Documentation: A Key Factor of Risk Adjustment

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In an age of constant change and regulations, one thing remains the same in coding and billing: If it’s not documented, it wasn’t done. This is the main rule for documentation. Good documentation is and always has been the foundation of accurately capturing a provider’s work and the patient’s condition, management and treatment.

Introduced by the Affordable Care Act, the risk-adjustment payment structure is a predictive model that gauges the risk a healthcare plan member will incur for medical expenses above or below an average, over a defined time. This projection is built on managing cost and is geared toward assisting payers in financial forecasting of future medical need. The more severe or complex a diagnosis, the higher the risk value assigned. Risk-adjusted reimbursement focuses on the treatment of disease states, rather than office visits. This means the disease states that cause risk for the patient (as well as the financial risk for taking care of the patient) must be appropriately identified, documented and coded in every encounter.

Documentation Is Key

Each diagnosis code that falls into the payment model will be assigned a risk adjustment value and grouped into a hierarchical condition category (HCC). The HCCs are correlated both clinically and financially, and the main source of data that drives the risk-adjustment model is physician and hospital claims. Accuracy and specificity in ICD-10-CM coding and medical documentation are critical pieces for risk adjustment. Diagnosis coding is used to represent the member’s health status and establish an accurate risk score. As in all coding, ICD-10 diagnoses cannot be inferred from physician orders, nurse notes, lab or diagnostic tests—they all come from the documentation in the patient’s medical record.

Good documentation is a cornerstone of accurately reflecting the provider’s work & the patient’s condition.

There is nothing new when it comes to documenting; this is an evolving concept and the key to capturing each patient’s current and active diagnoses. If clinical documentation of a visit lacks the accuracy and specificity needed, then it will be challenging to assign the most appropriate diagnosis code as well as succeed in receiving the correct reimbursement. Increased coding accuracy is necessary to report more precise health status information that can be used to identify healthcare needs with the appropriate level of care.

Avoid Diagnosis Pitfalls

As you examine your diagnosis coding documentation, below are some common pitfalls to avoid.

• Coding from a superbill. Although this is a necessary document for day-to-day workflow, it has limitations and does not always list all the diagnosis options available to the provider. It is best to have a coding manual or a complete list of ICD-10 codes in your EHR.
• Coding from a problem list. Make sure all problems listed as active are appropriate and haven’t been brought forward (copied and pasted) in error.
• Coding only the primary diagnosis code. Diagnosis codes are not limited to what brought the patient to the office today. Any condition monitored, evaluated, assessed or treated should be included in the documentation and billed out on the CMS-1500 form.
• Coding generic or unspecified codes. It is a best practice to code to the highest level of specificity known for each encounter. This will be even more important with the level of detail in ICD-10 codes.
• Using rule-out diagnosis codes. The rule of thumb is to always code what is known at the time of the encounter. If a definitive diagnosis has not been established, it is recommended to code the signs or symptoms that brought the patient to the office on the date of service.
• Coding history of as current. Anything that is listed as assessed or resolved should not be coded as a current diagnosis. Providers should be made aware of Z codes that are appropriate for these scenarios.
• Not linking manifestations and complications. Do not assume there is a connection with conditions listed in the medical record—the provider needs to make the link. Some terms that can be used to link conditions are because of, related to, due to or associated with.
• Overlooking chronic conditions. Chronic and/or permanent diagnoses should be documented as often as they are assessed or treated. For risk adjustment, the Centers for Medicare & Medicaid Services requires these diagnoses to be submitted at least annually.

Paint the True Clinical Picture

The business of healthcare may be changing—there are more and more quality programs, payment models and policy requirements—but good documentation continues to be a cornerstone of accurately reflecting the provider’s work and the patient’s condition. Risk adjustment is one model that takes a close look at how diagnosis documentation and coding contribute to the complexity level of the encounter, medical decision making, and time spent with the patient. Good ICD-10 coding documentation will paint the true clinical picture of the patient and reflect the provider’s thought process. This is a good time for providers and their staff to identify ways to improve clinical documentation. It is a best practice to develop an internal compliance plan and implement prospective and retrospective, internal and external chart reviews with ongoing monitoring and feedback.