CDI in the Outpatient Setting: Finding the ‘Hidden Gems’ of Opportunity for Improvement

By Kay Merriweather, RHIA, CCS, CCS-P, COC, CHDA, CDIP; Leslie Slater, RHIA, CCDS, CIC, CRC; and Michele Bohley, RHIA, CCS for AHIMA

“If it’s not documented, it wasn’t done.” This is one of the first axioms health information management (HIM) professionals learn. HIM professionals have witnessed the evolution of quality documentation, with patient education becoming the center of healthcare in the future. Value-based purchasing, population health, and patient engagement are all reliant on achieving this goal. The basic concepts of accurate and complete documentation remain the foundation of successful completion of HIM tasks.

Time spent with patients is a critical factor in providing the highest quality of care. As the regulatory landscape within healthcare continues to evolve, providers are challenged with increased administrative burdens and potential negative revenue impact. Risk-based methodologies for quality measures and new payment methodologies are becoming a reality, and for providers to be successful under the risk-based methodologies for quality measures and new payment methodologies that are becoming a reality, they must focus greater attention on documentation of services provided and patient diagnoses.

Expanding CDI programs and activities into outpatient settings has the potential to improve reimbursement, enhance quality measurement scores, drive patient satisfaction higher, and decrease administrative burden and rework for denied claims due to missing or incomplete coding or billing information.

Documentation within the electronic health record (EHR) is the building block for capturing the data elements and ICD-10-CM diagnosis codes required for administrative functions (including billing). In most outpatient care settings, many different healthcare providers are responsible for capturing and documenting the different elements of information during a patient encounter essential to compiling a comprehensive data picture of the patient. For example, the receptionist is responsible for capturing the patient’s insurance and demographic information while the nurse and/or medical assistant typically documents the presenting complaint, vital signs, and initial observations. The provider documents subjective and objective findings from their examination, treatments provided, and follow-up instructions. All of these data points are then captured in the EHR, which ultimately becomes the source document for the physicians, coding professionals, and abstractors to select diagnoses, procedures, and quality data elements. While this may sound simple, there are many areas of potential breakdown within this process.

While EHRs have brought many benefits to providers, just because documentation is now electronic does not mean concerns with specificity and consistency don’t remain. There are still a number of areas within the outpatient EHR that can be improved—the “hidden gems” of opportunity for improvement that all HIM professionals should strive to find.

Much like inpatient CDI, data mining and trending is important and can help prioritize areas of opportunity in the outpatient record. HIM professionals and CDI specialists both have the necessary skills to analyze outpatient data and “dig in” to identify potential documentation and coding treasures. To begin this process, it is important to first perform an analysis of data. First, identify a list of the top 10 unspecified diagnoses. ICD-10-CM has increased the level of coding specificity required, and payers are expecting providers to utilize the more specific codes. The use of unspecified diagnosis codes may lead to denied or rejected claims due to medical necessity or claim edits. By identifying patterns of this type of code usage, specific documentation and coding education can be provided to the healthcare providers to improve their documentation and allow for greater coding specificity. It’s also important to remember to look at the EHR diagnosis drop down lists (also known as “favorites”) to determine if the available options are complete and appropriate. By trending data and providing the necessary education on these topics, improvements can be made to outpatient documentation, coding, and billing.

Focusing an outpatient CDI program on diagnosis coding offers a “quick win” for a physician group or practice. This is especially true as diagnosis coding is becoming increasingly important in the world of risk adjustment. Risk adjustment and Hierarchical Condition Category (HCC) coding is a Medicare Advantage payment model mandated by the Centers for Medicare and Medicaid Services (CMS) and implemented in 2003.1 This model identifies individuals with serious or chronic illness and assigns a risk factor score to the person based upon a combination of the individual’s health conditions and demographic details. The individual’s health conditions are identified via ICD-10-CM diagnoses that are reported by providers on claims submitted to the insurance companies.

CMS requires that documentation in a person’s medical record must be received from one of the three provider types (hospital inpatient, hospital outpatient, and physician) covered by the risk adjustment requirements to support the submitted diagnoses.2 Documentation must support the presence of the condition and indicate the provider’s assessment and/or plan for management of the condition. This must occur at least once each calendar year in order for CMS to recognize that the individual continues to have the condition.

The transition to ICD-10-CM diagnostic coding increased the level of specificity for many common diagnoses. Depending on the practice specialty, this transition requires more attention to documentation and code selection. This is particularly true for certain conditions, such as fractures requiring specificity for site and laterality.

Improper Documentation and Coding of Neoplasms
Another area that often presents documentation challenges is the improper documentation and coding of neoplasms. It is not uncommon to find a medical record with the following documentation: “breast cancer s/p radiation.” This creates a challenge for many outpatient coders and may inadvertently lead to the assignment of unspecified codes or capturing the inappropriate status (active vs. no longer an active problem or “history of” this status). In this case, CDI can have a positive impact on reducing medical necessity denials and increasing proper documentation for HCC diagnoses. Coders can educate physicians and improve communication by querying the provider for clarification. It would be appropriate, in this example, for the coder or CDI specialist to obtain physician clarification for laterality of breast, which quadrant, and whether or not the breast cancer is still under long-term treatment or if the patient successfully finished treatment with no re-occurrence. To seek (and document) this clarification can lead to accurate and complete coding.

Diagnosis coding discrepancies are also often found between the diagnosis codes billed on a claim form vs. the actual written description in the medical record. There may be several possible root causes for these discrepancies, such as a lack of specificity of the clinical documentation within the EHR or potential limitations of the EHR system being utilized.

Regardless of the reason, diagnosis coding remains a challenge in the outpatient setting and there is risk of an increase in “unspecified” diagnosis coding—which has been a focus area for CMS HCC audits. For medical practices that have Medicare Advantage patients, complete documentation to support the capture of HCC diagnoses is important for proper risk adjustment of the patient population being served. This ultimately translates into an impact on reimbursement.

As the focus of diagnosis coding and the documentation to support those diagnoses is increasing, integrating outpatient CDI specialists and coding professionals into the outpatient settings will become more important. While coding guidelines are updated annually, coding guidance is released at least quarterly to help clarify how to apply the guidelines. It is important for all coders and CDI specialists, regardless of clinical setting, to stay current with the ongoing regulatory changes. For example, there was a major change in the FY 2017 ICD-10-CM Official Guidelines for Coding and Reporting in Section 1.A.15. Additional guidance was added to the “With” coding guideline as follows:

The classification presumes a causal relationship between the two conditions linked by these terms in the Alphabetic Index or Tabular List. These conditions should be coded as related even in the absence of provider documentation explicitly linking them, unless the documentation clearly states the conditions are unrelated. For conditions not specifically linked by these relational terms in the classification, provider documentation must link the conditions in order to code them as related.

This addition can impact how coders link chronic conditions with manifestations. It is important for the outpatient coders to become familiar with the new guideline. This new guideline will impact the risk adjustment population for Medicare Advantage patients and for risk adjusted quality measures. If physician offices are not following or are unaware of this new guideline, then an encounter for a patient with diabetes type 2, chronic kidney disease stage 2, and retinopathy may end up being incorrectly reported. This new guideline will also impact the coding of hypertension and heart disease.3 The risk adjustment factor is similar to the MS-DRG relative weight; it is a predictor of the expected health expenditure for that particular condition. So as the Risk Adjustment Factor increases, the expected cost to treat that condition is higher and in turn will represent a higher reimbursement to the provider.

For risk adjustment payment methodologies, it is a requirement to document and report the patient’s chronic conditions on a yearly basis with the provider initiating treatment during a face-to-face encounter. A CDI specialist can support clinicians by reviewing their notes to ensure these chronic conditions are documented during the patient’s yearly examination. Along with pertinent past conditions, the provider should document a review of current medications and the associated diagnosis in the active problem list. A link between diagnoses and procedures performed (surgical and non-surgical) should also be something coders are looking for when coding a record. If a practice is seeing an increase in denials due to medical necessity, they should stop and ask themselves as well as the providers, “Why is this service being performed and does the diagnosis submitted on the claim support this service?”

Further, always keep in mind the outpatient diagnostic coding guidelines. In some instances “symptom” codes are the code of choice for simple or straightforward diagnostic studies. However, for high cost diagnostic procedures and invasive surgical procedures and studies, the use of specific diagnoses is often necessary to meet medical necessity. Many Medicare Administrative Contractors (MACs) have begun to deny these types of procedures if unspecified codes are submitted.

Yet another new twist is coming in the near future—Medicare and other payers will begin to integrate claims data across the continuum of care (i.e., physician practice claims, inpatient hospital claims, outpatient hospital claims, hospice claims, skilled nursing facility claims, etc.). This will allow Medicare and other payers to have a more comprehensive view of the “patient population” and expand the application of risk adjustment methodologies across the continuum of care versus just on an individual basis. This further increases the importance of proper documentation of chronic diseases and the associated manifestations to ensure accurate and complete data collection.

In summary, the process of performing data analytics is only as good as the data that is submitted. For physician practices and hospital systems to accurately reflect the population they are serving and receive accurate and complete reimbursement, it will take a continued commitment of the providers, the coding professionals, and the CDI specialists working together to strive for quality documentation and data reporting. A robust outpatient CDI program can help accomplish this objective. Success in accurate risk assignment scoring and submission of accurate quality data and claims is dependent upon all of the professionals involved working together. Through this collaborative working relationship, providers should feel a decrease in administrative burden, receive the proper reimbursement and incentives, and see quality scores and metrics that are reflective of the acuity of the population they are servicing. Coding professionals and CDI specialists are critical to making this happen and are well-positioned to help drive positive change in the future.


1Centers for Medicare and Medicaid Services. “2017 CMS-HCC Model Updates and Implementation.” July 21, 2016.

2Centers for Medicare and Medicaid Services. “Chapter 7 – Risk Adjustment.” Medicare Managed Care Manual.

3American Hospital Association. ICD-10-CM/PCS Coding Clinic (First Quarter 2017): 47.

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