www.pwc.com Computer Assisted Coding (CAC) Background and Related Information
Computer Assisted Coding (CAC) - Agenda Topic Page # Background 3 Challenges and Opportunities 8 Market Vendor Summary 24 Coding Compliance and CAC 29 Clinical Documentation Review and SMART 35 Next Steps 40 Confidential Information for the sole benefit and use of s Client. 2
CAC Background Confidential Information for the sole benefit and use of s Client. 3
Core Technology *CAC natural-language processing (NLP) applications Scrutinize and interpret unstructured clinicians notes using specialized linguistic algorithms, extracting the clinical facts that support the assignment of codes. Electronic document is sent to an NLP coding engine, the engine reads the document and selects potentially applicable codes and then goes to coding/him for validation. CAC Structured (Codified) Input Structured input applications integrate the coding into the clinical documentation process, producing clinical documents with embedded codes Confidential Information for the sole benefit and use of s Client. 4
How Deployed Cloud-based (also known as SaaS or Software-as-a-service) Local installation requirements are minimal. CAC products often include a number of different modules to provide a complete coding work-flow solution, including coding review, production monitoring, management reporting, coding automation and auditing. Data interfaces are required to feed the clinical documentation into the CAC application and accept the coded data into the organization s billing system. Conventional client-server software install Web services are also an option for some environments, particularly if an existing programming interface is available. The output of the CAC work flow is coded records, including the CPT and ICD- 9 coding and other information needed to file a complete claim, such as modifiers, units, code linkage, patient demographics and payer demographics. For optimum work flow that does not require data entry, the coded data transfers directly from the CAC system into the billing system. Note: deployment methodology can also impact pricing structure such as paying per claim (typical with SaaS) versus a perpetual license fee (typical with conventional install) Confidential Information for the sole benefit and use of s Client. 5
CAC Implementation Progress Implementation Progress Service Area Early Adoption Market Interest Product Usage Wide Spread Adoption Outpatient Inpatient Confidential Information for the sole benefit and use of s Client. 6
Common Market Perceptions Misperception of what CAC is Does not replace staff Replaces Coding Staff CAC does not code the record, it SUGGESTS codes Increases the CMI Not enough data to verify CAC vendor selection is not dependent on Grouper/Encoder/Abstracting Technology Grouper/Encoder was cool 10 years ago All related applications not required to be supplied by one vendor Abstracting is a separate function Computer Assisted Coding can be a separate system Compliance Tool Confidential Information for the sole benefit and use of s Client. 7
CAC Challenges and Opportunities Confidential Information for the sole benefit and use of s Client. 8
Assumptions Successful use of Computer Assisted Coding is based on the premise that the technology is properly mapped to read the record and apply the necessary code recommendations to the coding professional. Tune the Engine Ability of the engine to learn and be tuned is critical to accuracy of output CAC can be considered to Google-ize the record Even in a totally electronic record environment, the more consistency in the format of notes, the better the outcomes of an electronic review (an application of rules) of that record. (Physician resistance to standardized notes?) Consistency in the record can affect the accuracy of NLP (for instance physicians with different documentation styles) Confidential Information for the sole benefit and use of s Client. 9
Challenges Coder Knowledge is Still Required Inexperienced coders are more likely to rubber stamp CAC outcomes Incorrect NLP context goes unrecognized (i.e. opiate substance abuse vs. prescribed pain control) Assumptions may be made that nothing was missed by CAC Implementation Impact on Coder Productivity Learning Curve Coder lack of trust in the CAC technology Hybrid records impact productivity/outcomes (NLP does not read hand written notes) Independent Compliance Reviews Remains Best Practice Astute supervisory personnel who understand both CAC and compliance CAC does not replace the facility requirements related to accurate billing/compliance policies and procedures in fact some would argue it increases the need Confidential Information for the sole benefit and use of s Client. 10
Challenges Scenarios of CAC inconsistency to think about Confidential Information for the sole benefit and use of s Client. 11
Challenges - Scenario 1 Background Patient admitted due to acute cholecystitis. Patient underwent laparoscopic cholecystectomy. After the procedure, progress notes documented that the patient fell and was found on floor with bleeding from back of head. Subsequent CT scan documented subarachnoid hemorrhage. Progress notes and discharge summary documented the patient had head trauma due to the fall. Confidential Information for the sole benefit and use of s Client. 12
Challenges - Scenario 1 CAC Coding & Financial Impact Additional diagnosis coded was 431 Intracerebral hemorrhage, Revised to diagnosis code 852.01 Subarachnoid hemorrhage following injury without loss of consciousness, POA = No Also added E884.4 and E849.7 to indicate fall from bed, residential institution, POA = No. Reimbursement effect: $6,000 overpayment to hospital Confidential Information for the sole benefit and use of s Client. 13
Challenges - Scenario 2 Background Patient admitted due to atherosclerosis of lower extremity and gangrene of foot. Surgery consult and numerous progress notes as well as discharge summary documented atherosclerosis, foot ulcer, gas gangrene. Patient had below knee amputation Confidential Information for the sole benefit and use of s Client. 14
Challenges - Scenario 2 CAC Coding & Financial Impact PDx code revised from 440.24 Atherosclerosis native artery with ischemic gangrene, to PDx diagnosis code 440.29 Atherosclerosis of native artery, other. Secondary diagnosis code added: 040.0 Gas gangrene, consistent with physician documentation Gas gangrene is excluded from 440.24 per the ICD-9-CM code book exclusion notes and Coding Clinic 1Q 1995 pg 11. Reimbursement effect: $4,000 underpayment to hospital Confidential Information for the sole benefit and use of s Client. 15
Challenges - Scenario 3 Background Patient admitted with inflamed mass of the abdomen. Physician s dictated operative report documented that necrotic skin was excised from the subcutaneous tissue on the abdomen. Post-op note also documented excision of necrotic tissue. Surgeon progress notes several days later documented pathology findings of infected epidermoid inclusion cyst of the abdomen. There does not appear to be documentation of benign neoplasm of soft tissue of the abdomen. Confidential Information for the sole benefit and use of s Client. 16
Challenges - Scenario 3 CAC Coding & Financial Impact Correct Principal Diagnosis code revised from 215.5 Benign neoplasm soft tissue abdomen, to new Principal Diagnosis code 706.2 Sebacceous cyst, consistent with physician and pathology documentation of epidermoid inclusion cyst. Reimbursement effect: $5,000 overpayment to hospital Confidential Information for the sole benefit and use of s Client. 17
Challenges - Scenario 4 Background A 25 year old patient was admitted due to uncontrolled diabetes mellitus, type II. Patient history: automobile accident with spinal injury several years PTA. Physician stated severe back pain controlled with methadone. All progress notes document degenerative disc disease-ddd-chronic due to back injury, methadone for pain. There was no documentation that the patient was receiving methadone due to heroin addiction, nor that the patient was "drug seeking" or addicted to methadone. Confidential Information for the sole benefit and use of s Client. 18
Challenges - Scenario 4 CAC Coding & Financial Impact Incorrect secondary diagnosis code 304.01 Opioid dependence-continuous was originally assigned. Correct SDx diagnosis code should have been V58.69 Long term current use of medication-other, consistent with medical record documentation and consistent with ICD-9-CM code book inclusion note for V58.69: Includes: Long term current use of methadone for pain control Reimbursement effect: $0 for hospital, potential significant adverse patient effect due to use of opoid dependence code on bill sent to insurance company. Confidential Information for the sole benefit and use of s Client. 19
Challenges - Scenario 5 Background Patient admitted due to increased falling, slurring of speech. Workup documented metastatic lesion to brain as the cause of presenting symptoms. Radiation oncologist documented Stereotactic Radiosurgery procedure performed prior to discharge with planned follow-up radiation as an outpatient. Confidential Information for the sole benefit and use of s Client. 20
Challenges - Scenario 5 CAC Coding & Financial Impact Additional procedure codes 92.30 Stereotactic radiosurgery unspecified, and 93.59 Application of stereotactic heat frame, should have been added based on radiation oncology documentation, and Coding Clinic 4Q 1998 pg 79. Reimbursement effect: $9,500 underpayment to hospital Confidential Information for the sole benefit and use of s Client. 21
Opportunities Productivity CAC pre-reads the chart and provides suggested codes for review and approval to potentially increase the speed of the coding process in a receptive environment. Consistency & Accuracy Rules-based evaluation of the documentation and programmed application of codes has the potential of creating more consistent outcomes once tuned to hospital coding practices Facilitating the Transition to ICD-10 Properly programmed to match rules to procedure and diagnosis codes, a rules-based NLP engine can have a significant positive impact on the transition to ICD-10 Can potentially reinforce ICD-10 training of coding staff Depending on vendor, CAC may provide the opportunity to perform modeling of both ICD- 9 and ICD-10 Confidential Information for the sole benefit and use of s Client. 22
Accuracy and Productivity Outcomes (Vendor Reported) Productivity Improvement Inpatient > 30% Outpatient 50% to 100% Coding Quality Improvement > 10% Reduce Coding Related Denials > 20% A/R Days Improvement 5 60 Days Reduction of Total Cost to Collect > 40% Anticipated Revenue Increase 3% to 5% Confidential Information for the sole benefit and use of s Client. 23
CAC Market Vendor Summary Confidential Information for the sole benefit and use of s Client. 24
Partial List of Key Vendors-Self-reported Capabilities Key Vendor Confidential Information for the sole benefit and use of s Client. Description 3 M 3M offers integrated solutions for transcription, speech recognition, clinical documentation improvement, documentation management, computer-assisted coding, quality, and revenue cycle management, effectively meeting the industry's changing needs Dolbey Innovative Health Solutions, LLC M*Modal (formerly MedQuist) * Please note, 3M recently purchased CodeRyte leader in providing dictation, transcription, speech recognition and coding solutions for healthcare in the United States and Canada. Together, Dolbey and Company, Inc. and Dolbey Systems, Inc. offer the award winning Fusion Suite of integrated products Innovative Health Solutions, LLC develops Web based coding, compliance, reimbursement, and information management solutions to healthcare providers, information technology vendors, and managed care organizations. Its products include CDM FOCUS, an automated system that provides a set of tools to ensure optimum coding, compliance, and reimbursement; Clinical Coding Expert, a solution that support to code, abstract, and analyze inpatient and outpatient medical records; APC FOCUS, an automated and Web-based chart selection system for providers and consultants to ensure coding accuracy and compliance; and DRG FOCUS, an automated chart selection system that complements encoder use in providers or by outside consultants M*Modal is a leading provider of clinical transcription services, clinical documentation workflow solutions, advanced cloud-based Speech Understanding technology, and advanced unstructured data analytics. 25
Partial List of Key Vendors-Self-reported Capabilities Key Vendor Optum (A-Life Medical / Ingenix) Precyse Solutions Description Optum is an information and technology-enabled health services platform serving the broad health marketplace. A-Life uses its proprietary and patented Natural Language Processing (NLP) technology, LifeCode, to decipher electronic transcribed patient encounters via the Internet through its data center. These documents are then appropriately coded for reimbursement purposes. A-Life s NLP technology utilizes proprietary knowledge bases which contain tens of millions of facts to automate the coding process. PrecyseCode is the industry's first computer-assisted and NLC-driven intelligent workflow solution, enabling productivity increases of up to 20-50%. PrecyseCode features computer-assisted coding that uses NLC to create the patient's clinical story, allowing for the assignment of appropriate, compliant ICD-9 and ICD-10 codes, and SNOMED clinical terminology. NLC is achieved through the unique combination of M*Modal contextual understanding technology with Precyse's collaborative technology platform and extensive coding and clinical documentation expertise. Nuance-Quantim Quantim, the Health Information Management (HIM) business of QuadraMed, is a provider of leading information technology solutions for the healthcare industry. Working closely with industry partners, including electronic healthcare record (EHR) providers, Nuance and Quantim will ease healthcare providers transition to ICD-10, while preserving clinician productivity and document workflows and, most importantly, ensuring the quality of patient care. Confidential Information for the sole benefit and use of s Client. 26
Coding Compliance and CAC Confidential Information for the sole benefit and use of s Client. 27
Coding Outcomes Touch Every Part of Revenue Cycle Contract Management Start: Patient Access Appeals Scheduling/ Registration Cert Payment Posting Financial Counseling Rejection Processing Encounter Charge Capture Coding Third Party Followup Claims Submission Confidential Information for the sole benefit and use of s Client. Medical Record Docume ntation Utilization Review 28
Coding Compliance and CAC: Automating the coding process increases the need for coding compliance The need is greater with the implementation of new CAC systems, as hospitals adjust NLP rules to match their desired outcomes. (e.g. HAC and POA indicators) ICD-10 code accuracy and compliance with coding guidelines as well as medical necessity will be scrutinized closely by payers when implemented in 2014 Hospital and physician quality measures can be negatively affected under ICD-10 if codes assigned are not specific, accurately reflecting the documentation in the record Robust compliance process is necessary for both Inpatient and Outpatient services to protect the hospital from inadvertent incorrect code assignments Confidential Information for the sole benefit and use of s Client. 29
CAC Compliance Initiatives Increases when average amount of time to code decreases Due to elimination of document sorting, storage and retrieval, duplicate identification, code lookup and selection, code ordering, or data entry Productivity Accuracy Coding output matches both official guidelines and payer reporting requirements Decrease in denials, reduction in audit discrepancies, and finding lost charges that were previously under-coded Assures that an organization captures all the charges that it is entitled to collect Improved Coder efficiency Consistency Ensures that guidelines are applied similarly over time and across multiple coding resources. Instills confidence in the coding results, supporting accurate clinical and financial analysis. Connectivity through centralized interfaces Confidential Information for the sole benefit and use of s Client. Transparency Enhance the manageability of the coding process by providing evidence of the workflow and thought processes that went into coding results. Links to assigned codes and associated record Audit trail of changes to coding 30
CAC Potential issues that can result in non-acceptance of System Usage & Implementation Computer Assisted Coding Hospital limitations and Related User Uneasiness Hospital Limited Inpatient Department Coding capability i.e., certain hospitals can only implement in Radiology and Emergency Departments due to lack of coding capabilities in other departments Technology limitations within the clinical setting specialty / subspecialty specific. Minimal financial data on Return on Investment (ROI) which makes it hard to justify for forecasted hospital budget. Coder staffing issues associated around Coder redeployment to mission critical tasks Limited hospital assurance that Computer Assisted Coding Vendor has the capability to address CMS and AMA coding rules and guidelines - current medical reimbursement environment is complex and ICD-10 implementation will make it difficult to universally automate the process User Need to constrain the clinical documentation through use of a template driven system, often viewed by the clinical user as confining and limited. Professional Coder error rate will increase with ICD-10 implementation and related complexity of codes used Vendors and Payers do not indemnify providers against noncompliant coding from CAC CAC depends on coder input which could result in compliance and/or quality issues if input is consistently incorrect Confidential Information for the sole benefit and use of s Client. 31
CAC Clinical Documentation Confidential Information for the sole benefit and use of s Client. 32
Can CAC Automate the Process of Clinical Documentation Review? Measuring CDI Outcomes after October 1, 2014 - Consider ICD- 10/PCS Influence on Processes Confidential Information for the sole benefit and use of s Client. 33
CAC Clinical Documentation CAC may assist CDI staff by assigning potential diagnosis codes and working DRGs based on dictated admission information provided by the healthcare provider (e.g. emergency room dictation, admission history-physical exam, consultations) CAC may assist CDI staff in selection of appropriate procedure codes based on physician dictated reports (e.g. operation, interventional procedures, etc.) This capability can lead to less time required by CDI staff to perform original coding and focus documentation efforts towards content of the record ICD-10 implementation for CDI staff may result in a lower loss of productivity through use of CAC technology implemented from the time of admission Confidential Information for the sole benefit and use of s Client. 34
Questions? John W. Ruth Director, Health Industries Advisory PricewaterhouseCoopers LLP (312) 298-3190 John.W.Ruth@us.pwc.com Mary Phelps Director, Health Industries Advisory PricewaterhouseCoopers LLP (704) 344-7577 Mary.Phelps@us.pwc.com Confidential Information for the sole benefit and use of s Client. 35
References AHIMA Delving Into Computer-Assisted Coding (AHIMA Practice Brief) AHIMA Automated Coding Workflow and CAC Practice Guidance AHIMA CAC 2010-11 Industry Outlook and Resource Report Bounos, Maria, RN, MPM, CPC-H, Wolters Kluwer Law & Business Evaluating Computer Assisted Coding Systems & ICD-10 Readiness MedQuest The Impact of Computer Assisted Coding, a white paper Morsch, Maria MS; Kaul, Rebecca, MISM, MBA; Briercheck, Scott, MSC; A- Life Hospital, LLC Hospital Based Computer Assisted Coding a New Paradigm SMART Learning Series Confidential Information for the sole benefit and use of s Client. 36