Aligning diagnosis codes on the Minimum Data Set (MDS) with claim forms used to bill Medicare and Medicaid can’t be understated, especially considering annual revenue losses of $25,000 to $30,000 per nursing home as a result of incorrect coding.

Billing software and careful use of the ICD-10 manual, along with close collaboration across care teams, are all crucial in helping nursing homes avoid denials and audits stemming from claim denials, according to Sarah Scott, senior client success coordinator for nursing home consulting company Simple.

Scott spoke about the most common denials tied to incorrect coding during a webinar on Thursday, along with Alicia Cantinieri, managing director of clinical reimbursement and regulatory compliance for Zimmet Healthcare. Cantinieri and Scott also touched on the pitfalls seen in the coding process, and shared the best tips for getting a claim accepted the first time.

“Our purpose is to get a clear medical picture by using diagnosis codes, and we always want to code to the highest specificity,” said Cantinieri. “We have to continue to subdivide down until we’re at the most specific diagnosis code … because if we don’t, our claim is going to bounce right back.”

Minimizing claim denials particularly when it comes to managed care payers can be done by understanding the most recent ICD-10 rules and using them accurately. The MDS is updated annually in October and April.

Denial pitfalls and additional guidance

Certain diagnoses can’t be grouped together and can lead to a claims denial, while in other cases diagnoses can be grouped but need supporting documentation, Scott said. Another coding risk stems from utilizing diagnosis “shopping” with online tools, or overusing the same diagnosis codes for multiple patients.

Such practices can flag audits as well as denials, she said.

About 17.5% of total claims had a “Excludes 1” denial, denial refers to two conditions that shouldn’t be coded together, usually because one is a congenital form and the other is an acquired form of the same disease, Scott said.

This is a statistic that is expected to increase as more rules are added, she said.

“We’re seeing that the Excludes 1 claims denials are seemingly more prevalent a lot among our managed care payers,” added Scott. “The goal is to monitor these in order to prevent them. So tracking the volume of the denials that we’re getting, what type a specific payer maybe, and what is the reason for these denials, all with the cause to prevent these from occurring.”

Top denial contributors include codes on difficulty walking and weakness – they can’t be coded alongside certain other conditions due to “Excludes 1” conflicts, Scott said.

“It’s something that is so prevalent and occurring very frequently and resulting in this delayed or lost revenue,” noted Scott.

Scott dipped into “Excludes 2” denials as well, which happen when a condition isn’t part of the primary condition but may co-exist and can be coded together with appropriate documentation that supports both diagnoses.

In the case of “Excludes 2” denials, comparison with medical records can lead to correction or an appeal, Scott said, given dual coding is allowed here with sufficient documentation.

Ultimately, diagnosis selection needs to reflect the actual reason for the skilled nursing stay. This might differ from the hospital’s primary diagnosis if circumstances changed, Scott said. Using proper mapping tools and updated software can help keep staffers on track.

Diagnoses need to be supported by documentation in the “seven-day look back period,” Scott said, and be considered an “active” diagnosis even if it’s chronic.

Tips for claim submissions

Cantinieri said it’s important for the principal diagnosis to reflect the reason for admission to the skilled nursing facility, and coding should be supported of course by proper documentation, starting from hospital admission all the way through discharge.

Diagnosis coding is a collaborative endeavor, Cantinieri said. It’s an interdisciplinary task involving physicians, nurses, social workers and rehabilitation staff, among others. Documentation including discharge summaries and operative reports from the hospital, and paperwork detailing changes in conditions, readmissions and therapy modifications all need to be “translated” into ICD-10 codes within the MDS, noted Cantinieri.

Scott emphasized the need for supporting documentation as well, as providers must validate diagnoses cited by other disciplines, like dietician-noted malnutrition.

Educating the interdisciplinary team on ICD-10 coding practices and updates helps reduce errors, added Scott.

Another tip: any sort of query to physicians from nursing home staff coders needs to include multiple supported diagnosis options, avoid leading language and not mention reimbursement impact, Scott said. Templates for physician queries should be customizable and allow providers to enter their own diagnoses.

“If our diagnosis isn’t clear or there’s a contradiction, we want to use the medical record and the coding guidelines, or we can query the provider,” noted Cantinieri.

It’s a heavy lift to ensure forms are accurately coded, and MDS coders don’t need formal certification, Cantinieri said. Instead, coders are required to have a solid understanding of coding rules and compliance requirements, in order to obtain accurate, compliant and reimbursable diagnosis coding in nursing homes, she added.