Clinical Coding Conference 2014 – Melbourne Patient Costing & Clinical Engagement It Starts With Coding Emma Martin Costing Consultant PowerHealth Solutions
May 07, 2015
Clinical Coding Conference 2014 – Melbourne
Patient Costing & Clinical Engagement
It Starts With Coding
Emma Martin Costing Consultant
PowerHealth Solutions
Patient Costing & Clinical Engagement ― It Starts With Coding
Slide 2
Topics to be covered
National Health Reform
Patient Costing Process
Clinical Coding/CHADx
Patient Costing Results
Q&A
Patient Costing & Clinical Engagement ― It Starts With Coding
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National Health Reform
In 2011, COAG committed to a National Health Reform Agreement to deliver better health care for all Australians & secure the sustainability of health care system into the future
Established 3 Agencies to facilitate: • Independent Hospital Pricing Authority (IHPA) to determine
a national activity-based funding model & efficient price
• National Health Performance Authority to report quarterly on performance of LHNs using an accountability framework & made available publicly
• Australian Commission on Safety & Quality in Health Care to develop, implement & monitor national clinical safety & quality standards.
Patient Costing & Clinical Engagement ― It Starts With Coding
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IHPA – National Efficient Price
Website contains all publications: http://www.ihpa.gov.au/internet/ihpa/publishing.nsf/content/publications-1
IHPA’s key role to determine the annual National Efficient Price (NEP) for health care services.
NEP using an Activity Based Funding (ABF) model forms the basis for calculating the funding provided to Local Health Networks (LHNs) through a single National Health Funding Pool.
2013/14 NEP & weights based on latest National Hospital Cost Data Collection (round 15).
Patient Costing & Clinical Engagement ― It Starts With Coding
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Patient Costing
Key accountability tool to monitor and manage health service costs
Matching hospital general ledger costs to patient encounters
Casemix Classification systems have been developed for different types of patient care
Activity is classified into groups with similar levels of resource utilisation (costs) and similar clinical features
Patient Costing & Clinical Engagement ― It Starts With Coding
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Classification Systems
IHPA defines in-scope public health care services & classification systems:
• Admitted Acute (Inpatient) Services
• AR-DRG v6.x
• Emergency Services
• URG v1.3 (with diagnosis) – SA use
• UDG v1.3 (was v1.2 in 2012/13).
• Non- Admitted (Outpatient) Services
• Tier 2 clinic list v2.0
• Sub-Acute Services
• AN-SNAP v3.0
Patient Costing & Clinical Engagement ― It Starts With Coding
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Inpatient (Admitted Acute) DRGs
AR-DRG classification system
• DRGs determined by ICD diagnoses & procedures
Patient Costing & Clinical Engagement ― It Starts With Coding
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Patient Costing Process
Patient Costing distributes general ledger costs back to patient encounters
3 main stages to Costing Process:
1. Data Load
2. General Ledger Setup overhead and patient care, reorganisation of ledger structures
3. Costing Dataset – Allocation of GL costs to patient encounters
Patient Costing & Clinical Engagement ― It Starts With Coding
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Patient Costing (PPM)
Patient Costing & Clinical Engagement ― It Starts With Coding
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Data Load
To complete patient costing, data is required from numerous health unit source systems
Includes coding data (DRG, Procedure & Diagnosis codes) for each patient encounter, which are a standard classification for both costing & reporting.
Patient Costing & Clinical Engagement ― It Starts With Coding
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PPM Database
Load
PMI
Encounters
Pharmacy
Theatre
Finance
Imaging
Transfers
Source Systems
Data Load
Patient Costing & Clinical Engagement ― It Starts With Coding
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Data Load - Coding
• Coding Diagnosis & Procedure – ICD principal & secondary diagnoses for inpatient encounters
Patient Costing & Clinical Engagement ― It Starts With Coding
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Data Load - Services
• Services ― delivered to patients throughout hospital stay that enables detailed costing (theatre, pathology, imaging, pharmacy, etc)
Patient Costing & Clinical Engagement ― It Starts With Coding
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Costing Dataset Process
Acute Assessment Unit
Allied Health
Day Patient Ward 1
Operating Theatre
Recovery/Anaesthesia
Critical Care Unit
Pharmacy Contract
Patient Care Area Services
2. Map Service Codes to Areas
1. Build Service Codes
AAU-T1
Allied-9555000-4451
OBD-IVF-00111-9440
DRUGS-S334
WardHrs-Ward1
Recovery
OTS-44821-4449DS
Activity Database
Costing Dataset
Built Service Codes
3. Allocate Costs
Patient Care Area $
Patient Care Area Services
+
Costed Services
Patient Costing & Clinical Engagement ― It Starts With Coding
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Coding in the Costing Dataset
The Costing Dataset stage may utilise coding data for 2 of the processes:
Building Service Codes to attach services to patient encounters, using procedure codes
Allocating costs, using DRG service (cost) weights
Patient Costing & Clinical Engagement ― It Starts With Coding
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Service Builder
Procedure codes are used to build services to enable costs to be allocated for areas that don’t have service level data.
Patient Costing & Clinical Engagement ― It Starts With Coding
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DRG Service Weights
Each DRG code can have a service weight for each cost bucket, indicating the relative rate of its resource consumption
Patient Costing & Clinical Engagement ― It Starts With Coding
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Cost Allocation
Relative Value Units (RVU) are used to allocate costs, where the RVU = volume x weight
For example Allied Health (AH) costs allocated to those encounters identified with an AH procedure code & applying AH DRG service weight
Patient Costing & Clinical Engagement ― It Starts With Coding
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Costing Results
Once costs are allocated, can report for both internal health unit & external users (State & Commonwealth Health Depts)
Patient Costing & Clinical Engagement ― It Starts With Coding
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CHADx
Classification of Hospital Acquired Diagnoses
Uses ICD 10 diagnosis codes in combination with condition onset flag
Classifies encounters into 17 different categories including post procedural complications, adverse drug events and accidental injuries
PHS currently developing an add on module for PPM to report on cost and LOS per CHADx encounter
Patient Costing & Clinical Engagement ― It Starts With Coding
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Clinical Coding Role in Funding
Not only does Clinical Coding play a role in determining cost weights, it is used to distribute funding on an activity basis
ABF reforms have put more emphasis on patient costing as basis for future funding.
Medical Record Documentation
Clinical Coding
DRG Assignment
Cost Weights
Funding
Clinicians document conditions and services in the medical record
Documentation extracted, analysed and translated into diagnosis and procedure codes.
Codes/Age/Discharge status used to assign AR-DRGs.
Assigned to each AR-DRG. Average value of treating a patient.
Cost weights used in ABF Model to distribute funds to each LHN
ICD
DRG
Patient Costing & Clinical Engagement ― It Starts With Coding
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Importance of Clinical Coding
Given the impact of clinical coding on the costing & funding process of health units, quality coding is crucial
Clinical coding staff should be educated so that they are aware of the reasons for the importance of their role
Good clinical documentation and a working relationship with clinicians is important.
Patient Costing & Clinical Engagement ― It Starts With Coding
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Case Study What can we do with patient costing?
Quantify operating deficit, comparing patient costing to Casemix funding
Benchmark hospital cost structures
Identify strategies to increase efficiency & financial sustainability
Target audience can be anyone from hospital executive, clinical directors and governing health bodies to hospital staff queries
Patient Costing & Clinical Engagement ― It Starts With Coding
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Cost Analysis
Benchmark hospital inpatient activity using state and national costing studies
Compare LOS, Casemix revenue, all cost buckets and reimbursement rates
Analyse at DRG level to ensure comparability, given different hospital patient profiles.
Patient Costing & Clinical Engagement ― It Starts With Coding
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Cost Analysis
Funding to cost reimbursement rate compared with state and national average
ALOS >> identify top-30 DRGs & associated specialties to find any anomolies
Patient Costing & Clinical Engagement ― It Starts With Coding
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Expensive Cost Buckets
Identify DRGs & associated clinics with higher than average cost structures, which is where further efforts need to be concentrated, eg
Medical S&W – review patient fractions, payroll data (particularly overtime/penalties) & rosters
Nursing S&W – distinguish between LOS (practice) issue and cost/day (skill mix, agency use)
Pathology & Imaging – senior clinicians develop test protocols for common procedures/diagnoses for trainees.
Patient Costing & Clinical Engagement ― It Starts With Coding
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Further Cost Analysis
Prosthesis – further benchmark at a procedure level against sites which record actual use at a patient level
Theatre – further benchmark at procedure level duration and no of clinicians
Hotel – further breakdown to cleaning, orderlies, food, security.
Patient Costing & Clinical Engagement ― It Starts With Coding
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Coding Analysis
Benchmark at DRG group level to check for clinical coding practice differences
Identify top 20 DRGs & clinics, with higher ALOS and lower casemix revenue >> coding or clinical practice issues?
Create Common CC Lists
Patient Costing & Clinical Engagement ― It Starts With Coding
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Educating & Engaging Clinicians
Work together to get costs right & to understand service delivery costs and funding
Critical to educate senior clinicians on basics of patient costing process. We need clinical buy in!
How patient costing contributes to determining cost weights, which are used for future funding
Present the whole picture, show efficiencies as well as outlining areas for improvement
Patient Costing & Clinical Engagement ― It Starts With Coding
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Summary
For patient costing to be useful & comparable across Australia under an ABF framework, it is crucial that health units have quality coding information …
so it starts with clinical coding
Clinical Coding Conference 2014 – Melbourne
Q&A
Emma Martin Costing Consultant
PowerHealth Solutions