Clinical coding: How it has an impact on your hospital’s health

Both your hospital’s revenue and operations depend on accuracy.

It’s well known that many hospitals in Australia have been struggling with a lack of staff – particularly during the impact of COVID-19. But it’s not only medical staff that have been in short supply.

Coding and auditing professionals have also been (and continue to be) affected dramatically. This can have a very real impact on revenue optimisation, internal procedures and ultimately the hospital’s reputation.

Accuracy suffers

With hundreds of episodes to process each week, the last thing coders and auditors needed was a national health crisis that added to their workflow – along with less staff to help out. 

Workloads simply backed up and qualified contractors were in short supply to fill the gaps.

Yet, despite this additional stress, the quality of every coder’s work still needed to be exacting. Which brings one to ask – what happens when Coding/Auditing Departments become too overwhelmed?

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Ensure quality of coded data

The mistakes made

You may be alarmed to know that clinical coding errors may have been as high as 40% to 70% not so long ago.

Those figures were cited in a study, Accuracy of injury coding in Victorian hospital morbidity data, by MacIntyre, Ackland & Chandraraj in 1997.

Thankfully, figures supplied by PICQ for the Organisational factors affecting the quality of hospital clinical coding study (by Santos, Murphy, Baxter and Robinson) cited a current error rate of up to 1%.

That said, 1% of 100,000 procedures, for instance, means 1,000 incorrectly coded episodes – which could result in a number of consequences for any hospital:

  • Under or over payment

Incorrect or incomplete coding that isn’t picked up by the auditing team results in underpayment or
overpayment to the hospital. The latter of which could require reimbursement further down the track.

  • Operational deficiencies that affect patients:

Correct ongoing care and support services are also dependent on accurate coding.

Typical coding errors and their impacts

With hospitals now adopting so many specialisations, it’s not hard to understand how coding can become confused and miscalculations are made.

Especially during high volume periods. Indeed, small mistakes can have serious consequences:

  • Miss understood clinical documentation:

Coders require accurate descriptions of diagnosis and procedures from clinicians. Without specific and detailed descriptions, coders are prone to incorrections – along with many wasted hours of contacting clinicians for verification.

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Ultimately, if incorrect codes aren’t identified, they have long-term financial implications for both the hospital and patients – who could also experience difficulties claiming from their health insurance provider.

  • Missing information:

Any information that’s missing from documentation can further impact the hospital revenue and operations. This results in claim denials, which ultimately delays reimbursement. A consequent back-up in billing and processing also results in additional stress on coding and auditing staff.

  • Upcoding:

When patients are billed for more complicated procedures than they actually received, a correctional backlog develops – which naturally results in delayed billing and processing. If this situation is drawn out, it may impact the hospital’s reputation as a result of patient frustration further down the track.

The same situation applies for coding that doesn’t reflect higher-level procedures or care.

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How secure is the safety net?

Auditors have an equal level of responsibility for ensuring coding is correct.

They also need to be on top of the accuracy of reports, compliance with the ICD-10 code-sets, understand risk mitigation and be able to streamline revenue cycle management.

In short, the volume of work they need to oversee is enormous – especially since they are usually a small team that operates on manual output. So it stands to reason that the odd mistake gets through the system due to auditor stress and overwork.

What’s more, because audit teams are so labour intensive, many audits are performed after billing. As a result, auditors miss documentation gaps or coding errors before claims are rejected.

Steps to promote accurate coding

  • More accurate descriptions of diagnosis and procedures from clinicians can remove a lot of guesswork and follow-ups for coders. There’s also a strong case for creating on-going educational activities and communications between coders and clinicians.
  • Previews of coding and the associated documentation from senior peers could be another way of improving outcomes – if staffing levels enable this.
  • Ongoing education for coders provides opportunities to announce changes and updates in code protocol. It also encourages less experienced staff to learn and ask questions.
  • Human error can be reduced by ensuring coder environments are distraction-free and their workloads aren’t overwhelming.
  • Resource support from management can provide tangible benefits for coders and auditors alike. This includes additional staff during busy periods, reference material and automated software.

Research supports the case for education and additional resources

Developing a constant feedback loop, continuous education, and more efficient workflow practices are the key elements of improving the quality and turnaround of clinically coded data – according to the study, Organisational factors affecting the quality of hospital clinical coding.

The study itself shares the direct effect of clinical coding errors that impede efficient operations and financial management of hospitals.

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It delves deeply into factors that affect accuracy, completeness and timeliness of coding; what measures and tools can be implemented to aid coding quality; and how coding errors directly impact hospital funding and ongoing operational budgets.

Bringing it home

Naturally, every hospital has its strengths and weaknesses in coding and auditing. When stress-tested however, it can help to know if a weakness is going to become a serious, ongoing concern.

Getting a reliable third party in to advise you about your processes can help create a system that runs more proficiently and profitably for your hospital.

Code Focus can guide you in identifying any trouble areas, assessing your procedures, and implementing cost-effective ways to improve turnaround, staff moral and revenue optimisation.

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What next?

Book a demo today to learn more about how Code Focus can streamline your coding and auditing systems.


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