Some hospitals could risk coding things incorrectly or even losing money if they do not receive the additional training and resources needed to phase in the federal governments new Medicare DRG system, sources warned.
Lisa Brugh, director of care coordination at 263-bed Flagstaff (Ariz.) Medical Center, expects that well be OK, because we have a structure in place to deal with this. I think hospitals that dont will have more of a problem.
In a final rule on Aug. 1, the CMS replaced its current system of 538 DRGs with 745 new ones known as MS-DRGs that are expected to more accurately account for the severity of a patients condition. According to Karen Heller, senior vice president of health economics at the Greater New York Hospital Association, the biggest change took place within the list of comorbidities and complicationsor secondary conditionsthat operates concurrently with the MS-DRG system.
The agency essentially took the list of 13,700 secondary conditions and categorized them into three groups: major comorbidities, comorbidities or not comorbidities. Patients with major comorbidities are moved into the highest level of DRGs, meaning the hospital will get paid more than for patients without comorbidities. The CMS also decided to drop many nonspecific conditions from the comorbidity categories, although it retained many specific versions of the same conditions.
Hospitals should be aware of these changes, Heller said, because if a patient has a legitimate comorbidity but the hospital doesnt use the most accurate condition code, it could lose a lot of money by not getting credit for it. The new MS-DRGs for stroke are a good example of this, she explained.
Previously, there had been one DRG for the most common type of stroke, but now there are three. So compared with the current payment, a hospital could lose $2,000, gain $4,000 or have no change, depending on what comorbidity code it uses. If you code for a stroke with a major comorbidity you will get paid more than for a stroke without a comorbidity. This is why we have to educate physicians and coders about the new comorbidity and complications list in order for the new system to work properly, Heller said.
The CMS, however, is anticipating that hospitals will engage in more upcoding for complications and comorbidities as they move to the new system, prompting the agency to adopt a negative 1.2% adjustment for the coming fiscal year, with more cuts projected over the next few years. The hospital lobby has protested this behavioral offset, claiming it will cost the industry billions of dollars.
Flagstaff has had a program for the past six years that provides training for coders and nurses every fall for DRG changes. The hospital has a partnership with its utilization nursesthose who work behind the scenes with insurers, physicians and other nurses to ensure things like proper payment and documentation at the hospital. These nurses are partnered with the coders in this effort, Brugh said. Each year, the hospital holds a training session in November to inform these parties of the changes that affect the hospital.
That training initiative, however, will be more extensive this year with the implementation of the MS-DRGs, Brugh said, which will be phased in over two years, starting in fiscal 2008. This year, she anticipates the hospital will have to bring in additional employees so the regular staff can focus on training.
Educating physicians on the new coding system is also crucial because we cant code correctly unless they write the correct diagnosis in the medical record, Brugh said.
According to RAND Health, the new MS-DRGs will be easier and more cost-effective to implement than other severity-based DRG systems. RAND, which in March released an interim report about five other severity-adjusted systems, followed with a working paper on Aug. 1 that compared those systems with the MS-DRGs.
The report found that CMS new system had two important advantages over the other systems: It reflected current Medicare data, and it wont be hard to adopt because its not proprietary. Its classification logic is in the public domain, according to the findings. In its previous report RAND concluded that a competitor system developed by 3M, Con-APR-DRGs, would have done a good job of paying for patients appropriately, but its drawbacks were that it was a proprietary system potentially too complex to understand. The CMS had requested both reports.