February 25, 2020


Is your coding quality maintenance program well-rounded?

While the depth and detail of coding quality maintenance programs vary depending on an organization’s specific needs, frequent audits using a mixture of chart selection methodologies will result in the most complete, well-rounded coding quality maintenance program. Performing one annual coding audit of 30 randomly selected records per coder is too limited and does not support a well-rounded plan. 

The benefits of coding audits

Organizations should strive for a complete and accurate clinical database.  While accurate coding is vital to reimbursement, accurate and complete coding is also imperative for:

  • Accurate case mix index (CMI)
  • Accurate reflection of the severity of illness (SOI)/risk of mortality (ROM)
  • Support of medical necessity for services rendered
  • Support of decision to admit/medical necessity for inpatient status; correct place of service status
  • Ward off government and payor scrutiny in the form of RAC, OIG, ZPIC, MIC, MAC, etc.
  • Improved comparison studies and profiling/scorecards
    • e.g., HealthGrades, Leapfrog, state comparison studies, PEPPER reports, PQRS
  • Support of resource consumption and length of stay
  • Support of contract negotiations (payors for managed health care)
  • Decreased number of rejections and denials, including
  • Hospital Acquired Condition/Present on Admission concerns and discharge disposition issues
  • Assistance with research, outcomes analysis, quality of care, critical pathway development and wellness initiatives
  • Reduced penalties related to 30-day readmissions; the excess readmission ratio includes adjustments for factors that are clinically relevant, including comorbidities
  • Accurate planning for population management and accountable care data analytics

One way to assure a complete and accurate database is to perform periodic coding and documentation audits through a well-rounded coding quality maintenance program.

Developing a coding quality maintenance program

Detailed planning is needed in the creation of a well-rounded coding quality maintenance plan.  Various details that should be considered include:

  • The frequency of audits: daily pre-bill, monthly, quarterly, semi-annual, annual
  • The scope of what will be reviewed: 
    • Inpatient DRG validation only or full coding quality review,
    • MS and/or APR DRG    
    • Which outpatient service types to include and if the review will include injection and infusion services and facility E/M
    • Professional fee specialties to include
  • The volumes to review
  • The chart selection methodology
    • Concurrent/pre-bill or retrospective
    • Dates of service of the encounters to review
    • Which payers to include 
    • Random versus targeted

How the audit sampling is selected is one of the most important considerations.  Various methodologies, each with their benefits and limitations, can yield differing returns.  To maintain a well-rounded approach, a coding quality maintenance plan should include a variety of audit sampling approaches. 

Approaches to sampling for coding audits should include:

  • Random selection of encounters across all coders and payers
  • Random selection of inpatients from the top MS-DRGs by volume and random selection of outpatient or professional fee encounters from the most frequently reported APCs or CPTs or diagnoses
  • Targeted sampling based on high-risk DRGs as identified from prior review results, PEPPER reports, OIG and RAC targets

By alternating random and targeted chart selection for each review, organizations can achieve the benefits that are offered by the separate audit sampling approaches.   

All health care organizations should maintain a robust coding quality compliance plan with ongoing monitoring and evaluation, strong coder feedback and education to promote consistency in complete and accurate reporting of a facility’s patient population.

Choosing a coding audit vendor:

A trusted business partner can be invaluable in helping your organization develop and maintain a robust coding quality maintenance program. When choosing a vendor to perform coding audits, consider the following:

  • Range of services – Choose a partner with the ability to perform a wide variety of audit types including inpatient, outpatient, and professional fee.
  • Reporting capabilities – Make sure the vendor will offer statistical findings that will help identify patterns and trends in coding and documentation.
  • Education –  The vendor should have the ability to identify specific areas of educational needs with the ability to offer the education needed.
  • Audit process – Review the audit and communication process with the vendor to ensure it includes a strong coder involvement in the audit process, allowing for coder comments with a dispute resolution process.
  • Auditors– Request information about the vendor’s audit staff in terms of their experience, credentials, education, tenure and training.
  • References – Ask for and check references.



Lisa Marks, VP of HIM Services