer policies. If the documentation (including lab values and urine output) does not support the clinical criteria, the code assignment can be challenged even if the provider documented “acute kidney injury” and there is evidence of treatment.
The clinical DRG auditor validates the diagnosis by evaluating the complete clinical picture from the onset of symptoms, including any prehospital care. Additionally, the DRG auditor evaluates medical/surgical history, coexisting contributing factors, diagnostic and laboratory testing, consultations and treatment plans. To be a clinical DRG auditor it is necessary to have extensive experience in ICD-10-CM, ICD-10-PCS and a high-level understanding of reimbursement guidelines. I have found it helpful to have a strong understanding of medical necessity, disease processes, and typical inpatient treatments. DRG auditors are astute medical record reviewers and must follow facility-specific guidelines carefully, but also remain objective.
Knowledge of appropriate clinical care, accurate documentation and correct coding come together to perform an effective review. Therefore, just like all coding professionals, DRG auditors require continuous education to stay updated on coding guidelines and healthcare regulations. In addition to coding and DRG updates, deep dives into disease processes and standards of care are routinely necessary.
Clinical DRG auditing is an effective tool in payment integrity that decreases the chances of improper reimbursements. Additionally, it provides an organization important data that can help improve overall quality of care and identify areas for improvement. As an essential role in our healthcare system, it is an exciting, thought-provoking, and insightful way to support bridging the growing gaps between healthcare providers, hospitals, and insurance carriers.
Cheryl Smith, BSN, RN, CPC, CPMA
Manager Consulting, LexiCode
References: The National Institute of Health, Centers for Medicare & Medicaid Services