Cath Lab Digest

Healthcare providers today are confronted by several complex financial challenges, including limited access to capital due to market and economic uncertainty and increasing constraints from payors, including Medicare and Medicaid. These challenges have resulted in more closely monitored and generally decreasing payments for patient care. Thus, these same factors are forcing providers to focus on better internal financial processes as a proactive means for managing organizational costs and achieving optimal financial health and sustainability.

One such opportunity lies in improving and maintaining proper and accurate physician/provider documentation and coding practices to ensure maximum reimbursement from external payors. Corazon suggests that healthcare providers remain cognizant of all changes to Medicare reimbursement, in addition to payment changes from other payors. The Centers for Medicare and Medicaid (CMS) publishes an update to the Inpatient Prospective Payment System (IPPS) Rule annually, which outlines changes in Medicare payments to hospitals.

FY2012 IPPS Updates

The fiscal year (FY) 2012 Final Rule for the IPPS indicates hospitals will receive a total net increase of 1% to the standardized Medicare payment amount, also known as the market basket. In FY2008, CMS modified the Medicare Diagnosis Related Group (DRG) payment structure (consisting of 538 DRGs) to better reflect patient severity/acuity levels and transition from a charge-based structure to a cost-based structure, resulting in the creation of 745 Medical Severity Diagnosis Related Groups (MS-DRGs). Accurate documentation and coding of MS-DRGs is imperative, especially given that appropriate reporting of severity of illness requires correct classification of the principle diagnosis, secondary diagnoses, co-morbid conditions, and Present-on-Admission (POA) indicators.

Other changes to the FY2012 IPPS Final Rule include the addition of two non-cardiovascular MS-DRGs (bringing the total up to 751 MS-DRGs), and reassigning aneurysm repair procedure codes, which may have particular relevance to some cardiac cath labs. The repair codes 38.45 (resection of vessel with replacement, thoracic vessel) and 39.73 (endovascular implantation of graft in thoracic aorta) will be removed from MS-DRGs 237 and 238, and added to the higher-paying MS-DRGs 216, 217, 218, 219, 220, and 221 (the collective groups of cardiac valve and other major cardiothoracic procedures). Accordingly, the title for MS-DRG 237 will be revised to read “Major Cardiovascular Procedures with MCC” (previously titled “Major Cardiovascular Procedures with MCC or Thoracic Aortic Aneurysm Repair”), but the MS-DRG 238 title (“Major Cardiovascular Procedures without MCC”) will remain unchanged.

The overall FY2012 IPPS financial forecast for cath lab-related MS-DRGs is quite positive. In nearly all categories, the majority of codes show an increase in the payment rates from FY2011, and every cath lab-related MS-DRG category shows an increase in reimbursement. This can be attributed to some increases in relative weights, which are assigned to each MS-DRG and multiplied by the standard Medicare base rate (the FY2012 base rate is $5,631.16). Table 1 summarizes the FY2012 weighted average cath lab-related MS-DRG category reimbursement rate changes.

Risks of Improper Documentation and Coding

For hospital cath labs to benefit from this increased reimbursement, they must make every effort to ensure their physicians understand and execute specific documentation processes, and their coding and finance staff properly assign codes and bill accurately. Payments received by hospitals are directly linked to proper documentation and coding of procedures. This means that hospital-reported financial data would reflect billed codes and the level of severity applied to the codes. Deficient documentation and coding may not only negatively affect reimbursement, but also the quality scores that are calculated and reported by organizations such as the American College of Cardiology and HealthGrades. Negative quality scores in one key service such as cardiovascular can significantly impact patient perception of the total hospitals’ quality-of-care and may consequently result in potentially lower volumes to those low-performing hospitals.

In the case of a small, rural hospital located where word-of-mouth is a major method of marketing and patient referrals, poor reported PCI quality scores would be extremely detrimental to attracting future cardiac patients.

Common Mistakes

There are various contributing causes of incomplete or perhaps improper physician documentation and hospital coding practices. The typical process flow in most hospitals involves the initial notation and/or dictation of a patient’s specific case details into a medical record by a physician. The hospital’s coding department or dedicated unit coding specialist will then abstract and analyze the chart for completeness and accuracy, and organize pertinent case information into procedure codes. Often, the finance department will then translate this information into billing codes to be submitted to payors for reimbursement. All steps in this flow are critical for each succeeding step to ultimately capture correct and complete codes.