Updated on: November 28, 2016

Are You in Denial of Denials Management?

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Original story posted on: October 31, 2016
All healthcare providers must now be (ICD-10) coding to the highest level of specificity. The ICD-10 flexibilities available during the first year of implementation are gone for physician billing.

As of Oct. 1, 2016, all providers are required to code to accurately reflect the clinical documentation in as much specificity as possible, as per the required coding guidelines.

ICD-10 implementation success is a result of collaboration and leveraging technology, along with education, resource distribution, process redesign, and the introduction of analytics. Just as we experienced with the planning for the successful implementation of ICD-10, we have learned that it takes a team of healthcare colleagues working together and sharing expertise across the continuum of patient care to sustain ICD-10 quality and accuracy. 

The emphasis on the level of specificity needed for compliant coding continues to point to appropriate clinical documentation being present in the medical record. For appropriate reimbursement, organizations must have a clinical documentation improvement (CDI) team working with the medical staff to provide the level of documentation required to substantiate the level of specificity necessary for ICD-10 coding compliance. High-performing teams in the fields of CDI, health information management (HIM), and coding are goal-oriented, carefully monitored, and able to fine-tune their own key performance indicators (KPIs) and leverage technology.

Leveraging technology such as electronic health records (EHRs) brings stakeholders to question the investment, return on investment, and impact of computer-assisted coding (CAC) on improving CDI outcomes and accuracy of coding.

CDI programs have been run with minimal technology since their initial deployment in the mid- 1990s. CAC implementations for use in final discharge coding have generated mixed reviews, from low adoption to outstanding results. Discharge coding in environments that have deployed CAC involve coding professionals who review the medical record to validate and add and/or delete ICD-10 codes for final billing. Many of these CAC hospital sites have integrated CAC into their CDI programs with an HL-7 interface at the time of admission. This gives the CDI team the opportunity to be provided with ICD-10 codes and working DRG assignments as they review the cases. CDI specialists who do not have a coding background find the combination of their clinical skills and suggested codes a real benefit to their day-to-day CDI monitoring.   

CAC in the CDI workflow is an excellent tool for the identification of missing clinical documentation required for coding, without requiring the CDI specialists to become coders. The need for accuracy in the suggested codes is important, but not as critical as the need for final discharge coding review. At the time of final coding, the coders must review the suggested codes, validate, and review to see if anything was overlooked.

CAC technology plays a critical role in the revenue cycle. With a thoughtful, thorough, tailored, and integrated implementation, CAC can address issues that will enable system convergence, enhance monitoring of the coding process, and reduce inefficiencies.



To understand coding results when using CAC, one must understand the generally accepted standard measurements of natural language processing (NLP) accuracy of precision and recall. Precision measures the number of accurate results compared to total results. Higher rates of precision mean fewer false positives, while recall measures the number of accurate results compared to the potential number of accurate results. Higher rates of recall mean fewer false negatives (or missed codes).

If you have CAC/NLP technology in your CDI/coding workflow, then it is imperative that you monitor the precision and recall of your CAC and tuning of your NLP engine for accuracy. This also requires that you tightly manage the validation process. This will become more refined when and if the ICD-10 coding denials from the 2016 fiscal year begin to arrive.

Because of the relatively low number of coding denials since the Oct. 1, 2015 compliance date for ICD-10 coding, it is unknown what the future will bring. There are so many variables to consider when addressing coding denials, including level of specificity of the clinical documentation for diagnoses and procedures; deployment of CAC and use of a natural language processing engine in the CDI workflow, as well as in the final coding workflow; use of encoders and edits; pre-bill claims management and denial management technology in the revenue cycle; and accuracy of coding.  

A clinically driven approach to CDI enables a denials prevention strategy that entails complete and compliant documentation, resulting in more accurate coding and associated reimbursement, compliance, and quality reporting on a real-time basis.

As you continue to refine the future state design, follow the critical path of your CDI program goals that include the use of CAC/NLP technology concurrently, from evaluating appropriateness of the admission to pre-admission authorization processes though the close of the encounter and final billing. You are looking for an end-to-end, patient care-to-payment best practice in your revenue cycle. This will enable you to find new opportunities and creative approaches to streamlining workflows and crafting new ways to leverage your technology investments. Be the champion for the “integrity” of your CDI program, plus all processes and technology solutions that are connected intimately into the EHR workflow, where they will influence clinical documentation as it is created.

Denials of claims represent a significant cost to hospitals and healthcare enterprises. They are not only a loss to the bottom line, but they also negatively impact patient satisfaction. Furthermore, the management of denials and appeals is labor-intensive and time-consuming. Traditionally, denial mitigation processes all occur after the fact, as in once the claim is already dropped. Mid-cycle revenue teams in HIM begin pre-bill denials management, which is effective at catching some of the denials. This pre-bill review with the addition of analytics is the beginning of a new trend in denial mitigation.

Monitoring trends in denials and types of denials is another way organizations can employ analytics. Monitoring trends such as missteps with coding and missing documentation will be a common occurrence as analytics become a critical component in revenue cycle management, with a focus on integrity and a belief in constantly asking who, what, when, where, and why. Identifying the root cause of the denial is your mission.

Technical or coding denials occur as a result of lack of documentation during the patient’s encounter, when diagnoses and interventions must be substantiated by the physician for compliant coding. We cannot automatically assume a relationship between a problem identified and the point of cause. Many providers have attributed denied claims to coding problems when the real issue was incorrect patient demographic information collected during the admission or registration process. According to Advisory Board, 67 percent of denials are recoverable and 90 percent are preventable.

  • Some pre-bill tips for denial prevention include the following:Create pre-bill edits that flag cases for an additional level of supervisor review.
  • Review and monitor the top 25 ICD-10 diagnoses, not just denied claims.
  • Review DNFB daily with CDI and coders.
  • Engage your medical staff and enforce ICD-10 specificity.
  • Continuously monitor and audit ICD-10 coding by physician, coder, clinical department, nursing unit, etc.
  • Monitor precision and recall CAC-suggested codes.
CAC assists us in the coding validation process and helps us identify the source of supporting documentation that is often called into question when a claim is denied. The deployment of CAC can therefore serve as a critical success factor to your regulatory compliance and coding compliance program. CAC can serve as a key source of technology in your denials prevention program as well.

By focusing on continuous quality improvement, with a transformation in clinical coding from native coding only to coding validation of suggested CAC codes, we can be assured to see a shift in the way CDI and coding professionals perform the critical work required for compliant coding based on the integrity of the clinical documentation.

About the Author

Bonnie is a managing director of advisory services for nThrive, focusing her efforts on advancing clinical documentation integrity and health information governance.

Bonnie is the 2016 past chair of the Board of Directors for The Commission on Accreditation for Health Informatics and Information Management (CAHIIM) and is a former president of the American Health Information Management Association (AHIMA), having served as the 2011 chair of the Board of Directors. She is also a fellow of AHIMA and an AHIMA Academy ICD-10-CM/PCS certificate holder and ICD-10 ambassador. Ms. Cassidy is also a fellow of HIMSS and an advanced member of HFMA.

Bonnie was honored to be the recipient of the 2014 Distinguished Member Triumph Award from AHIMA and the 2015 Distinguished Member Award from the Georgia Health Information Management Association. Bonnie is also a recipient of the Distinguished Member Award from the Ohio Health Information Management Association.

Prior to joining nThrive, Bonnie served as an executive with Nuance, QuadraMed, the Certification Commission for Healthcare Information Technology (CCHIT), Price Waterhouse, and Ernst & Young, and she was an HIM administrator at two major teaching hospitals, including the Cleveland Clinic Foundation.

Contact the Author
Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Bonnie S. Cassidy, MPA, RHIA, FAHIMA, FHIMSS

Bonnie Cassidy is a leading HIM executive advisor, focusing her efforts on advancing clinical documentation integrity, risk-adjusted reimbursement, and health information governance. Cassidy was the 2015 chair of the Board of Directors for The Commission on Accreditation for Health Informatics and Information Management (CAHIIM) and the 2011 President /Chair of AHIMA. She is also a fellow of AHIMA, an AHIMA Academy ICD-10-CM/PCS certificate holder, and an ICD-10 ambassador, as well as a fellow of HIMSS and an advanced member of HFMA. Cassidy was honored to be the recipient of the 2014 Distinguished Member Triumph Award from AHIMA and the 2015 Distinguished Member Award from the Georgia Health Information Management Association. She is also a recipient of the Distinguished Member Award from the Ohio Health Information Management Association.

 Bonnie Cassidy has served as an executive with nThrive, Nuance, QuadraMed, the Certification Commission for Healthcare Information Technology (CCHIT), Price Waterhouse, and Ernst & Young, and was a HIM administrator at two major teaching hospitals, including the Cleveland Clinic Foundation. She is a member of the ICD10monitor editorial board and makes frequent appearances on Talk Ten Tuesdays.

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