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Diagnosis Related Grouper (DRG) coding requires that diagnostic and procedural information and the discharge status of the Member, as coded and reported by the hospital, match both the attending physician’s description of and the information of services provided contained in the Member’s medical record. DRG Validation is a process used in healthcare to ensure that the codes and sequencing applied to a patient’s medical claim are accurate and appropriate. It ensures that the assigned DRG code for a hospital patient’s medical records accurately reflects the diagnoses, procedures, and services provided on the claim submitted for reimbursement.
Proper coding of all diagnoses and procedure codes, as well as accurate and complete recording of all data elements that affect the DRG assignment as documented in the medical record, is critical to ensure a facility (i.e. hospital) is appropriately reimbursed.
Coding validation is performed by credentialed coders and is the process of verifying that codes were billed and sequenced in accordance with national coding guidelines. Clinical validation is performed by clinicians and is an additional process performed in addition to the coding validation review. Clinical validation verifies the diagnoses coded were actually present and managed during the hospital stay based on the clinical documentation in the medical records, and the results of related diagnostic testing were consistent with the diagnoses. In cases in which there is a discrepancy between the diagnosis coded and the associated clinical indicators for the condition, the diagnosis may be removed from the original grouping, which may result in a different assignment of a DRG that more appropriately reflects the medical record documentation.
The purpose of DRG validation review is to:
Validate the principal and secondary diagnoses to ensure all diagnoses were billed appropriately, supported in the medical record and billed according to official coding guidelines;
Validate the clinical documentation and results of diagnostic testing support the billed diagnosis;
Validate all procedure codes to ensure they were coded accurately according to official coding guidelines, and are supported by the documentation in the medical records;
Verify the discharge status code and all other data elements affecting the DRG assignment; and
Verify diagnoses identified as Hospital Acquired Conditions (HACs) were coded with the correct present-on-admission (POA) indicator.
This Coding Policy addresses claims billed with Diagnosis Related Grouper (DRG) codes. Claims are reviewed for both validation of coding and clinical significance and accuracy. Providers will be notified of any adverse findings.
DRG Validation reviews conducted by BCBSMS and/or BCBSMS’ designated representative/third party vendor to confirm appropriate DRG assignment and accuracy of reimbursement involve a review of claim information, including, but not limited to, all diagnoses codes, procedure codes, revenue codes, discharge status codes, and supporting medical records documentation. DRG reviews will be performed using accepted principles of coding practice to determine if claims submitted are correctly coded in accordance with industry coding standards as outlined by the Official Coding Guidelines, the applicable ICD-10 Coding Manual, the Uniform Hospital Discharge Data Set (UHDDS), CMS coding guidance, and/or Coding Clinics. DRG validation reviews will be performed using claims data and the medical record documentation available at the time of audit.
Claims billed with certain DRGs and diagnosis codes at a high risk of incorrect coding, including, but not limited to, DRG coding that impacts billing for chronic conditions, sepsis, C-Sections and vaginal deliveries, will be reviewed to ensure billed services are coded correctly and medical record documentation is clinically supported. Certified coders and clinical reviewers will review claims and submitted medical record documentation for items including, but not limited to:
Verification of the diagnosis code(s) billed
Diagnoses that relate to an earlier episode which have no bearing on the current hospital stay are to be excluded
Verification that secondary diagnoses billed are clinically significant conditions that affected patient care in terms of requiring:
clinical evaluation; or
therapeutic treatment; or
diagnostic procedures; or
extended length of hospital stay; or
increased nursing care and/or monitoring
Verification of the procedure code(s) billed
Review of Present on Admission (POA) assignments
Verification of the sequencing of codes
Clinical validation of the principal and MCC/CC diagnosis codes, when billed
DRG validation reviews may result in revisions to the diagnosis code(s) and/or procedure code(s) based on these guidelines and medical record documentation. These revisions may result in a change in the DRG assignment. The Provider will be notified of DRG validation review findings, including the right to appeal the findings and appeal procedures. The Provider must comply with the appeal process requirements for the appeal to be eligible for review. Upon completion of the appeal process, the appeal decision shall be final.
When a revision to the DRG assignment occurs, the claim will be reprocessed at the payment rate of the revised DRG. The Provider will not be required to submit a corrected claim. Network Providers may not bill the Member for any reimbursement differences that result from the DRG validation review.
This Coding Policy does not apply to Medicare Supplement or out-of-state Blue Card Home claims.
The coding guidelines outlined in Coding Policy should not be used in lieu of the Member's specific Benefit Plan language.
11/01/2024: New Coding Policy added.
Centers for Medicare & Medicaid Services (CMS), ICD-10 Official Guidelines for Coding and Reporting . ICD-10-CM Official Guidelines for Coding and Reporting
Centers for Medicare & Medicaid Services (CMS), Medicare Claims Processing Manual, Chapter 23 - Fee Schedule Administration and Coding Requirements
AHIMA (2023 Update) Practice Brief Clinical Validation, https://ahima.org/media/oolfpens/create-practice-brief-template-final.pdf
All valid Diagnosis Related Grouper (DRG) codes (001-999)