Rise in Outpatient Services: Ten Areas That Require Attention

Caroline DelaCruz, RHIT, CCS-P, CPC, Manager, Comprehensive Outpatient Revenue Integrity Services, Pena4

I recently contributed to an article in HIM Briefings on the rise in outpatient services and the correlation to outpatient denials and revenue impact. The following blog post covers some of the key points discussed. 

Healthcare organizations and providers are experiencing a shift in outpatient reimbursement from fee-for-service to alternative payment models and value-based reimbursement based on quality outcomes. Coding errors, documentation gaps, claim denials, and accounts not billed due to claim edits are typically much higher on the outpatient side due to sheer volume—which presents operational and management challenges for organizations. 

As organizations acquire practices and open new clinics, the number of outpatient care locations increases. Accordingly, outpatient coding, documentation, and charging become more important to ensure quality reporting and reimbursement—and to reduce and prevent denials. 

The following ten issues associated with outpatient accounts require attention:

  1. Coding historically done by non-coding professionals
  2. Coding errors and documentation gaps such as missing CPT codes and the ability to show medical necessity
  3. Increase to the outpatient exception report or outpatient DNB (unbilled report)
  4. Hard-coded codes (assigned by the charge master) not visible or available when a coder is coding (soft-coding)
    1. Prevents the edits (OCE) from scrubbing the entire set of codes while the coder is assigning codes
    2. Leads to edits and billing delays on the back end, requiring rework—a costly administrative burden
  5. Inadequate or no charge validation process in place
  6. Outdated charge description master (CDM)
  7. Lack of true documentation improvement or query processes in many outpatient settings—can lead to missing or insufficient documentation to support the claim
  8. Lack of proper process in place for the assignment of correct and applicable modifiers
  9. Prescriptions or orders, especially from external providers, that lack specificity and/or the correct ICD-10 CM code to justify medical necessity for the procedure or diagnostic test
  10. Pre-authorizations from insurance companies not matched to the diagnosis or procedure codes submitted

The rise in outpatient denials results in overwhelmed coding staff who must handle all denials that revert back to the HIM department, whether or not HIM is responsible for the coding of that service.

These types of issues have a direct correlation with the number of outpatient denials, rejections, and delayed or denied reimbursement, especially considering the shift from volume to value. Such issues can pose increased compliance risk with regard to inaccurate codes, units, or revenue codes. In addition, compliance becomes a significant concern if the clinical documentation does not support the services provided. The first step toward achieving accurate reimbursement is to ensure all internal systems, processes, and people are in sync and up to date.