When Your Financial Return on Investment May Not Calculate

I recently had a conversation with a CFO of a large academic medical center regarding the significant financial headwind all hospitals and health systems are currently facing for a multitude of reasons highlighted by inflation, high labor costs associated with contract labor usage and recruitment challenges, supply cost increases to name just a few. Compounding these inflationary processes is higher patient acuity attributable to patients' foregoing healthcare during the pandemic and a slow return to volumes of planned surgeries that are generally a profit center for most hospitals and health systems. One savior the CFO mentioned in our conversation was their Clinical Documentation Integrity Program was producing greats fruits to capture additional diagnose such as "CCs or MCCs' that impact reimbursement and future Case Mix-Index or so thought the CFO.

Clinical Documentation Integrity Programs- Are They Really Effective

 Clinical Documentation Integrity programs have been marketed, pushed, and billed as an initiative to bring in more much needed revenue for the hospital through deployment of Clinical Documentation Integrity professionals who scour through the medical record identifying opportunities for clarification of additional revenue impacting diagnoses with written queries as the hallmark and forefront of CDI. The query process is the primary means that the CDI professional utilizes in seeking clarification and documentation of an additional diagnosis or diagnoses. Great dependence upon the use of queries as the mainstay of CDI is evident by the recent update of the AHIMA/ ACDIS Guidelines for Achieving a Compliant Query Practice-2022 (Practice Brief)

 CFOs are sold on investing in a Clinical Documentation Integrity program by consulting companies along with their costly CDI software that enhances overall efficiency of their CDI nurses reviewing records and issuing queries with the pitch that CDI brings in substantial amount of revenue. A major pitch to CFOs commonly evolves around statements such as "your CMI and CC/MCC Capture rate is low compared to your peer hospitals" or "your leaving two million dollars on the table, sign here and we can close that gap within the first year." This brings up the adage, "If it is too good to be true, it probably is not true."

Determining Actual Return on Investment

Are CDI programs truly effective in generating additional revenue for the CFO when you do the math? In many instances CDI programs are cost centers versus revenue generators when one factors in the costs associated with operating a program compared to the revenue brought in by the program. When calculating the real return on investment for any CDI program the CFO must consider the following points:

Consider the following to measure true return on your investment in the CDI program

1- Case Mix Index increases on paper are not a realistic measure of CDI performance as this is a gross number that does not consider your clinical validation denials & DRG downgrades that ultimately result in a lower CMI than the CFO is led to think

2- Case Mix Index increase may potentially provide additional revenue next year. You can't pay your bills this year with CMI, what matters most is net patient revenue this year

3- Querying for financial impact has the tendency to generate more payer denials. You must consider how much money is being spent to appeal claims for CC/MCC Capture secured by CDI that now needs to be appealed for clinical validation or DRG downgrade

4- Traditional task-based CDI KPIs are not a valid and reliable measure of CDI performance. CC/MCC Capture Rate does not necessarily turn into additional revenue with payers increasingly denying coding based upon clinical validation, either not reimbursing for the coded diagnosis or recouping monies post record audit. Number of charts reviewed, and queries issued, physician query response rate, physician query agreement rate, and coder CDI DRG agreement rate do not equate to actual achievement of documentation integrity. Witness the volume and dollar amount of payer denials where CDI may have been able to impact and alleviate these denials through a proactive preemptive denial's avoidance approach to documentation integrity

5- What are the direct and indirect costs of operating a CDI program when compared to the additional revenue generated by the program. Calculate both costs in operating the CDI program and compare with the additional net patient revenue generated including the cost to collect and time value of money. Examine how much revenue on average monthly is tied up in coded and billed accounts that are currently in appeal for DRG and level of care downgrades, clinical validation denials and medical necessity denials

 Bottom Line- The Bigger Picture

If you already have a CDI program, now is the time to revisit the program's real performance beyond the traditional KPIs that are imprecise. You must consider the direct & indirect expenditures associated with the CDI program, calculate the costs associated with increasing the CMI & CC/MCC Capture Rate, take into the payer clinical validation denials & DRG downgrades with costs to appeal & time value of money. Only then can you gain a true sense of ROI of your CDI program. I call your attention to a Becker's article titled Hospitals losing billions to rising costs, denials, and takebacks. (Hospitals Losing Billions) I submit to you that your current CDI program is likely contributing to avoidable self-inflicted payer denials that is causing economic hardship to your revenue cycle.

Reach out to me for additional information on how Core-CDI's program achieves meaningful measurable return on investment. My physician team and I have consistently demonstrated there is a better way to a Clinical Documentation Improvement Team. We actively drive down unnecessary costly payer denials through a truly physician documentation approach that embraces the far better concept of proactive preemptive denials avoidance approach to documentation integrity. ROI through physician collaboration.