New laws and regulations, federal and state payment reforms, and ongoing payer initiatives are aligning quality outcomes with financial incentives and reimbursement. Accurate capture of patient severity and post-admission complications in physician documentation not only affects payment, but also impacts a hospital's case mix index, which influences financial performance and quality reports made available to consumers. At the same time, federal programs such as the Medicare Recovery Audit Contractors (RACs) and ICD-10 implementation are making the documentation process even more complex.

There's no question that all of these changes are having a profound impact on the bottom line for many healthcare facilities. How, and how much, depends on an organization's ability to analyze and address its quality outcomes data. Are physicians documenting all secondary diagnoses? Have they captured all conditions present on admission? How complete and accurate is coding given the new regulations?

Facilities that have not adequately addressed issues identified in quality outcomes data are seeing spikes in claim denials and time-consuming retrospective coding inquiries, which can substantially increase accounts receivable (A/R) days. In contrast, a program that addresses outcomes data through a documentation improvement initiative can result in a significant return on investment, with the average facility reporting a two to four percent increase in case mix index within the first year, typically resulting in a 4:1 financial return.

This presentation will also describe documentation improvement best practices developed by the Cleveland Clinic. Through a collaborative effort with medical staff leadership, the organization found that more precise physician documentation not only led to more accurate quality scores and performance ratings, but also resulted in more accurate measurement of resource consumption, and improved revenue through better capture of patient acuity and more accurate reimbursement. Cleveland Clinic saw an increase in case mix index of 3% in the first three months after initiating a program to analyze its data and improve documentation.

Presenters will outline a process for addressing quality benchmarks in the face of new and changing regulations, including how to:

1. Compare your hospital's performance with industry norms and peer groups to identify variances.

2. Quantify your organization's most significant opportunities for improvement:
- Change in Case Mix;
- CC and MCC capture rates and the impact on reimbursement;
- Service-line performance under MS-DRGs;
- Understatement of severity of illness and risk of mortality in quality report cards.

3. Establish appropriate goals and areas of focus:
- Improve the accuracy of hospital and physician quality report cards;
- Utilizing the data to reduce costs and LOS;
- Provide better information for planning, measuring patient care, and performing physician profiling;
- Appropriate and supportable reimbursement;
- Decreased chart completion issues, denials, A/R days;
- Better staff understanding of compliance issues and regulatory standards.

4. Sustain financial gains while maintaining regulatory compliance with automated tools and processes:
- Automated flags, alerts, and clinical indicators, generated concurrently;
- Ongoing education and monitoring for documentation specialists and coders;
- More precise and complete physician queries.

Taking a proactive stance in addressing payment reform challenges can have a profound impact on a healthcare provider's efficiency, quality of care, reputation, and profitability. As competition gets tighter and the rules governing payment continue to evolve and change, meeting such performance objectives will help build market share and protect revenue--the two best hedges against evolving federal and state payment changes.