Improper documentation and coding are driving outpatient reimbursement inefficiencies that cost the US healthcare system approximately $54 billion annually. Left unaddressed, these costs will continue increasing in tandem with outpatient revenue, which is growing at a year-over-year rate of 9 percent as consumerism and federal mandates converge to divert care away from the inpatient environment.
For providers, primary catalysts for change are: 1) the evolving regulatory environment, which includes the ongoing transition to value-based care and reimbursement restrictions such as Medicare’s Two-Midnight Rule; and 2) the expansion in the types of procedures available on an outpatient basis. For patients, escalating healthcare costs at a time when their share of the financial burden is also rising, coupled with the convenience of outpatient care, are pushing them away from hospital settings.
As hospitals and health systems search for ways to reduce expenses and increase revenue streams, a small but growing number of organizations are turning to single-path coding. For those that meet the trifecta of “right coders-customized workflow-right technology,” making the transition to having the same coding professional perform both facility and professional fee coding in the same workflow can positively impact the bottom line.
Pros and Cons of Single-Path Coding
Adopting the single path coding model drives several significant benefits. For coding professionals and the health information management department, it can reduce demands on already overburdened coding resources and improve coding professional productivity. Workflows are also streamlined because duplicate processes are eliminated, and professional-side coders are given access to technology tools like computer assisted coding (CAC).
The organization benefits from the elimination of code discrepancies and from greater uniformity across both claim types. This results in fewer delayed and denied claims, which in turn speeds up the revenue cycle. Single-path coding also helps comply with demands for specific data elements, such as those required by the Agency for Healthcare Research and Quality (AHRQ).
There are similarities between codes used on the facility and professional fee sides, which helps accelerate the return on investment to be realized from moving to single-path coding. Both use ICD-10-CM diagnosis and CPT procedure code sets, and local/national coverage determinations for medical necessity are similar concepts between facility and professional fee coding.
However, “similar” is not “same,” and the differences can contribute significantly to the challenges inherent in moving to single-path coding. In fact, there are more dissimilarities in codes used by each side than there are similarities. For example:
- APCs vs. RVUs – A facility’s ambulatory payment classifications (APCs) are typically driven by the dominant procedure code Whereas professional fees for relative value unit (RVU) reimbursements are based on individual procedure codes. Therefore, a facility’s final APC is not necessarily impacted if, for example, an additional procedure code is overlooked. If the same happened on the professional fee side, it could result in the costly loss of RVUs.
- OPPS – Professional fee reimbursement and Outpatient Prospective Payment System (OPPS) reimbursement are not the same and are therefore not reimbursed using the same APC package rates.
- Outpatient Code Editor – The Outpatient Code Editor system is not used in professional fee guidelines.
- E/M Levels – Initially developed for professional fee coding based primarily on medical decision-making, the Centers for Medicare and Medicaid Services (CMS) allows each facility to develop its own unique internal guidelines to report clinic and emergency department services provided by hospitals by mapping them to the levels of effort represented by the existing CPT codes.
- Modifiers – Though many modifiers can be used for facility and professional fee coding, some are dedicated to each individual side (e.g., modifiers 73 and 74 are used only for facility coding).
Coding culture is another meaningful difference. Most notably, in professional fee coding culture, every code may directly impact a physician’s income. Conversely, the wrong code used on a facility claim won’t necessarily or noticeably impact the bottom line.
In addition to potential culture clashes, filling the bench with dually trained coding professionals can be a sizable obstacle to making the transition because of both the level of specialization required and the ongoing coding professional shortage. Related to this, training to achieve proficiency—particularly for facility side coding professionals who typically require a higher level of training—requires time few coding professionals can spare and budget many HIM departments don’t have to spend.
Three Pillars for Success
Overcoming the challenges to single-path coding is magnitudes easier when the transition is undertaken in small doses—starting with a specific service line or specialty rather than taking a “big bang” approach. This helps the transition team and coders take a more meticulous approach to the change, which helps maintain both momentum and motivation.
Another best practice for a successful transition is to base the project on three pillars:
- People – the right staffing, organizational structure, and culture
- Process – identifying vision and goals, conducting proper training, revitalization, establishing policies and procedures
- Technology – customizing systems, process augmentation and data-driven decision-making.
Establishing these pillars starts with conducting a thorough assessment of current processes to identify any necessary organizational and workflow changes, including staffing. Next, leaders from three key stakeholder groups must be brought to the table:
- Physician leaders who understand the benefits of single-path coding and its impact on their bottom line are your best advocates for change.
- IT leaders who can help devise the organized plan necessary to move single-path coding up on the IT project priority list.
- Coding leaders who understand the tangible benefits the department stands to realize from single-path coding, including the acquisition of new knowledge and experience.
These stakeholders each will play an important role in establishing the three pillars upon which the single-path coding model is constructed.
The Right People
As noted previously, finding coding professionals with the right experience and skill sets is typically one of the greatest obstacles to successfully transitioning to single-path coding. Thus, the first step should be to conduct a gap analysis of current skills, the findings of which are leveraged to design training programs that address any shortfalls.
In addition to the appropriate education and training, it is vital to bring in professionals with the right mix of attributes. For example, coding professionals with a variety of experiences are valuable assets, even though specialized training will still be necessary for key areas like anesthesia, cardiology, and orthopedics. Thus, the best fit for single-path coding will be coding professionals who are cross-trained on both facility and pro-fee coding.
Single-path coding professionals should be independent and resourceful, particularly in today’s fast-paced environment where managers need coding professionals who can independently conduct research in response to questions and difficult coding challenges. For example, coding professionals should be able to competently research new procedures to gain a clear understanding of how they are performed and, subsequently, how they are coded.
Reliability, especially in a value-based reimbursement environment, is critical. Dependable coding professionals who can consistently meet and maintain quality and productivity standards are vital. The ability to pay close attention to detail enables single-path coding professionals to identify changes that might impact coding before it blossoms into a problem.
Coding professionals should possess professional verbal and writing skills, which are critical to the communications framework that supports accurate coding and documentation. They should also be certified—a qualification criteria that should be made clear during the interview process along with the job requirements.
Communications should be a two-way street, however. Not only should open and transparent lines of communication be maintained, but clear expectations should be set, questions and concerns addressed in a timely manner, and feedback encourage. This approach sets single-path coding professionals up to succeed.
A system of audits to monitor quality should be established, along with KPIs to measure coding professional and program success. Typically, a well-performing single-path coding model will drive increased charge capture and RVUs, reduced lag delays resulting in extra cash on hand and additional savings, lower coding denials through consistent coding and compliance alerts, and improve coding professional productivity.
Finally, it’s recommended that at least some existing coding volume be outsourced during the transition to single-path coding. Doing so alleviates some of the pressure on coding professionals during the initial stages as they adjust to the new process.
Defining the Process
In many ways, a successful single-path strategy is really a process improvement model. In involves multiple people making decisions around the consolidation of multiple coding processes into a single process managed by one coding professional—ideally without sacrificing quality and productivity.
As such, creating an effective single-path workflow is critical and involves mapping out the coding processes by chart type to identify where facility and professional fee coding workflows overlap or intersect. This signals areas where steps can be combined—ideally with input from impacted coders.
In fact, it is critical that coding professionals be involved in workflow decisions, as there is typically a significant disconnect between what administration believes the process should be and what coding professionals do. Thus, a workflow analysis should be undertaken that includes understanding the coding process as it really is, how coding works with other departments, and the impact coding outcomes have on various operational aspects.
This workflow analysis should pull in the evaluation previously done of coding professional proficiencies to further refine decisions around training to ensure coding professionals can concurrently code facility and professional fees appropriately for the specific organization. This analysis also provides valuable insights into just how far the process can be consolidated.
People and Processes Checklist
- Engage stakeholders.
- Identify physician and coding professional champions.
- Train coding professionals with certifications on both sides of coding.
- Analyze the gap in skill sets of current coding professionals.
- Set clear certification requirements.
- Monitor quality and establish incentives.
- Design a customized workflow and choose the right tool.
- Analyze the departments and silos at your facility.
- Create a project charter.
- Start with a proof of concept.
- Start with just a few specialties.
- Set and track KPIs.
- Solve arising challenges.
- Expand the number of specialties.
- Focus on continuous improvement.
- Outsource a portion of coding volume.
Implementing the Right Technology
The technology pillar can make or break any single-path coding program. As such, it is recommended that a partner be engaged that is willing to work as an extension of the project team, not just as a vendor. Doing so provides a solid foundation upon which technology decisions can be made.
Selecting the right technology is crucial to success not only because of the cost involved but also because of the time and effort required to successfully transition from one system to another. As such, any solution brought in should be customizable; one-size-fits all will never work in a single-path coding model because workflows and processes are unique to each organization’s workflow.
The technology that is ultimately selected should be able to process data regardless of the originating format to accommodate disparate systems. To that end, a unified coding platform is key, so coding professionals do not have to waste time chasing down information in various systems.
Finally, simultaneously coding facility and professional fees takes time, so the technology must be more than just a workflow solution. It should feature natural language processing (NLP) and artificial intelligence (AI) capabilities capable of suggesting medically appropriate codes, robust report capabilities, user-friendly dashboards, and the ability to provide feedback to coding professionals and build facility-specific edits.
Finding the right piece of technology that meets all these criteria will be time-consuming. While shortcuts may be tempting, the potential damage the wrong choice can cause is not worth the time saved.
- Ability to auto-suggest accurate codes
- Strong underlying AI and NLP models
- Assistance and continued education for coding professionals
- Ability to interoperate with professional side as well as facility side of billing
For healthcare providers on both the inpatient and ambulatory sides, cost efficiency and accurate coding are the need of the hour as profits and financial stability continue to be battered on all sides. Taking an innovative risk to cut costs and improve reimbursements can help stabilize the bottom line.
For organizations that meet the people-process-technology trifecta, single-path coding may just be the risk they need to take.
Leigh Poland (email@example.com) is vice president of AGS Health’s Coding Service Line.
Vivek Menon (firstname.lastname@example.org) is director of customer success at ezDI Inc., an AGS Health company.