Prolific Payoff

It's not just Medicare and commercial payers who are paying attention.

"With healthcare consumerism, patients are much more responsible for their care financially, so they're more concerned with who is providing good-quality care and the cost of it," Borgstede says. "We can't afford to not be paid appropriately because we haven't documented well or because we don't have a good process in place to really capture that revenue."

Documenting key
Establishing common prices across the system is only one piece of the equation. Ochsner's DRG documentation assurance program allows nurse specialists to review charts for inaccuracies and downcoding, where physicians don't appropriately document the full extent of their work on patients, Borgstede says. This team is charged with eliminating ambiguity.

The team is supported in this effort not only by the vice president of finance, but also the VP of medical affairs and the associate medical directors, who have been highly involved in formulating Ochsner's revenue integrity team. Not surprisingly, any such initiatives fall down without explicit support from physician leadership. "They have been very helpful in helping us communicate the importance of physicians' engagement," says Borgstede.

Rate of return
Ochsner hired 3M to establish a baseline and work on areas that need improvement in its DRG quality assurance program; the system also enlisted Ernst & Young to help establish the pathways by which the teams are to work together. The system is gaining multiple millions in additional revenues for the expense of forming the revenue integrity team—equivalent to about 10 to 1 multiple on salary. "From the main campus alone it's $5 million, and we're spending around $500,000 to do it," Borgstede says. "That's hard benefits but doesn't factor in all the soft benefits from better quality care and better quality reporting."

Ochsner is now rolling out its DRG quality assurance program to its community hospitals. In its first month of implementation in April, one of the hospitals experienced an estimated $130,000 improvement on what would have been billed under the previous system, says Borgstede. "We think there's probably a conservative estimate of $500,000 per year, per 100- to 120-bed hospital in this," Borgstede says. "And it could be as much as a million for each hospital per year."

Ochsner has hired third-party coding auditors who check its internal coders for accuracy. "We're taking that audit info to educate and develop our coders," says Borgstede. In one quarter, Ochsner has seen its coding error rate at the main hospital reduced from 8% to 3%.