The Impact of Clinical Documentation/Codingon Readmission & HAC

Penalties and Value Based Purchasing

HFMA Presentation2015

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Melinda Hancock, Keynote Speaker WV HFMA

National Chair-Elect HFMAPartner, DHG LLPFormerly CFO, Bon Secours Health

System

My Initial Reaction:◦ That makes sense - documentation would be a

factor because Readmission Rates are adjusted for “Severity of Illness”

“We did not have Readmission problem. We had a Documentation Problem.”

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I apologize!!!◦ The impact of clinical documentation was

far greater than I expected.

This was also true for ◦ Mortality Rates (Value Based Purchasing)◦ Hospital Acquired Conditions

Documentation may be the defining driver for potential penalties in all 3 areas.

Her comment caused me to dig deep into the data.

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1. Excessive Readmissions are a problem that needs to be addressed:

◦ Improved Discharge Instructions◦ Improved Transitional Care◦ A focus on Frequent Flyers

2. Improving Quality is important◦ Major quality improvements are occurring◦ HAC Penalties have focused our efforts

3. Mortality Rates do differ by hospital◦ We should be focused on reducing mortality

rates ◦ Improving Outcomes is important

Before I explain the impact of clinical documentation & coding:

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The most progressive Health Systems that are transitioning to Value Based Healthcare are focused on:◦ Having the best Quality Scores◦ Reducing costs◦ Increasing clinical efficiency and effectiveness◦ Bundled Payments◦ Moving towards Population Based Payment

Why? They believed the FFS system was no longer viable for the country, for businesses and for providers.

They are out in front of The ACA.

A Range of Responses to The Affordable Care Act

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Quality1. Risk-adjusted mortality index (in-hospital) 2. Risk-adjusted complications index 3. Risk-adjusted patient safety index 4. Core measures mean percent Extended Outcomes 5. 30-day risk-adjusted mortality rates

acute myocardial infarction (AMI) heart failure pneumonia

6. 30-day risk-adjusted readmission rates for AMI, heart failure, pneumonia, and hip/knee arthroplasty

Efficiency 7. Severity-adjusted average LOS 8. MSPB index Patient Assessment of Care 9. HCAHPS score (patient rating of overall hospital performance)

Truven’s 15 Best Health Systems The 2015 Study Performance Measures

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In States and Regions lacking Aggressive Health Systems the focus is more on ◦ Adapting to The Affordable Care Act

Reducing/eliminating penalties EHRs & Meaningful Use Changing Payer Mix (Expanded Medicaid, etc.)

What should your hospital be doing to make itself attractive to a progressive health system? ◦ Remain financially viable◦ Engage with your Medical Staff◦ Improve quality & quality scores◦ Build a vision for the future

A Range of Responses to The Affordable Care Act

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The ACA Penalties will keep expanding and Pay-for-Performance will continue to grow.

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There will be an increasing emphasis on Alternative Payments

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Even if Clinical Documentation and Coding are really the root cause of your Readmission or HAC Penalties and could improve your VBP Scores---

It is important to continue to address these issues. They are not going away.

Good Clinical Documentation will help you to know where the real problems are.

Healthcare is dramatically and rapidly changing

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496 more hospitals penalized in 2015◦ Total of 2610 hospitals penalized

Average Penalty increased from .38% to .63%

Is there a variable that we are missing?

The Documentation Problem:Readmissions

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JAMA Article (January 2015): A new study suggests that seniors who develop a

bout of pneumonia severe enough to require hospitalization are at an increased risk of having a heart attack, stroke, or dying of heart failure.

In the first 30 days, in fact, their risk of having a heart disease event is four times higher than that of people who were not hospitalized with pneumonia.

The Important Take-away: ◦ If you focus only on decreasing your readmissions you

may increase your 30-day mortality rates.

What if you don’t improve Clinical Documentation and just focus on reducing Readmissions?

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My 91 year old Uncle. Very caring—loved by all Never sick, Active, No Meds, BMI <30 Wife of 68 years passed away at home in May

after 10 years of declining health In December he had a heart attack

◦ Goes to a top 100 Cardiac Care hospital◦ Angioplasty & splent◦ Discharged to home 7 days later

Daily home care◦ Plus RN visit 2x/week◦ Plus PCP visit 1x/week

A Personal Story about Readmissions & Pre-mature death

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I took him home from the hospital◦ He walked into his home. I only assisted for balance

As I visited during the next 3 weeks I felt like he was gradually slipping downhill.◦ Eating less and less◦ Sitting forward in the chair◦ Having trouble sleeping at night◦ Shallow breathing, getting more rapid

His physician prescribed a medicine to help◦ We discuss hospitalization & concern with “readmissions”

My wife visited & talked with my uncle◦ He wanted to die at home◦ But more importantly “HE WANTED TO LIVE”

A Personal Story about Readmissions & Pre-mature death

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A subconscious awareness that sites we had worked with were not suffering the same level of Readmission penalties.◦ Confirmed in the data: especially true for CHF,

COPD and Pneumonia

Then I looked at Bon Secours sites.◦ Also confirmed

But why????

My journey to discover the truth about readmissions

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Readmission Penalty 3.00% 0.00%CDI Program for 5 years 10 years

Standard CFMACDI Site CDI Site

Medical Discharges: 1562 1503Cardiac CMI .9433 1.0621Medical CMI 1.0731 1.3461Neurology CMI 1.0896 1.1438Pulmonology CMI 1.1629 1.3045Combined Med CMI 1.0789 1.2420

Comparing Medical CMIs of The Two CDI Sites of the same size

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CMI by DRG Groupings:Site Penalty 3% 0%DifferenceHeart Failure: 1.1045 1.1390 +.0345Simple Pn:1.1661 1.2337 +.0676Resp. Inf. (Pn): 1.6442 1.7891 +.1449COPD: .9422 .9936 +.0514AMI: 1.3493 1.2052 -.1441Total Joint:2.1744 2.1707 -.0037

Mixed results. What else?

MCC/CC Capture Comparison of the Two Sites

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When we audit, it is the area where the greatest amount of change occurs

Surgical cases are easy: usually add MCC/CC

These are complex medical cases: ◦ Patients usually have multiple Dx◦ Existing chronic conditions◦ Then all of a sudden the patient becomes “acute”

and requires hospitalization Dx often include Pn, COPD, CHF, Respiratory

Failure, Sepsis◦ These are sick patients!

The Complex Medical DRG Area

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Percent of all Medical Patients by Dx within the “Complex Medical DRG area”:

Site Penalty: 3% 0% Heart Failure: 6.0% 6.3%Pneumonia: 8.0%4.2%Resp. Infect. (PN) 3.0% 2.4%COPD: 10.0% 4.0%Respiratory Failure 5.0%

2.9%Sepsis: 4% 17.1% Total: 36% 36.9%CMI of Complex DRGs: 1.2103 1.4620

The Real Source of the Difference

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Change in Patient Volumes if CFMA’s %s applied:

DischargesActual Projected

◦ Heart Failure* 88 98◦ Simple Pneumonia* 132 66◦ Respiratory Infection (PN)* 49 37◦ COPD* 149 63

◦ *418 Readmission “Index” actual discharges ◦ *264 Readmission “Index” projected discharges

◦A 1/3rd reduction in “Index” patients The sickest, most likely to be readmitted

How does this impact Readmissions?

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These cases change in all sorts of directions:◦ Add MCCs or CCs◦ From COPD to PN◦ From Simple PN to Gram- or Aspiration PN◦ From PN to Sepsis◦ From COPD to Respiratory Failure◦ Etc.

It’s all based on this question:◦ What is clinically happening with this patient and has

the doctor documented it in a manner that Coding can capture it?

What is the complete clinical truth for each patient?

This is not a simple shift of cases to Sepsis as the Principal Dx

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There are some areas of CDI that are much more clinically complex than most areas.◦ Sepsis◦ Respiratory Failure◦ Gram-/Aspiration Pneumonia

Documentation Specialists need to clinically understand these areas (they are not doctors)

Then someone has to get the coding staff on board (changes their normal practice)

Finally, you have to dialogue and bring about change within the medical staff.

Why the huge shift to Sepsis?

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Improved CDI of Complex DRG patients:1. Shrinks the pool of Readmission Index Patients

removing the most sick (and most likely to be readmitted) from the pool.

2. Some who remain in the pool are better documented (higher SOI) and therefore less likely to lead to a readmission penalty.

3. Others who remain in the pool are the least sick and therefore less likely to need readmission.

4. Hospital’s CMI improves5. Hospital’s Readmission Penalty is reduced

In Summary:

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This radical shift in % patients by principle Dx was replicated:◦ Bon Secours Health System had pattern similar to

CFMA sites◦ Best Medical CMI hospitals in MI, WV, Ohio, Utah,

Nevada◦ Less readmission penalties at these hospitals.

Majority of hospitals in MI, WV, Ohio, Utah, Nevada had pattern similar to the Standard site.◦ And greater readmission penalties.

Is this just a CFMA pattern?

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Mortality Rates (like Readmission Rates) are adjusted for Severity of Illness◦ MCC/CCs make a significant difference in MRs◦ Multiple MCC/CCs are cumulative

While payment does not change But your Severity of Illness (and Predicted Mortality

Rate) increases◦ CDI has to advance beyond just getting to a

better DRG to getting a complete clinical picture.

What is documentation’s impact on Mortality Rates (VBP)?

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The 6 month Mortality Rate for Simple Pn is 5-10% depending on MCC/CCs.

The 6 month Mortality Rate for Gram- or Aspiration Pn is 50-60%

A 5-10 fold variation

If you have a lot of Gram- or Aspiration PNs coded to Simple PN then your PN actual mortality rate is going to be much greater than your predicted mortality rate: resulting in a penalty.

As with Readmissions the correct Principle Dx is also important:

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A Formal Case Study: Improving Mortality Rates

DRG Group Original Reassigned by MR

PulmonologistRespiratory Infection 14.3% 11.6%

Pneumonia 8.3% 3.4%

Hospital went from “Below Expected Performance” to “Better than Expected Performance”, just by reclassification of patients to correct principle DxCFMA 2015 27

1. Only 1 Star for Sepsis for Mortality within 1 month of Discharge.

◦ Predicted Mortality of 14.11%◦ Actual Mortality of 19.32%◦ Probable cause: Only most obvious (sickest)

Sepsis cases are currently identified

2. Only 1 Star for COPD for In House Mortality

◦ Predicted Mortality of 1.09%◦ Actual Mortality of 2.07%◦ Probable cause: Many of these COPD deaths

should have been documented/coded to Sicker DRGs (PN, Sepsis, Respiratory Failure)

3 Examples from Healthgrades.com

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3. Only 1 Star for Pneumonia for Mortality within 1 month of Discharge.

◦ Predicted Mortality of 7.32%◦ Actual Mortality of 10.32%◦ Probable causes:

Many of these deaths may have qualified to: Gram- or Aspiration PN which has a much higher

mortality rate Sepsis, which also has a much higher mortality rate Additional MCC/CCs which would have significantly

raised the Predicted Mortality Rate

3 Examples from Healthgrades.com

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A 1% Reduction in all Medicare payment to◦ Hospitals that rank in the lowest 25%. ◦ 721 Hospitals in 2015.

As these hospitals improve their HAC scores there will be a new lowest 25% next year.

The average cut-off score will be lower. It is only by improving your current

performance that you can be safe from a HAC penalty in the future.

Does your hospital know how to do this?

Hospital Acquired Conditions

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Many hospitals with strong positive reputations have HAC Penalties.◦ Doesn’t make sense. Why these sites?

20% of HAC Penalized hospitals are small hospitals with only 1 or 2 HAC scores◦ 2/3rds have only a “Serious Complication Score”

of 8 to 10 and therefore a Penalty.◦ Are these really the poor quality hospitals?

I see hospitals that I would not expect on the list. And others that I have concerns about that have low

HAC scores.

HAC Penalties: Big Red Flag:The Data is Strange!!

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HAC penalties can be due to aggressive, but misguided improvements in clinical documentation.

Goal (until now) has been to document and code anything that might capture an MCC/CC.◦ Hospitals with strong aggressive CDI programs

can be at an increased risk of getting a HAC Penalty.

The Inverse is also true:◦ Hospitals with very low (favorable) scores may

not be capturing legitimate HAC incidents.

HAC Penalties can be inversely related to Clinical Documentation

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Domain 1: Serious ComplicationsBLACK: Purely a clinical factor◦ Postoperative hip fracture rate◦ Postoperative pulmonary embolism (PE) or deep

vein thrombosis (DVT)RED: Documentation / coding issues can influence◦ Pressure Ulcer Rate◦ Iatrogenic pneumothorax rate◦ Central Venous Catheter-related blood stream

infection rate◦ Postoperative sepsis rate◦ Wound dehiscence rate◦ Accidental puncture and laceration rate

Taking a closer look at HAC Penalty Components

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Domain 2: Purely a Clinical Factor◦ MRSA◦ C-DiffRED: Documentation / coding issues can influence◦ CLABSI SIR rate◦ CAUTI SIR rate◦ Surgical Site Infections

In other words:◦ Only 4 are purely “clinical indicators” ◦ 9 indicators may be influenced by how they

are documented and/or coded.

What about Domain 2?

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Domain 2: (35%)◦ CLABSI & CAUTI count equally

Domain 1: (65%) Components are heavily weighted by volume

1. PSI-15 Accidental Puncture or Laceration Rate2. PSI-6 Iatrogenic Pneumothorax Rate3. PSI-12 Post-op PE or DVT RateSorted by volume, in the order above. These are the 3 most significant PSI factors.

Is everything equal?

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No penalty. But just below the cut-off score.◦ At risk for next year if they didn’t do anything

Asked our help

A “10” in Domain 2◦ Driven by Accidental Puncture and Laceration rate◦ Turned out that what was coded as a HAC was a

normal part of the surgical procedures.◦ CDI worked through the Quality Department to

have the doctors document differently.

CFMA Site

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4 of the top 6 CDI sites in WV have HAC Penalties.◦ A fifth on was just below the cut-off

At the other end of the extreme: 7 of the 12 hospitals with the most potential for Clinical Documentation Improvement have low HAC scores

4 of the 8 hospitals in WV with HAC penalties have only a Domain 1 “Serious Complication” score.◦ Placed at greater risk of penalty◦ No off-setting Domain 2 scores

Checking WV Hospitals’ Data

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The small hospitals with only a Serious Complication score of 8-10

The prestigious hospitals with HAC penalties And all the other hospitals with HAC

penalties

Do they have a real quality problem? Or do they have they

documentation/coding problems? Or both?

HAC Penalties

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Clinical Documentation Improvement: The Defining Puzzle Piece

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Clinical Documentation Improvement

Improved CMI/Payment

Clinical Documentation Improvement: The Defining Puzzle Piece

Level of CareDecisions

Clinical Documentation Improvement

Improved CMI/Payme

ntDenials Management

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Core Measures

Clinical Documentation Improvement: The Defining Puzzle Piece

Quality Measurement

ReadmissionsLevel of Care

Decisions

HAC Score

VBP Mortality

Rates

Clinical Documentation Improvement

Core MeasuresImproved

CMI/Payment

Denials Management

Medicare SpendingPer Beneficiary

ICD10-CM

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Clinical Documentation Improvement: The Defining Puzzle Piece

All Quality Measurement

ReadmissionsLevel of Care

Decisions

HAC Score

VBP Mortality Rates

Clinical Documentation Improvement

Core MeasuresImproved

CMI/Payment

Denials Management

Medicare SpendingPer Beneficiary

ICD10-CM

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Bundled Payments

Population Based Payments

Payors

Severity Of Illness

1. It has a great impact on being paid appropriately.

2. Your hospital is measured, evaluated and viewed based on what is captured in coding.

3. Finally, it helps you to know and address the real problems at your hospital.

Why is CDI so important?

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1. Most CDI programs start from a Coding Perspective:

◦ What information is present that if it were clarified in the terminology the coding staff needs would improve the DRG?

◦ 90% of CDI programs operate from this perspective

2. Starting from a Clinical Perspective:◦ “What is clinically happening with this patient and

is it stated in terminology that the coding staff can capture?”

◦ Capturing the full Clinical Complexity of each case◦ Surprising impact on Penalty areas

Two Approaches to CDI

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1. They may have a very strong “coding based” approach with RNs involved.

2. Their measurement systems show considerable improvements from Initial to Final DRG.

◦ But how does your Medical CMI compare to others?

3. Annual auditing may show limited opportunity for improvement.

◦ Is there a need for a fresh pair of eyes?

4. They have software, systems and a long standing relationship with a quality vendor.

1. They feel secure.

Many Hospitals believe they have a strong CDI program

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Despite a strong CDI program and a dedicated staff:

◦ May have inappropriate Readmission Rates

◦ Lower Value Based Purchasing Scores

◦ Higher HAC scores

This may be a false confidence

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1. Traditional Documentation (w/o any CDI guidance). [20% of hospitals]

2. Standard Clinical Documentation Improvement. [70% of hospitals]

a) Improved capture of MCCs & CCsb) Common improvements in Principle Dx

Simple Pneumonia to Gram- or Aspiration Pn UTI or Cellulitis to Sepsis TIA to a CVA

3. Complex Clinical Understanding by CDI Specialists & Clinical Documentation Guidance. [5-10% of hospitals]

4. Complex CDI integrated with Case Management and Quality Departments. [1-2% of Hospitals]

There Are 4 Levels of Clinical Documentation

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Levels of CDI:1. Hospitals without CDI leave 20-30% of

appropriate reimbursement on the table.2. Hospitals with Standard CDI leave 5-15%

of appropriate reimbursement on the table.

3. Hospitals with Complex Clinical training of Documentation Specialists can achieve a full level of reimbursement, but may have some penalties.

4. Hospitals with Integrated CDI efforts can reduce OBS rates, Readmission & HAC penalties, and improve VBP scores.

Impact of CDI on DRG Reimbursement

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1. Greater Level of Clinical Training: Documentation Specialists are trained to clinically analyze each case: What is clinically occurring with this patient

and has the doctor documented it in a way for coding staff to be able to capture it?

Pursuit of a complete clinical picture.

2. Doc Specialists dialogue with the doctors:◦ They understand and grow clinically◦ They set up a continuous quality improvement

environment

3. CDI is integrated with other case management & quality departments.

What are the differences?

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Readmission Penalty 0.94% 0.00%Outcomes Domain 25.00 62.50VBP Payment Adj. -.12% +.77%HAC Penalty -1.00% 0.00%CDI Program for 5 years 10 years

Standard CFMACDI Site CDI Site

Medical Discharges: 1562 1503Cardiac CMI 1.1196 1.0621Medical CMI 1.2106 1.3461Neurology CMI 1.2008 1.1438Pulmonology CMI 1.4533 1.3045Combined Med CMI 1.2491 1.2420

Comparing Medical CMIs of The Two CDI Sites of the same size

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CMI by DRG Groupings:Site Penalty .94% 0%DifferenceHeart Failure: 1.1800 1.1390 +.0410Simple Pn:1.1295 1.2337 -.1042Resp. Inf. (Pn): 1.7374 1.7891 -.0519COPD: 1.0243 .9936 +.0307AMI: 1.3327 1.2052 +.1275Total Joint:2.1422 2.1707 -.0285

Mixed results. What else?

MCC/CC Capture Comparison of the Two Sites

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Percent of all Medical Patients by Dx within the “Complex Medical DRG area”:

Site Penalty: .94% 0% Heart Failure: 5.0% 6.3%Pneumonia: 5.2%4.2%Resp. Infect. (PN) 2.5% 2.4%COPD: 6.6%4.0%Respiratory Failure 2.5%

2.9%Sepsis: 6.2%17.1% Total: 28% 36.9%CMI of Complex DRGs: 1.3071 1.4620

The Real Source of the Difference

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Change in Patient Volumes if CFMA’s %s applied:

DischargesActual Projected

◦ Heart Failure* 60 75◦ Simple Pneumonia* 62 50◦ Respiratory Infection (PN)* 30 29◦ COPD* 70 48

◦ *231 Readmission “Index” actual discharges ◦ *203 Readmission “Index” projected discharges

◦A 14% reduction in “Index” patients The sickest, most likely to be readmitted

How does this impact Readmissions?

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Overall CMI showed little or no opportunity for growth

CC/MCC comparison shows little opportunity But Complex Medical DRGs shows an

opportunity of a .15 increase in CMI◦ For entire hospital this is a .04 increase in CMI

Would help reduce readmission penalty A full clinical picture would improve

“Outcomes Domain” and VBP score HAC penalty may be related to over

aggressive CDI & the need for integration with Case Management and Quality

This site represents a very strong implementation of Level 2 CDI

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No. Existing relationships can be maintained.

Usually the current staff can be trained to operate at a higher clinical level.◦ Some lack the clinical curiosity◦ Others do not want to verbally interact with the

doctors

Some systems limit efficiency / productivity by too much need to input data.

Does a hospital need to start fresh?

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Yes. Some hospitals with high level CDI

programs have Readmission penalties.◦ They are almost always less than 0.50%◦ They are most often related to Total Joint

Replacements and AMI. These Principle Dx are unlikely to change.

◦ They are legitimate Readmission issues. Hospitals vary greatly on Mortality Rates

and Hospital Acquired Conditions◦ What’s the truth?◦ Identify and fix the real problems.

Do you still need task forces to deal with Readmissions, HAC & VBP?

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Clarify the real problem. ◦ Get the patients into the correct DRGs.◦ You may not have a readmission problem.

Unnecessarily reducing re-admissions may cause premature deaths and increase your Mortality Rates.

Unnecessarily reducing re-admissions will reduce your IP volume & net revenue.

Don’t waste your doctors’ valuable time & good will forcing changes where they are not necessary.

Why is Improved Clinical Documentation the essential first step?

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1. Getting to the highest level of Clinical Documentation Improvement is an essential part of reducing Readmission Penalties.

2. Clinical Documentation improves a hospital’s Mortality Rates and VBP scores.

3. An aggressive CDI program will sometimes create a false-positive HAC Penalty.

4. These are complex clinical issues: CDI alone does not solve excessive readmissions or poor quality that lead to high Mortality Rates and Hospital Acquired Conditions.

In Summary

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Questions???

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Contact Information:

David Raymond, MPHPresidentClinical Financial Management

Associatesdraymond@clinicalfinancial.com(248) 773-5006 Office(248) 877-4642 Cell

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