Clinical Coding Conference 2014 – Melbourne

Patient Costing & Clinical Engagement
It Starts With Coding
Emma Martin

Cost...
Topics to be covered
National Health Reform
Patient Costing Process
Clinical Coding/CHADx
Patient Costing Results

Q&A
Pat...
National Health Reform
 In 2011, COAG committed to a National Health
Reform Agreement to deliver better health care
for a...
IHPA – National Efficient Price
 Website contains all publications:

http://www.ihpa.gov.au/internet/ihpa/publishing.nsf/...
Patient Costing
 Key accountability tool to monitor and manage
health service costs
 Matching hospital general ledger co...
Classification Systems
 IHPA defines in-scope public health care services &
classification systems:
• Admitted Acute (Inp...
Inpatient (Admitted Acute) DRGs


AR-DRG classification system
• DRGs determined by ICD diagnoses & procedures

Patient C...
Patient Costing Process
Patient Costing distributes general ledger
costs back to patient encounters
3 main stages to Costi...
Patient Costing (PPM)

Patient Costing & Clinical Engagement ― It Starts With Coding

Slide 9
Data Load
 To complete patient costing, data is

required from numerous health unit
source systems
 Includes coding data...
Data Load
PMI

Encounters

Pharmacy

Source
Systems

Load
Theatre

Imaging

PPM
Database

Transfers

Finance

Patient Cost...
Data Load - Coding
•

Coding Diagnosis & Procedure – ICD principal &
secondary diagnoses for inpatient encounters

Patient...
Data Load - Services
•

Services ― delivered to patients throughout hospital
stay that enables detailed costing (theatre, ...
Costing Dataset Process
1. Build
Service
Activity Codes

2. Map Service
Codes to Areas
Built
Service Codes

Database

Pati...
Coding in the Costing Dataset

The Costing Dataset stage may utilise
coding data for 2 of the processes:
 Building Servic...
Service Builder
Procedure codes are used to build services to enable costs to be
allocated for areas that don’t have servi...
DRG Service Weights
Each DRG code can have a service weight for each cost bucket,
indicating the relative rate of its reso...
Cost Allocation
 Relative Value Units (RVU) are used to allocate costs,

where the RVU = volume x weight
 For example
Al...
Costing Results
Once costs are allocated, can report for both internal health
unit & external users (State & Commonwealth ...
CHADx
 Classification of Hospital Acquired
Diagnoses
 Uses ICD 10 diagnosis codes in
combination with condition onset fl...
Clinical Coding Role in Funding
 Not only does Clinical Coding play a role in
determining cost weights, it is used to dis...
Importance of Clinical Coding
 Given the impact of clinical coding on the
costing & funding process of health units,
qual...
Case Study

What can we do with patient costing?

 Quantify operating deficit, comparing
patient costing to Casemix fundi...
Cost Analysis
Benchmark hospital inpatient activity
using state and national costing studies
Compare LOS, Casemix revenu...
Cost Analysis

 Funding to cost reimbursement rate compared with
state and national average
 ALOS >> identify top-30 DRG...
Expensive Cost Buckets
Identify DRGs & associated clinics with higher than
average cost structures, which is where further...
Further Cost Analysis

 Prosthesis – further benchmark at a procedure
level against sites which record actual use at a
pa...
Coding Analysis
 Benchmark at DRG group level to check for
clinical coding practice differences
 Identify top 20 DRGs & ...
Educating & Engaging Clinicians
 Work together to get costs right & to
understand service delivery costs and funding

 C...
Summary
For patient costing to be useful
& comparable across Australia
under an ABF framework, it is
crucial that health u...
Clinical Coding Conference 2014 – Melbourne

Q&A
Emma Martin

Costing Consultant
PowerHealth Solutions
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Emma Martin PowerHealth Solutions - Case Study: Patient Costing & Clinical Engagement – It Starts with Coding

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Emma Martin, Costing/ABF Consultant at PowerHealth Solutions presented this at the 5th Annual Clinical Documentation, Coding and Analysis Conference. This event is the only case study led conference in Australia looking solely at clinical documentation, coding and analysis.

For more information, please visit http://www.healthcareconferences.com.au/clinicaldocs

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Emma Martin PowerHealth Solutions - Case Study: Patient Costing & Clinical Engagement – It Starts with Coding

  1. 1. Clinical Coding Conference 2014 – Melbourne Patient Costing & Clinical Engagement It Starts With Coding Emma Martin Costing Consultant PowerHealth Solutions
  2. 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 Slide 2
  3. 3. 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 Slide 3
  4. 4. 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 Slide 4
  5. 5. 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 Slide 5
  6. 6. 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 Slide 6
  7. 7. Inpatient (Admitted Acute) DRGs  AR-DRG classification system • DRGs determined by ICD diagnoses & procedures Patient Costing & Clinical Engagement ― It Starts With Coding Slide 7
  8. 8. 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 Slide 8
  9. 9. Patient Costing (PPM) Patient Costing & Clinical Engagement ― It Starts With Coding Slide 9
  10. 10. 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 Slide 10
  11. 11. Data Load PMI Encounters Pharmacy Source Systems Load Theatre Imaging PPM Database Transfers Finance Patient Costing & Clinical Engagement ― It Starts With Coding Slide 11
  12. 12. Data Load - Coding • Coding Diagnosis & Procedure – ICD principal & secondary diagnoses for inpatient encounters Patient Costing & Clinical Engagement ― It Starts With Coding Slide 12
  13. 13. 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 Slide 13
  14. 14. Costing Dataset Process 1. Build Service Activity Codes 2. Map Service Codes to Areas Built Service Codes Database Patient Care Area Services Acute Assessment Unit AAU-T1 Allied-9555000-4451 Day Patient Ward 1 OBD-IVF-00111-9440 Operating Theatre DRUGS-S334 Recovery/Anaesthesia WardHrs-Ward1 Critical Care Unit Recovery Costing Dataset Allied Health Pharmacy Contract OTS-44821-4449DS 3. Allocate Costs Patient Care Area Services + Costed Services Patient Care Area $ Patient Costing & Clinical Engagement ― It Starts With Coding Slide 14
  15. 15. 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 Slide 15
  16. 16. 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 Slide 16
  17. 17. 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 Slide 17
  18. 18. 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 Slide 18
  19. 19. 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 Slide 19
  20. 20. 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 Slide 20
  21. 21. 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 Clinicians document conditions and services in the medical record ICD Clinical Coding Documentation extracted, analysed and translated into diagnosis and procedure codes. DRG DRG Assignment Cost Weights Funding 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 Patient Costing & Clinical Engagement ― It Starts With Coding Slide 21
  22. 22. 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 Slide 22
  23. 23. 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 Slide 23
  24. 24. 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 Slide 24
  25. 25. 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 Slide 25
  26. 26. 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 Slide 26
  27. 27. 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 Slide 27
  28. 28. 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 Slide 28
  29. 29. 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 Slide 29
  30. 30. 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 Patient Costing & Clinical Engagement ― It Starts With Coding Slide 30
  31. 31. Clinical Coding Conference 2014 – Melbourne Q&A Emma Martin Costing Consultant PowerHealth Solutions

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