The Record

Here’s what you need to know about the DRG Clinical Validation Audit Process and how to provide input

Blue Cross Blue Shield of Michigan is proposing implementation of Diagnosis-related Group Clinical Validation Audits. These audits are scheduled for implementation on Aug. 1, 2022, for Blue Cross’ commercial members.

Clinical validation audits are already being completed for Medicare Plus Blue℠ commercial members.
This proposed audit expansion will ensure that a patient’s diagnosis is consistent with the clinical documentation in the medical record. Audits will confirm that the ICD-10 diagnosis identified by the facility is generating the DRG assignment accurately, in accordance with the Accepted Standards of Medical Practice and Diagnostic Criteria.

The following table provides an overview of the current audit process and the proposed process:

Current DRG Code Audit Process

Proposed DRG Clinical Validation
Audit Process

DRG code identified by the facility is validated based on DRG reimbursement methodology
Review of the physician documentation to determine if the correct ICD-10 diagnosis and procedure codes have been assigned in accordance with AHA Coding Clinic Guidelines
Note: Incorrect ICD-10 codes can impact the final DRG assignment and reimbursement.
Sources: ICD-10 Official Coding Guidelines and Conventions, and AHA Coding Clinic Guidelines
Reviewer requirement: A registered health information administrator, registered health information technician or certified coding specialist who is credentialed with the American Health Information Management Association or American Academy of Professional Coders

Diagnosis identified by the facility is validated based on DRG reimbursement methodology
Clinical review of the physician documentation to determine if the patient diagnosis is consistent with the clinical documentation in the medical record
Uses widely accepted standards of medical practice and peer-reviewed guidelines, citing references on every revision
Ongoing research and literature reviews to ensure criteria and guidelines are always current
Using sepsis 3 criteria on related sepsis claims
Audits will be completed by EquiClaim, a Change Healthcare company. Change Healthcare is an independent company that contracts with Blue Cross to provide audit services.
A Change Healthcare registered nurse will review the medical record and, if the diagnosis billed and the medical documentation don’t match, a Change Healthcare physician will review for validation before sending a finding letter to the facility.
Reviewer requirement: A nurse auditor who is an R.N.

What this means to facilities

This proposed audit process is patient- and physician-focused. Blue Cross has engaged Change Healthcare to use its enhanced analytics, which select claims with the highest potential for clinical errors. This allows us to capture appropriate adjustments while decreasing unnecessary medical records requests.

All audits will be performed by a registered nurse and include a board-certified physician review of every audit finding before it’s sent to the facility. The auditors will come from a variety of clinical backgrounds, offering a wide range of subject matter expertise that includes, but isn’t limited to, surgical and medical intensive care unit experience, as well as cardiac, obstetrics, neonatal and oncology expertise.

The audits will be aligned by specialty and reviewed by a Change Healthcare physician prior to the final audit findings. A Change Healthcare registered nurse will review the medical record and, if the diagnosis billed and the medical documentation don’t match, then a Change Healthcare physician will review for validation before sending a finding letter to the facility.

Additionally, audits will be performed using widely accepted standards of the medical practice and peer-reviewed guidelines, citing references on every revision. There will be ongoing research and literature reviews to confirm that the criteria and guidelines are current.

If there’s an audit dispute, Change Healthcare physicians will be available for peer-to-peer reviews or the facility can submit an appeal through the two-step appeal process. First level appeals are reviewed by Change Healthcare and second level appeals are reviewed by the Physicians Review Organization.

This proposed, updated approach will facilitate more open and transparent communications with facilities to discuss disputes or appeals.

Input requested

Through the Contract Administration Process — part of the Participating Hospital Agreement that went into effect July 1, 2021 — Blue Cross is asking facilities to provide nonbinding input on proposals and initiatives such as this.

All nonbinding facility input is due by Feb. 28, 2022, to Liz Bowman at ebowman@bcbsm.com. Once all the facility input is received, Blue Cross has 30 calendar days to provide an industrywide response.

No portion of this publication may be copied without the express written permission of Blue Cross Blue Shield of Michigan, except that BCBSM participating health care providers may make copies for their personal use. In no event may any portion of this publication be copied or reprinted and used for commercial purposes by any party other than BCBSM.

*CPT codes, descriptions and two-digit numeric modifiers only are copyright 2021 American Medical Association. All rights reserved.