While supplies last! Free 2022 Coding Essentials for Infusion & Injection Therapy Services book with every RACmonitor webcast order. No code required. Order now >

Sonya Manuel

Do you find that your facility’s DRGs are being downgraded by third-party payers that are re-diagnosing patients? Are they also discounting the coding of suspected and possible diagnoses? 

You’re probably not alone. Sonya Manuel, a senior health information management (HIM) consultant and DRG coordinator for Jzanus Consulting in New York, tells RACmonitor that the battle with third-party auditors has been going on for years. Manuel works in her company’s HIM division and is responsible for inpatient coding and DRG audits for MS-DRGs and APR-DRGs, as well as training and education as it relates to ICD-10-CM/PCS. 

“I have been in this field for over 20 years, and more recently (have been) very heavily involved in an appeals project with a major New York City health system,” Manuel said. “I am working with them on addressing ‘inappropriate DRG downgrades,’ where third-party review companies are basically re-diagnosing patients and removing not only clinically supported diagnosis codes, but those also supported by official coding guidelines.”

Manuel also reports that the DRG downgrades are being performed on New York Medicaid carriers.

The issue has escalated to the point where Manuel has worked with hospital administration in bringing this problem to the attention of the Greater New York Hospital Association for assistance. Manuel says some of her clients’ hospital staff physicians who have been challenged have political connections and might want to pursue a legislative remedy, forcing third-party auditors and carriers to follow federal coding guidelines. 

They are hoping to follow a similar path to that of Texas Governor Greg Abbott, who signed a bill into law that specifically addresses the DRG validation process. Language contained within that new law clarifies criteria for Medicaid fraud investigations and requires auditors to follow federal coding guidelines during the diagnosis-related group (DRG) validation process. This would be the same federal guidelines hospitals and other providers are required to follow. 

“We have been inundated with appeals and inappropriate internal policies on when something can or cannot be coded,” Manuel explained. “One hospital, in particular, actually has the coder reviewing creatinine values and multiplying the lowest creatinine or baseline creatinine by 1.5 to determine if the documented diagnosis of AKI is clinically supported.”  

Manuel went on to note that the coder then can add or remove the diagnosis based on the calculation. She also added that her organization has another client that implemented a policy on acute blood loss anemia and has coders calculating blood loss based on the rise and fall of hemoglobin, adding or removing the diagnosis based on their calculations.   

“Needless to say, I was floored by their policies that were actually put into writing,” she said.  

Manuel says she doesn’t know what software algorithms auditors are using, nor has her organization been able to obtain an accurate account of how much data the auditors are analyzing. 

“However, at one of our client facilities, senior administration became involved when a request for 1,500 records came in for DRG review,” Manuel recalled. “From what was communicated with us, their legal team became involved, and apparently, there is the possibly of legal processes pending and the facility is not sending anymore records to this company at this time.”

It is Manuel’s understanding that the auditors perform data mining, citing as an example that they may receive10 to 15 DRG denials at the same time for the principal diagnosis of sepsis in which the carrier will, in her words, say that “yes, the physician wrote it, but the patient really did not have it.”  

In making the case of how arbitrary a denial from an auditor can be, Manuel offered the following, which she described as a “commonly” scripted rationale:

“The clinical evidence in the medical record does not support the assignment of 038.40(gram negative septicemia) and 995.91 (sepsis) as secondary diagnosis. It is noted that the physician documents sepsis in the H&P progress notes and discharge summary. However, to validate sepsis, we look for consistent documentation of the condition in the medical record; evidence that the patient’s presentation cannot be explained by their local infection alone, or by a non-infectious condition; and that their treatment and LOS are consistent with this diagnosis … (and) while the patient’s presentation warranted consideration of sepsis as a possible diagnosis, and a localized infection … was identified … upon further investigation, the diagnosis of sepsis was not supported by the clinical evidence. Although the patient presented with fever, tachycardia, and leukocytosis, the clinical evidence revealed no consistent hypotension episodes, a lactate level of 1.5, and blood culture (showing) no growth in five days.”

Here is a portion of the Jzanus rebuttal: 

“Every attending physician and resident involved in the care of this patient documented sepsis throughout the entire record. The patient was initially in observation for the pyelonephritis. During the observation period, the patient spiked a fever to 103, became tachycardic to 121, and became hypotensive with sBPs to 90s, diaphoretic with chills. An MICU consult was called. The patient required subsequent admission to MICU. So (the auditor) is wrong in its statement that the patient was not hypotensive. Sepsis is clearly documented in the progress notes and even on the MICU admission order. The patient required conversion from observation status to a level of inpatient care because of the documented and treated sepsis. The diagnosis of sepsis is not based solely on presentation of a fever, a particular blood pressure reading, or respiratory rate. The absence of the clinical indicators outlined by (the auditor) does not preclude a diagnosis of sepsis.”

In other situations, Manuel says, Jzanus will receive 10 to 15 cases at once, all of them with the secondary code for AKI removed, and the carrier will say RIFLE (risk, injury, loss of kidney function, and end-stage kidney disease) is not met so the code is not clinically supported even though the condition was documented and treated. 

For example, Manuel cited one recent denial: 

“The patient was treated with IV antibiotics for UTI and had Foley inserted for obstructive uropathy. The patient’s creatinine ranged from 2.59 to 1.17 with no baseline reported. The patient did not have a threefold increase in his creatinine, did not have a glomerular filtration decrease greater than 75 percent, did not have anuria for 12 or more hours, and did not have a creatinine level greater than 4.0. There is no documentation to support the diagnosis of acute renal failure. There is only documentation from the physician of AKI. Code 584.9 is unsupported and being removed from the case.”

Here’s the rebuttal from Jzanus:

“Please refer to the progress notes enclosed with this rebuttal, which repeatedly document a diagnosis of AKI and acute kidney injury. There was never any documentation of acute renal failure in this case. In ICD-9-CM the diagnosis of AKI is also reported with code 584.9. ICD-9-CM code 584.9 is used to report both AKI or ARF. (The auditor) is utilizing the criterion form RIFLE to make the clinical determination in this case. However, we would like to point out that we have referenced your RIFLE criteria for acute kidney injury. The RIFLE criteria for injury notes a “twofold increase in the serum creatinine or GFR decrease by 50 percent.” A threefold increase in the serum creatinine is not required for AKI. Therefore, the RIFLE criterion for acute kidney injury has been met. Please note that coding guidelines do not require physicians to utilize RIFLE criteria to make a diagnosis of AKI, ARF, or any other renal disease. ICD-9-CM code assignment is based on documentation by the physicians involved in the care of the patient and their ability to diagnose and treat their patients.”

To continue: “In this case, the physician did not document acute renal failure. The physician documented acute kidney injury. So to supply a rationale for a diagnosis that was not documented in the record isn’t appropriate for this case. The criteria for acute kidney Injury, utilizing multiple kidney organization guidelines, have been met. The indexed code in the ICD-9-CM coding book for Injury, kidney, non-traumatic, acute is code 584.9.  The Coding Clinic published in the fourth quarter of 2008, page 192, notes that the code for acute kidney injury, non-traumatic, is 584.9., (so) we believe that the use of acute kidney injury, 584.9 is justified.”

“We maintain that this case was coded correctly, in accordance with the documentation of the treating physician, the AHIMA Standards of Ethical Coding, the Official Coding Guidelines for ICD-9-CM and the AHA Coding Clinic Advisors,” Manuel insisted. To underscore the Jzanus response, a definitional link was included in its response that she says clearly outlines the differences her company’s stance:


Of note in both of the above cases, the hospital appealed three times only to receive “final determination letters” from both companies stating their decision to remove the diagnosis of sepsis and the diagnosis of AKI were upheld, and both cases resulted in DRG/payment downgrades. There was no option for outside arbitration on either case, as the contracts with the insurance carriers gave the outside review company the right to make a “final determination.”

Manuel says there have been times when there is only one CC or MCC and they remove the code, saying it’s clinically unsupported. She also says they at times receive a bulk of cases for which all malnutrition codes are removed or all cases with hyponatremia as a secondary diagnosis are removed. It appears that cases with single CCs or single MCCs are often targeted. 

Manuel says that Jzanus is not alone when it comes to battling with third-party payers.

“We have several providers in the New York area experiencing the same problems with the same carriers and third-party review companies,” she said. “It would be in the best interests of the hospitals to join forces and wage a war on the inappropriate DRG downgrades. The re-diagnosing of patients at the discretion of certain carriers and third-party review companies (who may or may not even be physicians or clinicians) is not only inappropriate, but shows blatant disregard for the opinions and treatments implemented by the physicians involved directly in the care of the patients.” 

“This isn’t simply a matter of inappropriate DRG denials and payment downgrades. Assignment of codes affects much more than reimbursement,” she added. “These codes affect hospital and physician health grades, core measures, value-based purchasing, congenital registry data, CDC data, and a host of other areas outside of the DRG payments. Removing valid diagnosis codes creates a skewed and inaccurate data base of information that is used for public health monitoring, research, care benchmarking, and a variety of other areas. Physicians have the right to utilize any criteria they see fit to diagnosis and treat their patients, and the coding staff has an obligation to ethically code the cases based on the Official Coding Guidelines for reporting and the documentation of the treating physicians.”

“It’s time that hospitals and organizations monitor and detect trends and patterns of inappropriate denials or lower-DRG payments,” Manuel concluded. “Then contact federal agencies such as CMS (the Centers for Medicare & Medicaid Services) and the American Hospital Association, along with any private payers, to expose any and all wrongdoing.”

Perpetual motion devices have long intrigued inventors, despite scientific evidence that refutes the possibility that they are sustainable. One canny observation is that it would take forever to test one. Yet the issues being faced by Manuel and her colleagues at Jzanus may prove that wrong. 

About the Author

Chuck Buck is the publisher of RACmonitor and the executive producer and program host of Monitor Monday. 

Contact the Author 


Comment on this Article




Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

You May Also Like

Leave a Reply

Your Name(Required)
Your Email(Required)