At the Margins

Considering a physician-office-based CDI program? Here's why you should.

by Eric Fontana and Jamie Landsman

Few hospitals and health systems doubt the financial impact of effective inpatient clinical documentation improvement (CDI) programs. The same principle—that providers must document and code both patient illness and care activities to ensure full payment and minimize audit or denial risk—holds in the physician-office setting as well.

Although physician-office-based CDI programs are far from common, the Financial Leadership Council believes that progressive provider organizations should think closely about investing in them as part of a long-term margin stability strategy. Physician office CDI programs can help in revenue capture in two primary areas: first, by optimizing reimbursement for Medicare Advantage (MA) beneficiaries, for whom payment is tied to proper documentation of chronic disease; and second, by optimizing professional fee capture, particularly for evaluation and management (E&M) visits.

The financial case for investing in CDI will vary significantly across organizations. Providers need to consider three major variables: 1) involvement in Medicare's risk-based payment programs; 2) proportion of revenues coming from professional fees—particularly E&M codes; and 3) IT integration with their physicians, which is critical for monitoring and improving documentation practices.

Physician office CDI programs can differ substantially depending on provider goals. Nonetheless, when considering developing physician-office CDI capabilities, providers should bear in mind the following three key lessons, which the Financial Leadership Council has developed during ongoing research.

1. The greatest financial opportunity for physician-office CDI will be for providers with significant revenues from MA or Medicare ACO participants

MA pays insurers a per-member-per-month (PMPM) payment for every beneficiary that is risk adjusted to account for the greater utilization associated with sicker patients. The so-called "risk adjustment factor" (RAF) depends on the appropriate documentation and coding of chronic conditions via 79 Hierarchical Condition Categories (HCCs) corresponding to over 9,000 distinct ICD-10 diagnosis codes. The vast majority of codes driving RAF scores are generated during primary care visits.

2. Inpatient CDI programs are not directly exportable to the physician-office setting

The higher volume and lower payment-per-case, the brevity of the typical office visit, and the divergent coding frameworks used differentiate physician-office CDI from its inpatient counterpart. For these and other reasons, simply expanding the purview of existing inpatient CDI programs will not be effective.

3. Physician-office CDI impacts quality and outcomes.

The case for physician-office CDI is not only financial. Details of patient illness captured in physician offices can be crucial to delivering appropriate care and ensuring positive outcomes. As such, physician-office CDI is an opportunity for finance and clinical teams to work together to advance common objectives.

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