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EDITOR’S NOTE: This is the first of a two-part series.

It always amazes me how naïve physicians can be when it comes to documentation in the medical record. Certain things they should write in a patient’s chart they sometimes do not, and things that should not be part of the chart they sometimes feel obligated to enter.

Clinical documentation is important because it is critical to patient care. One key factor is that the patient’s chart serves as a legal document used for quality reviews and data utilization. The chart also validates the care provided, and well-documented medical records reduce the work of claims processing as well as maintaining compliance with Centers for Medicare & Medicaid (CMS) regulations and other payers’ regulations and guidelines.

Documentation also impacts coding, billing and reimbursement. Let’s take a look at CMS and for what the RAC auditors are looking. Medical necessity is of the utmost importance in this area. There is nothing a RAC likes better than to deny – and why is that, you may ask? They have a stake in denying because, as you may know, they receive a percentage of the spoils of their findings. It kind of reminds one of the old pirate movies: To the victors go the spoils. So let’s look at some things that do not belong in the documentation.

I recently was reading a chart in which the documentation stated that a patient with a known history of polysubstance abuse and chronic pain was admitted for chronic pain. The first problem was that the patient was admitted as an inpatient. This should have been switched to observation care, as upon further review, no acute modalities other than the presence of parenteral meds were identified. The patient was placed on telemetry even though the cardiovascular exam was negative.

Here is where the naiveté of the physician becomes problematic. In the documentation it is stated that the “patient is staying in the hospital because he is waiting to be placed in SNF.” A statement such as this makes RAC auditors foam at the mouth; the letter to the hospital no doubt will state that not only did the patient fail to meet inpatient admission status, but the patient should not have been admitted at all, based on the physician documentation.

Here is another scenario: A second patient was admitted through the emergency department with a possible small bowel obstruction. Upon further examination, the case was coded as gastroenteritis. This patient also should have been admitted under outpatient observation. The labs were recorded as follows: Na 142, BUN/creat 15/.8, urine sp. gr. 1.020, HR 104 and regular. Per documentation found in the chart, the patient had a bowel movement the morning after admission without nausea or vomiting. But again, the physician documented in the chart, “patient wants to stay another day.” If the hospital were a hotel, the occupant of the bed would have to pay to stay an extra day. And if this chart was audited by a RAC, it would be denied, as medical necessity was not established. Then the hospital gets to eat the bill.

Consider another scenario: This next patient has Alzheimer’s, and the documentation by the physician indicates that the “daughter brought her (the patient) in so that she could be placed in a nursing home.” What was going through the physician’s mind when he decided to document this in the chart?

Additionally, Medicare (RACs) also is looking for:

  • One-, two- and three-day inpatient stays;
  • Symptoms/diagnoses such as chest pain, dehydration, weakness or syncope; and
  • High-cost procedures with short hospital stays, including cardiac (PCI stent, PFO repair, ICD placement, pacemakers, etc.) and kyphoplasty.

Also being looked at are so-called “targets of opportunity,” including:

  • Heart failure and shock;
  • Kidney and urinary tract OR procedures;
  • Simple pneumonia;
  • Chronic obstructive pulmonary disease;
  • Diabetes; and
  • Three-day stays with transfers to nursing homes.

Two of the above cases actually met the three-day admission with transfer to a nursing home requirement, but data mining by a RAC still would lead to them being discovered – and, of course, after review, denied.

What have the RACs cited as reasons for medical denial? The RACs have indicated that a full 40 percent of all admissions reviewed are medically unnecessary. Claims that are billed as full inpatient admissions still have to meet medical necessity; otherwise they have to be billed under observation or outpatient levels of care, which receive far lower rates of reimbursement. Physicians are often not aware of the difference, and mistaken determinations cannot be changed once a patient is discharged.

The quality of clinical documentation impacts both hospital reimbursement and quality-of-care measures. This also impacts severity of illness. Why is it important to capture severity of illness? Because it lends to the patient’s risk of mortality and the intensity of services given.

Please remember, “If it was not documented, it was not done.”

About the Author

Denise Nash, MD, is the revenue cycle director for Quorum Health Resources, LLC. Dr. Nash has more than 20 years experience in the healthcare industry. She has worked for CMS in hospital auditing and has expertise in negotiation and implementation of risk contracting for managed care plans.  Denise has also worked with individuals as well as physician groups on utilization and PQRS management to improve financial performance for the risk-based contracts and Value Based Purchasing programs.  Currently she is employed in the ICD-10 division of healthcare consulting in Revenue Cycle for Quorum Health Resources.

Contact the Author


To comment on this article please go to editor@racmonitor.com

Click to read Part 2 – Advantage RACs: Physician Naiveté – Pt. 2


Denise Nash, MD, CCS, CIM

Denise Nash, MD has more than 20 years of experience in the healthcare industry. In her last position, she served as senior vice president of compliance and education for MiraMed Global Services, and as such she handled all compliance and education needs, including working with external clients. Dr. Nash has worked for the Centers for Medicare & Medicaid Services (CMS) in hospital auditing and has expertise in negotiation and implementation of risk contracting for managed care plans. She has also worked with individuals as well as physician groups on utilization and Physician Quality Reporting System (PQRS) management to improve financial performance for risk-based contracts and value-based purchasing programs. Dr. Nash has past experience with episode-of-care data, hierarchical condition categories (HCCs), and patient management in the Accountable Care Organization (ACO) environment. She has also worked with both hospitals and physician practices on the legal and financial aspects of adding new services to their respective facilities. Dr. Nash is a consultant on coding/compliance audits at physician practices and hospitals, and has worked for insurance plans conducting second- and third-level appeals. Her past experience also included consulting for the Office of the Inspector General of New Hampshire in its Fraud and Abuse Division.

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