Why physicians must act now to address outpatient documentation challenges

Big changes to Medicare coding guidelines for outpatient evaluation and management (E/M) services take effect in 2021, reflecting new federal policies aimed at reducing administrative work for care providers.

In addition to no longer calculating certain elements for code selection and giving physicians more flexibility in classifying their documentation, the new guidelines will alter criteria to place a greater focus on activities directly related to patient care medical decision-making. Starting on Jan. 1, 2021, time spent obtaining or reviewing patient records and tests prior to a visit, plus ordering medications or procedures, will be calculated by the “total time” the provider spent on that day. The same goes for counseling patients, family members, and caregivers, among other tasks. Pre-charting the day(s) before will not count. And any other staff work will not be added to that time, only the billing provider.

Officials at the Centers for Medicare and Medicaid Services have worked closely with industry groups to simplify the guidelines, and most experts believe the transition to the new rules will be smooth. That said, the shift won’t eliminate all of the documentation and billing challenges provider organizations face as the healthcare sector continues to evolve.

New guidelines, old challenges

A driving factor behind the decision to overhaul the old guidelines is the reality that revenue cycle management, or RCM, departments are increasingly reliant on coding and documentation to support the claims and payment processes. Within many organizations, a single coder tasked with reviewing coding and documentation is simultaneously charged with evaluating risk. If and when questions about completed charts arise, physicians rarely have the bandwidth to provide timely answers.

Given the expansion of CDI coverage to additional service lines, including outpatient and emergency departments, a lack of physician engagement represents a substantial barrier to implementing effective programs.

While the new rules will reduce complexity to an extent, there is still a need for greater collaboration between inpatient and outpatient departments to meet coding requirements as outpatient processing volume grows and margins shrink. Providers relying on fragmented legacy documentation systems — which generally make information sharing between departments more difficult — will continue to struggle when it comes to accurately capturing data on patient conditions and treatments. As a result, these providers will risk not receiving adequate reimbursement for certain treatments due to overlooked criteria.

If that fate is to be avoided, silos must disappear, and the entire process must become more efficient.

Changing outpatient dynamics

The share of outpatient revenue as a portion of total hospital revenue has nearly doubled over the past decade. Thanks to recent advances in clinical technology, consumer desire to avoid hospitals in light of the ongoing COVID-19 pandemic and a number of other factors, demand for outpatient services should continue to grow in 2021 and beyond. That trend, combined with an uptick in industry M&A activity and new incentive programs that pressure providers into investing in outpatient services, will place a continual strain on outpatient revenue integrity. Documentation gaps and coding oversights will become even harder to identify, address, and remediate.

In this context, provider organizations can take a number of steps to ease the coding and documentation burden in the months and years ahead. Here are three big ones:

1. Equip coders with adequate tools. Computer-assisted coding now plays a critical role in most modern healthcare environments. With the help of CAC technology, coders are better able to spot documentation gaps, verify coding accuracy, and properly score risks. Thanks to ongoing advances in artificial intelligence (and AI technologies like machine learning and natural language processing), these tools are becoming increasingly sophisticated, giving coders unprecedented visibility into patient health. Coding and RCM managers must continue to implement them to combat the challenges ahead.
2.  Prioritize physician education. Health information management leaders must ensure that physicians have the knowledge needed to close persistent documentation gaps. Fortunately, the 2021 E/M guidelines should reduce the time physicians spend on administrative tasks, ostensibly creating more opportunities for them to participate in targeted training activities. Without the right knowledge, physicians will continue to make the same documentation errors and coders will continue to waste time correcting them.
3. Align hospital revenue cycle departments. By combining (or at least coordinating) inpatient and outpatient revenue cycle management functions, providers can develop a clearer picture of utilizations and revenue as the importance of outpatient services increases. This enhanced visibility won’t just contribute to better patient outcomes; it will also help providers stay financially solvent by allowing them to more easily identify patient populations that require value-based care. RCM leaders can lean on CAC features like real-time transcription to aggregate data and pinpoint documentation inefficiencies and flawed risk-scoring approaches.

The coding and documentation challenges facing the healthcare industry won’t be solved overnight (although things should get easier come the new year). Even with the new guidelines in place, provider organizations will continue to face an array of obstacles that, if not adequately addressed, represent a threat to their very existence and to the public health of our nation.