American College of Physicians: Internal Medicine — Doctors for Adults ®


Billing and coding

Specific documentation helps optimize payments for heart failure

From the January ACP Hospitalist, copyright © 2009 by the American College of Physicians

By Deborah Hale

CMS is calling for greater transparency in how hospitals provide care. Hospitals are now required to measure and report on quality for such conditions as acute myocardial infarction (AMI), congestive heart failure (CHF), pneumonia and surgical infection prevention (performance measures are available to the public online). CMS also collects mortality data on AMI, CHF and pneumonia. If your mortality rates are higher than expected, one possible explanation may be a lack of clear, precise documentation of diagnoses and procedures needed for accurate prediction of the patient’s risk of death given their age and comorbid conditions.

Poor documentation may also reduce a hospital’s diagnostic-related group (DRG) payment. CMS converted to a Medicare Severity Refined DRG (MS-DRG) model on Oct. 1, 2007 to increase payment for hospitals that care for the sickest patients and to significantly reduce payments to hospitals caring for patients who are not as ill.

The most substantial change in this MS-DRG methodology is its recognition of secondary diagnoses in patients with common conditions, such as CHF. Details about the type of CHF lets CMS measure outcomes and also determine the MS-DRG payment but it also allows researchers to uncover the prevalence of types of heart failure throughout the U.S. and assess associated expenditures and outcomes by heart failure type.

All but 68 of the 746 new MS-DRGs fall into one of three categories based on the severity of the secondary diagnoses:

Major Complication / Comorbidity (MCC)

  • Usually results in increased hospital resource utilization
  • Reflects the highest level of severity
  • Has a major impact on the MS-DRG payment

Complication / Comorbidity (CC)

  • Usually results in increased hospital resource use, but at a lower rate statistically than MCCs.
  • Can impact MS-DRG payment, but at a lesser rate than MCCs.

Non-Complication/Comorbidity (Non-CC)

  • An additional diagnosis that does not usually impact severity of illness or resource utilization
  • Does not impact MS-DRG payment

These three categories have an impact on how coding staff classify primary and secondary diagnoses.


Determining secondary diagnoses

The reference to a complication or comorbid condition does not imply that improper or inadequate care has been provided. For example, a patient admitted to the hospital for treatment of an exacerbation of COPD would assign to one of three MS-DRGs for COPD as follows:

The prevalence of CHF in the Medicare population makes it a likely comorbid condition in many seniors. CMS no longer recognizes the non-specific term CHF as a complication or comorbidity. Without another diagnosis that would count as an MCC or CC, the MS-DRG assignment is 192 COPD without CC/MCC.

Physicians must be very specific when documenting the type of heart failure that has been diagnosed during hospital admission or a previous episode of care to get credit for a higher severity of illness and the corresponding payment increase. For example, CHF specified as chronic systolic and/or diastolic is the more specific terminology that is needed for the condition to be considered a CC, assigning the case to MS-DRG 191 COPD with CC.

If the secondary diagnosis of CHF is documented (and supported by clinical evidence) as acute, decompensated, exacerbated or “a flare up” and also specified as systolic and/or diastolic, the case will assign to MS-DRG 190 COPD with MCC and given the highest severity level in this MS-DRG triplet.

The case gets assigned to the highest weighted MS-DRG 190 when at least one of the conditions listed as a secondary diagnosis is classified as a Major CC.


Selecting a principal diagnosis

Take the example of a patient who has acute CHF and an exacerbation of COPD at the time of admission. If both conditions equally meet the definition of a principal diagnosis—the condition chiefly responsible for the admission of the patient—the coder should use his or her own judgment in deciding which to use. There is nothing unethical or improper about choosing the diagnosis that gains the highest payment and severity level when there are two conditions that meet the definition.

The two case studies shown in the sidebar illustrate how choosing between two principal diagnoses can affect reimbursement (examples are based on a Hospital Specific Rate of $5,500). Note that regardless of whether CHF is the reason for the inpatient admission or secondary diagnosis to be reported, it is important for the physician to specifically document whether the patient has systolic or diastolic (or a combination) heart failure and whether the condition is acute and/or chronic.

Deborah Hale, a certified coding specialist, is president of Administrative Consultant Service, LLC, in Shawnee, Okla. For the past 21 years, she has provided utilization management, coding, billing and clinical documentation improvement consultation for hospitals throughout the U.S., including the state of New York’s severity refined DRG system.


Patient A

Principal: Acute exacerbation of COPD
Secondary: Acute and chronic systolic (and/or diastolic) CHF (MCC)
MS-DRG 190 COPD with MCC: $7,166

Principal: Acute and chronic systolic (and/or diastolic) CHF
Secondary: Acute exacerbation of COPD (CC)
MS-DRG 292, CHF with CC: $5,539

Patient B

Principal: CHF
Secondary: Dilated cardiomyopathy (excluded as a CC condition due to non specific documentation of #1)
MS-DRG 293, CHF w/o CC/MCC: $3,972

Principal: Acute and chronic systolic heart failure
Secondary: Dilated cardiomyopathy (included as a CC when Diagnosis #1 is specific to the type of heart failure)
MS-DRG 292 CHF w/ CC: $5,539


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