February 20, 2018

Outpatient CDI Programs Grow as Hospitals Move to Value-based Care


There is a definite need for outpatient CDI programs – provided that hospital administration takes the right approach to its development and implementation.

Interest in outpatient clinical documentation integrity (CDI) programs is multiplying as more and more hospital services are moving to the outpatient setting and healthcare reimbursement models are transitioning to value-based methodologies.

Hierarchical Condition Categories (HCCs) are deeply entrenched in many of the value-based reimbursement models, including the Centers for Medicare & Medicaid Services (CMS) Merit-Based Incentive Payment Systems (MIPS). Medicare Advantage programs utilize HCCs as a risk adjustment in the calculation of per-member, per-month payments for beneficiaries with more severe chronic conditions, affording the insurance company higher monthly reimbursement from Medicare.

There is no doubt that complete and accurate clinical documentation is essential for the purposes of reflecting and reporting chronicity of conditions utilized in risk-adjusting and calculating monthly payments. I am all for payers and providers being reimbursed fairly and appropriately for patient care.

On the other hand, hospitals must avoid the temptation of proceeding down the wrong path, with decision-making guiding the development and implementation of outpatient CDI programs.

Implementing Outpatient CDI Programs for the Right Reasons

An effective strategy, regardless of business line, involves developing a strong, logical business model with reasonable purpose and projected outcomes, all fundamental to best-practice standards and principles. These same standards and principles are applicable to the hospital setting, and the business decision to invest in an outpatient CDI program. The C-suite of the hospital must conduct its due diligence with long-range vision and purpose when embarking on the development and implementation of any outpatient CDI initiative. I call on hospital administration to resist the temptation and be persuaded to follow what is currently being preached as outpatient CDI consisting primarily of HCC capture.

A significant limitation in focusing upon HCCs is that HCC reporting always trails a year, meaning what I plant as a seed today produces crop yields next year. What the hospital reports this year in HCCs is recognized in next year’s reimbursement from Medicare Advantage programs. What is lost in limited vision with preoccupied efforts at HCC capture through outpatient CDI programs is the patient: the primary benefactor of consistently solid documentation, in real terms.

Virtually no service can be provided to any patient without a physician order, save a screening mammogram. All service provisions aside from mammograms require a valid physician order, including a covered diagnosis for the ordered service representing medical necessity. While a physician order with a covered diagnosis is essential for all services, it marks only the first step in healthcare delivery.

Since most hospital outpatient services are initiated in the physician office in some form or fashion, good documentation in the physician office outlining substantiating intent and incorporating clinical context and facts of the case is essential to demonstrate medical necessity beyond a reasonable doubt. Solid documentation in the physician office note serves as the foundation for value-based care: reporting the right care at the right time for the right reason in the right venue with the right documentation expressing the right physician clinical judgment and medical decision-making supported by the right plan of care.

Complete and accurate documentation in the physician office note is instrumental in demonstrating the practice of efficient medicine, defined as providing and/or ordering a level of service that is sufficient but not excessive, given the patient’s current healthcare status. In short, effective documentation in the office is the linchpin for describing why the patient is receiving care in the office for each patient encounter, including medical necessity for both the patient visit as well as any services ordered and/or provided as a result of the office visit.

Outpatient CDI: Embarking on the Right Path

 There exists a definite need for outpatient CDI programs, provided that hospital administration takes the right approach to its development and implementation. It is my sincere hope the hospital C-suite does not embark down the same path of inpatient CDI programs, where the main focus of CDI specialists is searching in vain for CCs/MCCs in the name or reimbursement – almost like a dog chasing its tail.

Most CDI programs have not generated additional reimbursement, when you consider ongoing medical necessity denials, clinical validation denials, and DRG downcodes, all dramatically increasing the cost to collect, considering the lengthy appeals process and the required resources to work each account. I am calling on CDI leadership to provide the right guidance and advice in the creation, development, and implementation of a sound outpatient CDI program.

Take what is currently being billed as outpatient CDI services, reject the notion that all that matters are capture of HCCs, and be the driving force in establishing an effective program to the mutual benefit of the patient, the physician, all relevant healthcare stakeholders, and the hospital.


Glenn Krauss is the physician documentation improvement manager at University Medical Center of Southern Nevada. Glenn has more than 20 years of experience as a professional in the field of health information management (HIM). Previously, he held executive and consulting positions, including revenue systems manager, CDI director, director of case management and revenue enhancement, director of HIM, and data quality manager with major U.S. hospital and health systems. Glenn is a member of the ICD10monitor editorial board and makes frequent appearances on Talk Ten Tuesdays.

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