It is Time to be Change-Hardy with the new IPPS Proposed Rules

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Original story posted on: May 22, 2017
Be adaptable and ready for change if you are responsible for payer reimbursements in your healthcare organization. The Centers for Medicare & Medicaid Services (CMS) has announced a large number of changes to diagnosis-related groups DRGs for 2018, along with changes in ICD-10-CM and PCS. Here is a quick summary of the changes:

  • 264 MS-DRGs have a negative adjustment
  • 488 MS-DRGs have a positive adjustment
  • 45 requests for changing a code or group of codes from DRG operating room(OR) procedure to non-OR procedure designation

Hospitals and other providers have been expecting CMS to adjust MS-DRGs based on its data analysis of a full year of ICD-10 information. The proposed changes will affect discharges occurring on or after Oct. 1, 2017, which is the start of the 2018 federal fiscal year.

Your organization’s preparation for changed DRGs should start with the basics:  

  • Understand your existing case mix index (CMI) and top DRGs
  • Fine-tune your staff’s skills with education
  • Determine that your documentation is complete for each admission and visit
  • Set your sights on the integrity and consistency of documentation throughout the organization

To analyze the effect of the changes, use our Top 5 list to begin, and to develop actions you can take today to avoid denials and prepare:

  1. Determine how to approach your analysis:
    • Track your top-dollar DRGs
    • Examine your top 25 DRGs
    • Examine DRGs with complications or comorbidities (CC) or a major complication or comorbidity (MCC).
    • Examine DRGs that have no CCs or MCCs

  2. Considering recent denials and DRG downgrading, complete a review or an audit to ensure that your organization is meeting today’s guidelines and prepare for 2018

  3. Evaluate your coding team skills on ICD-10-CM, PCS, and DRGs
    • Provide education and measure the success of your education efforts

  4. Ensure that your clinical documentation is supporting optimum coding

  5. Ensure that your coding team is making the critical link between documentation and coding
    • If not, complete education to improve skills

You want to help your entire team understand changes that affect reimbursement. Remember to include the clinical documentation integrity (CDI) and utilization management (UM) teams in the education.

To ensure that your coding team is linking documentation to optimum coding, educate the team on ICD-10-CM and PCS, and DRGs. Provide the training and measure team skills before and after education refreshment. Staff education is frequently targeted during budget cuts, but recognize the important relationship between coding skills and your organization’s reimbursement.

The relationship between case mix index (CMI) and DRGs is important to monitor in order to understand impacts to CMI. Monitor your DRGs and ensure that your clinical documentation integrity (CDI)and coding teams understand how important accurate coding is to the financial health of your organization.

Reimbursement and health information management (HIM) managers must be change-hardy to succeed. In today’s changing healthcare environment, where the one constant is rapid change, remain alert to trends in CMI and DRGs, since it has an affect your reimbursement.
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.
Laurie A. McBrierty, MLT ASCP, CICA

Laurie McBrierty brings nearly 30 years of experience in healthcare, healthcare information systems, and product management to Career Step, where she drives the product management of the company’s offerings. Prior to joining Career Step, Laurie served in various executive positions with companies such as xG Health Solutions, WellPoint, Resolution Health, QuadraMed, Kaiser Permanente, SoftMed, 3M HIS, and Stanford Health Services. She has also served on various boards and committees within the American Health Information Management Association (AHIMA) and is a respected leader in health information management. Laurie holds a bachelor’s degree in Information Systems Management from the University of San Francisco.

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