As the U.S. healthcare system moves inevitably further into value-based care delivery and payment, patient care organizations face increasing challenges with regard to any gaps in clinical documentation. Any such gaps or problems can negatively impact case mix index (CMI), and decrease reimbursement. Some hospitals, medical groups, and health systems are beginning to make progress in this area, among them Florida Hospital, the eight-facility, 2,500-bed Orlando-based integrated health system.
Beginning the clinical documentation solution from the Burlington, Mass.-based Nuance Corporation in the summer of 2014 and completing that implementation across nine hospitals by May 2015, senior Florida Hospital executives were able to make a range of improvements. Among them, use of the solution led to such an improved level of documentation that it allowed the organization to reduce observed-to-expected inpatient mortality rates by 48 percent in less than one year; physicians broadly improved their document and their engagement; and resulting improvements in case mix index have led to a $72.5 million increase in appropriate reimbursement since go-live.
An April 27 press release from Nuance quoted Jeff Hurst, senior vice president and senior finance officer of Florida Hospital as saying that, “Both financially and clinically, implementing Nuance’s CDI program has been a tremendous success. Since deploying, we’ve seen a 29 basis point increase in CMI that equates to a $72.5 million increase in appropriate revenue over two years. Physician participation is also a strong success measurement and we’ve seen up to 92 percent response rates and strong engagement from physicians in our CDI program.”
Hurst spoke recently with HCI Editor-in-Chief Mark Hagland regarding the broad activity in this area. Below are excerpts from that interview.
Tell us about the origins of this initiative.
Certainly. Probably late 2013, we made a decision, for a variety of reasons, given all the changes in the healthcare industry—the focus on reducing costs, improving documentation, and improving publicly reported quality measures, we made the decision to implement a formal clinical documentation improvement program, leveraging the Nuance CDI platform. We launched our first facility in June 2014, and over the next 13 months from June 2014, through May 2015, we brought up each of those eight facilities one by one. By the third quarter of 2015, we were fully implemented from a facility standpoint.
And since then, we’ve been leveraging our performance, with regard to physician engagement. And if you compare our performance prior to and after, we’ve seen significant measurable improvements, in terms of both our financial performance and clinical outcomes, in particular, with regard to our mortality measures. We’ve seen a 29-basis-point improvement in our Medicare PPS case mix index, and for our organization, we see about 40,000 Medicare inpatients a year. And so every one basis point change in case mix index is worth about $2.5 million in additional net revenue reimbursement. So 29 basis points times $2.5 million per basis point, that translates to $72.5 million, as referenced by Nuance. Case mix index in simple terms is a measure of the acuity level of the patient you’re treating. So for lack of a better way of saying it, the sicker your patients, the higher your case mix index.
So improvement means that you’ve lowered their acuity?
No, the way the Medicare payment program works is that there’s something called a blended rate, which is basically the DRG rate they pay you for a case mix index of 1. And as you’re treating more acute patients, that rate is measured higher. And the way Medicare ultimately pays you is that they take the blended rate times the case mix rate for that patient, so you get a payment. So the more acute the patient you’re treating, the more cost you’re incurring for that patient, so the more Medicare will pay you. So Medicare is trying to align your payment rate with the acuity of your patients. So your case mix index ultimately hinges on three things: it hinges on the care you’re providing the patient; on how accurately you document the care you’ve provided to the patient; and, that documentation through our coding team is ultimately translated into specific codes—procedure, diagnosis codes, that get translated into a DRG. So your coding is dependent on the accuracy of your documentation.
So improving your basis points means improving your documentation?
Yes, that’s right. So you are being underpaid if you’re not coding accurately. And secondly, when Medicare and other organizations look at you from a quality standpoint, your quality measures are being understated. So you have every motivation to make sure your documentation is as accurate and thorough as possible, both because of the reimbursement you receive, and because of the quality scores you have that are reported publicly; so documentation is ultimately the key to everything.
So, how did you accomplish this improvement?