Last week I spoke at the annual revenue integrity symposium sponsored by the National Association of Healthcare Revenue Integrity. And I really enjoy that conference; it’s a chance to discuss things other than admission status and learn a whole bunch of new abbreviations.
My talk was about key performance indicators (KPIs), and I am going to start with my conclusion, which is that they are terrible. Now, I cannot cover my whole hourlong talk in one article, but I can give you an example.
I bet every reader has heard from finance that you need to get a higher CMI, the case mix index. Now, granted, part of that is reasonable. We want to capture all applicable diagnoses so that the admission is assigned to the proper Diagnosis-Related Group (DRG), and the DRG weight is as high as possible, and as a result, the CMI will accurately reflect your overall patient acuity.
Of course, many of those diagnoses may not be complications or comorbidities (CCs) or major CCs (MCCs), and won’t affect the DRG weight, but they can influence the myriad risk scores.
But at the same time, those finance people also want you to find as many inpatient admissions as possible. They just don’t like patients hospitalized as outpatients, with or without observation services. After telling you to raise the CMI, they tell you to lower the observation rate.
So, what do you do? You double down on your utilization review activities, reviewing observation patients to get them admitted as inpatients as soon as it’s evident they will require a second midnight. You work hard with your doctors, getting them to document medical necessity for ongoing hospital care.
Your physician advisor, instead of sitting at a computer reviewing cases and arguing with payer medical directors, rounds on the units, talking to doctors, educating on the rules and documentation best practices, and participates in multi-disciplinary rounds, ensuring medical necessity, helping with problem discharges, and just providing moral support for the case managers.
And as a result of your hard work, your observation rate goes down and inpatient rate goes up. You catch a bunch of missed diagnoses and increase the specificity of many others. Your finance team should be delighted. But they aren’t. Why? Because your CMI dropped.
Why? Because all those inpatient conversions were for medical diagnoses, and because the patients weren’t “really sick,” they end up as lower-weighted DRGs, usually without a CC or MCC. Take chronic obstructive pulmonary disease (COPD) without a CC or MCC. That has a weight of 0.65.
That’s really low. And as a result, these lower-weighted inpatient admissions drive down the average CMI, and finance demands an explanation about why you disregarded their initiative.
And that’s truly messed up. You just got the hospital a DRG payment of perhaps $6,000 to $8,000, instead of the wimpy $2,648 observation payment, and they are upset? Do they really want you to stop all your efforts and leave those patients as observation?
It’s wrong; CMI is not a good key performance measure. If your finance team wants a higher CMI, tell them to hire more surgeons or start a transplant program so you can get new patients whose admissions have high weights.
Heart transplant with an MCC (and you should be able to find an MCC on that patient type) has a weight of 28. One of those will drive your average CMI up quite nicely.
So, if you are faced with raising the CMI, ask your finance team which they would prefer: a higher CMI, or more revenue.
And then decide what action to take.
EDITOR’S NOTE:
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