“Nothing but good comes from moving DRGs into a pre-pay environment”- Kurt Erikson

Introduced in the 1980s, a DRG (Diagnostic Related Group) is an important component in today’s health care system. Its purpose in categorizing hospitalization costs and determining how much to pay for a patient’s hospital stay allows health plans to pay predetermined amounts based on the DRG instead of paying for each specific service provided. 

The majority of DRGs today are reviewed in a post-pay environment. The post-pay review provides challenges for both provider and payer alike. For the provider, the post-pay DRG review comes with considerable abrasion, often requiring service fees already collected to be returned to the payer after a claims review that sometimes comes a year after payout has occurred. The post-pay environment also leaves the payer in a “pay and chase” mode, as they review DRG claims they’ve already paid, but then must “chase down” the supporting medical record, validate the documentation, and then determine appropriate reimbursement for errors found. The DRG post-pay environment is slow and costly, requiring considerable financial and human resources.

But there’s a new day dawning in the DRG review process that brings DRG into a pre-pay environment, providing an opportunity to create a streamlined process that diminishes administrative burden while lowering costs and saving time.

Where there’s a problem, there’s the opportunity for a solution. Here are some of the common pain points that prevent moving DRG into the pre-pay process: 

1. Claim Selection 

There are numerous considerations to take when selecting which DRG claims to review. While internal historical savings and payment thresholds determine most review selections, there are other reference points to consider in making the determination. By looking for provider trends in the data for outliers, a consistent process can be developed to move the DRG review into pre-pay. With awareness of historical, problematic codes, and length of service (LOS) trends, plans can capitalize on savings opportunities, even while decreasing provider abrasion and drastically reducing review fatigue.

We have the solution that allows for the review of DRG claims in a fraction of the time with more accurate findings and savings.

For a more in-depth dive into the solution to the common pain point of DRG claims selection, check out our article “Moving DRG into the pre-pay process: The Importance of Claim Selection.”

2. Record Exchange Challenge

DRG requests, faxes, emails, online portals, U.S. mail…all the things that make the DRG review process slow and inefficient. Before the DRG claim is ever reviewed, the time required to exchange the record between payer and provider typically causes enough delay to keep the claim from being resolved in pre-pay. From slow delivery times via U.S. mail to file size limitations via fax and online portals, the record exchange has long been stuck in antiquated delivery methods.

Technology has taken the lead in being able to exchange DRG records instantly.

To understand some of the record exchange challenges and see the solution that makes moving DRG into pre-pay possible, read “Moving DRG into the Pre-pay Process: Record Exchange Challenge.”

3. The Review Process

The third pain-point of moving DRG into pre-pay is the actual review itself. After selecting the suspect DRG claim and exchanging the record, it’s now time to review it. Here are some of the challenges associated with the review process:

    • Nurse or coder review fatigue
    • Lacking technology to support the review process
    • Internal policies
    • Complexities of multiple diagnoses
    • Large PDF files to review

Each of these elements hinders the accuracy of findings and savings opportunities in the review process, and make it extremely difficult to manage DRG review in pre-pay. But like the above common pain points to moving DRG into pre-pay, we have a solution for that.

Learn more about the challenges of the review process and the solution to the problem at “Moving DRG into the pre-pay process: The DRG Review.”

There’s A Solution For That

There was once a dog who was lying on the head of a nail that was sticking up out of the porch where he was resting. The dog kept whimpering and sniffing at the nail every time he brushed against it, but he wouldn’t get up and move to another place. A friend asked the owner why the dog wouldn’t move, and the owner responded, “he’s not moving because the pain isn’t bad enough to force him.”

As in all things in life, sometimes we don’t change until the pain is bad enough. That’s no different in our systems and processes in business, and that’s certainly true within the healthcare ecosystem. Sometimes we get used to the pain points and live with them, either because it’s the only way we know or because we don’t know that there are better options out there. There truly is a better way to the DRG review process, and maybe it’s time you take a look!

Our CAVO® end-to-end solution with DRG Review, intakes and extracts data from DRGs, and structures that data into a searchable format for fast and accurate review. Our 5x productivity lift allows nurses and coders to quickly review a DRG claim while increasing accuracy in findings and maximizing savings opportunities…all while diminishing provider abrasion and overall administrative burden.