Updated on: July 30, 2019

What’s in a Diagnosis Code?

Original story posted on: July 26, 2019

Some payers will take back the fee-for-service payment if the wrong diagnosis code is selected.

There have been many conversations had since the healthcare industry moved to ICD-10-CM, and many more guidelines developed regarding when to query a physician, which has sparked even more debate.

Guideline 19 in ICD-10-CM states:

“The assignment of a diagnosis code is based on the provider’s diagnostic statement that the condition exists. The provider’s statement that the patient has a particular condition is sufficient. Code assignment is not based on clinical criteria used by the provider to establish the diagnosis.”

But, in fact, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) has weighed in on the importance of provider documentation through risk adjustment programs. The italicized excerpts below indicate their review and ongoing work of hierarchical condition category (HCC) coding for Medicare Advantage programs:

Medicare Advantage (MA) organizations submit to CMS (the Centers for Medicare & Medicaid Services) diagnoses on their beneficiaries; in turn, CMS categorizes certain diagnoses into groups of clinically related diseases called hierarchical condition categories (HCCs). For instances in which a diagnosis maps to a HCC, CMS increases the risk-adjusted payment. CMS has designed its Medicare Part C systems to capture the necessary data in order to make these increased payments to MA organizations. As CMS transitions to a new data system to make these payments, OIG will conduct analysis to inform both use of current systems and the transition to a new system. We will review the continuity of data maintained on current Medicare Part C systems. Specifically, we will review instances in which CMS made an increased payment to an MA organization for a HCC and determine whether CMS's systems properly contained a requisite diagnosis code that mapped to that HCC.
Payments to Medicare Advantage organizations are risk-adjusted on the basis of the health status of each beneficiary. Medicare Advantage organizations are required to submit risk adjustment data to Centers for Medicare & Medicaid Services in accordance with Centers for Medicare & Medicaid Services instructions (42 CFR § 422.310(b)), and inaccurate diagnoses may cause Centers for Medicare & Medicaid Services to pay Medicare Advantage organizations improper amounts (Social Security Act §§ 1853(a)(1)(C) and (a)(3)). In general, Medicare Advantage organizations receive higher payments for sicker patients. Centers for Medicare & Medicaid Services estimates that 9.5 percent of payments to Medicare Advantage organizations are improper, mainly due to unsupported diagnoses submitted by Medicare Advantage organizations. Prior OIG reviews have shown that medical record documentation does not always support the diagnoses submitted to Centers for Medicare & Medicaid Services by Medicare Advantage organizations. We will review the medical record documentation to ensure that it supports the diagnoses that Medicare Advantage organizations submitted to Centers for Medicare & Medicaid Services for use in Centers for Medicare & Medicaid Services' risk score calculations and determine whether the diagnoses submitted complied with Federal requirements. https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000150.asp

From a provider standpoint, we have taken a backseat, being as in most situations regarding risk adjustment coding, our best opportunity for receiving a piece of the pie has been charging for compiling our medical records for review by the managed care associations; remember, we still mainly receive our reimbursements from fee-for-service functions.

So it begs the question, from a provider standpoint, what is in a diagnosis code? We know that we need the right ones in order to get services or procedures approved. We know that the use of them will help us meet certain quality measures. Theoretically, we understand the importance of tying them to the patient journey, and documenting appropriately for compliance, helping establish medical necessity.

What most of us didn’t realize (and now are starting to realize) through contract review and denials or takebacks is that certain health plans are starting to change the language in provider contracts, giving themselves the right to take back the provider’s fee-for-service payment if they select the wrong diagnosis code.

That’s right: if you choose the wrong code, and it happened to hit a risk adjustment model code, and upon audit, your documentation does not hit that level of specificity sought for the condition, you forgo your payment. One contract goes on to say that you also must agree to their proprietary bundling software (you don’t get access to it), and no appeal rights are afforded.

As the language in provider contracts continues to get updated, this issue will continue to grow in importance. Once again, it’s important to not place a lot of value on Guideline 19. It’s important to query providers in the absence of documentation when those codes can influence further payments, outside of fee-for-service functions. It’s important that your documentation reaches the level of specificity found in the code.

Clinical documentation improvement and awareness of the risk adjustment models are extremely important for us, as we move forward. Now is the time to review your documentation to make sure it is robust enough to withstand an audit.

Programming Note:

Listen to Rhonda Buckholtz report this story live during Talk Ten Tuesday today, 10-10:30 a.m. EST.

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.

Rhonda Buckholtz is the vice president of practice optimization for Eye Care Leaders. She has more than 25 years of experience in healthcare, working in the management, reimbursement, billing, and coding sectors, in addition to being an instructor. She is a past co-chair for the WEDI ICD-10 Implementation Workgroup, Advanced Payment Models Workgroup and has provided testimony ongoing for ICD-10 and standardization of data for NCVHS. Rhonda spends her time on practice optimization for Eye Care Leaders by providing transformational services and revenue integrity for Ophthalmology practices. She was instrumental in developing the Certified Ophthalmology Professional Coder (COPC) exam and curriculum for the AAPC. Rhonda is a member of the ICD10monitor editorial board and makes frequent appearances on Talk Ten Tuesdays.

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