Published 10/1/2015
Michael R. Marks, MD, MBA

Hospital Dollars and ICD-10 Documentation

Clinical details may drive physician compensation

An increasing number of orthopaedic surgeons are employed by hospitals or academic institutions. If you are among them, understanding the connection between your hospital paycheck and the detail of your clinical documentation is critical. In fact, your future income may depend on it.

Follow the (ICD-10) money
Most hospital-employed physician income is based on work relative value units (wRVUs) multiplied by a conversion factor. Although wRVUs don’t vary by organization, the conversion factor does. Hospitals may base conversion factors on region, market, and the organization’s ability to pay surgeons (within the confines of fair market value).

When hospital collections are healthy and stable, the organization may be able to offer its physicians a higher conversion factor under its compensation plan. If collections are anemic, conversion factor increases are a pipedream.

Physician documentation has a direct impact on the hospital’s collections because documentation drives the selection of diagnosis and procedure codes and diagnostis-related groups (DRGs), which determine how much a hospital is paid for a case. When physicians articulate and document the right level of detail about the patient’s condition, hospital coders are able to choose all (not just some) of the correct diagnosis codes. When that happens, the hospital can potentially be reimbursed more—sometimes $500 to $2,000 more per case. That matters a lot if the physician performs 300 surgical cases each year.

Conversely, if the physician’s documentation is not crisp and ICD-10 ready, the coders don’t have the right details to select the right codes that support the procedures and DRG being billed. As a result, the hospital claim is rejected or the hospital is paid less.

In other words, vague documentation hits your employer right in the pocket book. And a thinner hospital pocket book ultimately results in lower physician incomes.

It’s all about the revenue cycle
Whether the care is delivered in a hospital, ambulatory surgery center, or a physician practice, there is a best practice process for coding and processing a claim so that it is paid accurately, optimally, and in a timely manner. That’s the revenue cycle process, and with ICD-10, the physician’s role in this process has never been more important.

It is the detail that physicians provide in their documentation that enables the coding team to accurately choose ICD-10 codes. These ICD-10 codes support the procedure code and the DRG categorization. When all of these codes are properly selected, documented, entered into a claim form, and transmitted to a payer, the harmonious result is a properly paid claim.

Table 1 shows an example of such detail, relevant to documenting ankle pain under ICD-9 versus ICD-10. Notice the need for documenting laterality, and the nuanced differences between the italic text documentation for ICD-9 versus the underscored text documentation for ICD-10.

Speaking of details, here’s another that is related to ICD-10 documentation. In ICD-10, “Unspecified” has a significantly different meaning than “Other.” Unspecified means that it wasn’t stated, while Other means that the definition was more specific and couldn’t be classified with the available sets of codes for the condition. If your documentation does not support the use of Other, not only might the coders miss an otherwise billable diagnosis code, the one they do use could potentially fail an audit.

For example, a patient undergoes surgery and then goes into shock. Based on the dictation provided, the coder could select from the following diagnosis codes:

  • Hypotension, unspecified
  • Hypovolemic shock
  • Post-procedural shock, unspecified (When queried, the physician meant the patient was in hypovolemic shock, but didn’t use those specific words.)

Documenting the type of shock (other shock) rather than leaving it to be coded as “shock, unspecified” can result in a hospital payment difference of thousands of dollars.

This is the revenue cycle at work and your role in it. When the coding team is not provided with the right level of documentation, the time they must spend querying physicians is a productivity drain and an annoying distraction for everyone. If you document the right level of clinical detail in the first place, your chances of receiving a delinquency slip or being stalked by coders with questions will decrease precipitously.

Take an active role
The physician’s role in the revenue cycle process is so integral to achieving ICD-10 implementation success that many hospitals are launching Correct Documentation Initiatives (CDI) to educate physicians about how to improve their documentation. The Academy and Karen Zupko and Associates also offer ICD-10 education. Regardless of the education you choose or are offered, active physician participation in the learning process is vital to success.

One of the most effective producers of “aha!” moments is when physicians review code maps of their commonly used diagnosis codes, with side-by-side comparisons of the documentation required in ICD-9 and ICD-10. Like the ankle pain example in Table 1, this comparison exercise is a quick way to clearly show how documentation must be modified.

Providing physicians access to an electronic health record test environment during educational sessions and allowing them to practice looking up ICD-10 codes for commonly encountered diagnoses are also important. Hospitals considering a CDI initiative should talk with their information technology department to arrange this.

CDI education is effective in improving documentation, according to early analysis. Reviews of physician documentation after CDI education demonstrate that physicians and coders capture and code DRG data that previously was not reimbursed at all. The University of Mississippi Medical Center (UMMC) used its orthopaedic department as a CDI pilot group beginning in 2013.

By early 2015, orthopaedics demonstrated a substantial decrease in unspecified code usage and a corresponding increase in overall diagnosis code capture, leading to a 9 percent increase in the capture of complexities and comorbidities. The case mix index (CMI) for orthopaedics improved 23 percent. A critical factor in the success of this project was the collaborative environment at UMMC, which included sharing documentation deficiencies and physician delinquency rates, and stressing the importance of avoiding unspecified diagnoses.

Documenting the clinical elements of a patient’s condition and treatment plan has always fallen squarely upon the shoulders of physicians. Good clinical documentation is part of being a good doctor, and it’s always been important for getting paid for services delivered. With ICD-10, the clinical details may be more granular, but making and practicing the documentation switch is not that difficult. For employed orthopaedic surgeons, the results of these efforts will be a giant leap forward for the employer’s revenue cycle efforts and potentially the surgeon’s compensation as well.

Michael R. Marks, MD, MBA is an orthopaedic surgeon who consults and teaches on practice management and reimbursement issues. He is the founder of Marks Healthcare Consulting and is currently a senior consultant and ICD-10 coding educator for KarenZupko & Associates, Inc.