Moving DRG Into The Prepay Process: The Importance of Claim Selection

To effectively move inot DRG prepay process, it’s important for health plans to decide which claims they want to work and when.

Workflow factors ultimately determine the ability of a plan to manage DRG the prepay process, including but not limited to:

  • Number of staff to review claims
  • Bandwidth of staff
  • Number of claims to review
  • Policy agreements with providers on DRG payment thresholds
  • Workflow systems that manage the claims review process

How Does A Plan Determine What Claims To Work And When?

Look For Provider Trends       

Historically, the health care system has had problematic diagnosis codes that produce high error rates. For example, in the report “2019 Medicare Fee-for-Service Supplemental Improper Payment Data,” the Centers for Medicare & Medicaid Services (CMS) identified Hospital Care Codes 99223 and Outpatient E/M Code 99214 as the top 2 codes that produce the highest error rates. Knowing problematic error codes allows coders and nurses to quickly identify common errors in the DRG review.

 Length of Service

Another key factor in determining which DRGs to work is reviewing the length of service (LOS) provided to the patient. DRGs with LOS less than three days are the core of reviews. However, the process of reviewing any DRG in prepay is outside of the current norm. A short LOS might indicate that the main diagnosis is not supported in the medical record, while a long LOS might indicate that the patient was not discharged in a time frame that is consistent with the LOS typically expected for that DRG, yet both of these cases warrant review, albeit for different reasons.

Short LOS DRGs are likely to have coding errors that don’t support inpatient care. Longer LOS DRGs are typically more complicated with more codes to validate within that DRG, especially when complication or comorbidity (CC) or a major complication or comorbidity (MCC) is associated with the diagnosis. While selecting a long LOS DRG to review to find savings may be more tempting, the CMS report referenced above reveals that a LOS of two days or less is more prone to errors.

While there may be larger sums to save through a longer LOS review, it also takes more time and staff resources to review accurately. Shorter LOS are often not reviewed, as the opportunity cost of finding smaller amounts paid in error doesn’t necessarily justify paying the staff to review manually. This is a potential two-edged sword that can lead to missing out on savings opportunities:

Longer LOS stays produce more complicated DRGs, and because of manual processes, there is the risk of missing out on savings opportunities based simply on human error.
Savings opportunities are missed on shorter service stays because they don’t meet the minimum thresholds of what the plan has set for their DRG review workflow.
Savings opportunities are also missed because of review fatigue. Manually reviewing DRGs produces fatigue that leads to inaccurate findings while slowing the process, as nurses and coders get tired. 

These factors need to be considered in understanding provider trends, so the necessary actions can be taken to effectively move DRG into prepay. When you update your claims selection by considering provider trends, this reduces provider abrasion and reduces review fatigue. The trends provide a baseline understanding of the provider, allowing the plan to adapt and provide feedback that leads to more accurate coding and findings for both provider and plan.

Making The Move

The DRG prepay game can shift in the blink of an eye. How so? By understanding the digital solutions available for DRG reviews, a plan can shift an entire workflow to review more DRGs with less staff required while increasing accuracy and findings, leading to massive savings.

Our CAVO® platform, along with our CAVO® Predict solution, changes the game in DRG review. Coders and nurses can scrap the mounds of paper and hours of manual review in exchange for technology that pinpoints information needed to make decisions 300+% faster. This productivity lift allows plans to review more DRGs, including opening the workflow to review lower dollar DRGs. Additionally, by leveraging CAVO® Predict, common coding errors are recorded for future reviews, allowing consistency and accuracy, with speed, in findings.

One of the most significant ways to determine what DRG claims to work is by looking for provider trends in data, looking for outliers. When a DRG billing frequency exceeds the expected distribution for a particular facility type and location, those claims need to be reviewed. For example, if a provider is frequently billing for sepsis along with UTI, these claims need to be reviewed for urosepsis. Finding this provider trend allows the plan to review the claim to ensure that the correct DRG is being used for accurate billing.  

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