The COVID-19 pandemic placed significant financial pressure on hospitals. Hospitals faced higher costs for treating patients with severe illness and longer stays. At the same time, many postponed profitable elective procedures, including joint replacements and same-day surgeries.
A study published in the Annals of Surgery estimated that stopping major elective surgeries during the pandemic cost U.S. hospitals $22.3 billion. An American Hospital Association (AHA) report from June 2020 also projected substantial financial losses for hospitals and health systems.
Hospitals also faced increasing pressure from claim denials. A Change Healthcare report found that the average denial rate increased by 23% between 2016 and 2020.
Key findings from the report included:
- The average denial rate reached 11.1% of claims by the third quarter of 2020.
- Denials increased by 11% nationally after the start of the COVID-19 pandemic.
- About 86% of denials were potentially avoidable.
- Nearly 24% of denials were not recoverable.
- Preventable denials therefore represented a significant source of revenue loss.
Denials Prevention: A Better Approach
Many hospitals manage payer denials through a traditional denial management process. Teams review and appeal claims after receiving denials.
This approach is often reactive and transactional. It can also become segmented, expensive, and inefficient.
A more proactive strategy focuses on denials prevention. Hospitals can identify documentation problems before they lead to costly denials.
This approach should target areas such as:
- Medical necessity denials
- Clinical validation denials
- DRG downgrades
- Level-of-care downgrades
- Documentation-related claim issues
Many of these denials relate to incomplete or insufficient physician documentation.
The problem can begin in the emergency department. It can continue through the history and physical examination and the patient’s admission.
Complete physician documentation helps establish medical necessity. It also provides a clearer picture of the patient’s clinical condition.
Poor documentation can make it difficult to demonstrate:
- The patient’s severity of illness
- Relevant signs and symptoms
- Clinical risks
- The expected course of the condition
- The need for inpatient care
The Role of Clinical Documentation Integrity
This raises an important question:
Can clinical documentation integrity (CDI) programs do more to prevent avoidable denials?
Traditional CDI programs often focus on identifying diagnoses that support accurate reimbursement and improve the case mix index (CMI).
Many programs also measure performance through task-based KPIs. These may include the number of reviews completed or queries submitted.
However, these measurements do not always show whether documentation quality has improved or whether denials have decreased.
A broader CDI strategy should consider documentation quality and denial prevention alongside reimbursement.
Moving From CDI Queries to Documentation Improvement
A query can help clarify documentation. However, queries alone cannot create sustainable documentation improvement.
CDI professionals can work directly with physicians to identify recurring documentation gaps. They can then help physicians understand how complete clinical documentation supports accurate coding and appropriate reimbursement.
This approach requires CDI professionals to work as partners with physicians rather than relying only on retrospective queries.
True documentation integrity involves:
- Complete clinical information
- Accurate documentation
- Consistent documentation
- Clear communication of the patient’s condition
- Documentation that supports medical necessity
- Sustainable improvements in physician documentation
These elements can help hospitals address documentation problems before they become claim denials.
Redefining CDI Performance Metrics
Hospitals can also reconsider how they measure CDI performance.
Traditional metrics may focus heavily on task completion. For example, organizations may track the number of queries submitted or reviewed.
These metrics can provide useful operational information. However, they do not provide a complete picture of CDI effectiveness.
Organizations can also monitor outcomes such as:
- Clinical validation denial rates
- Medical necessity denials
- DRG downgrades
- Level-of-care downgrades
- Query agreement rates
- Documentation improvement trends
- Physician engagement
- Revenue leakage related to documentation
A broader measurement framework can help CDI teams focus on sustainable documentation improvement.
Denials Avoidance Requires Continuous Learning
Effective denials prevention requires ongoing education.
CDI professionals need more than basic knowledge of query processes. They also need strong knowledge of clinical documentation, coding, reimbursement, medical necessity, and payer requirements.
Continuous learning can help CDI professionals identify documentation risks earlier.
It can also help them communicate more effectively with physicians and other clinical stakeholders.
Organizations should encourage CDI teams to build these skills through:
- Ongoing education
- Clinical training
- Coding updates
- Payer policy education
- Documentation audits
- Physician education
- Denial trend analysis
CDI Technology Should Support the Process
CDI software can support documentation review and identify potential gaps.
However, technology should function as a tool rather than replace professional judgment.
CDI professionals still need to understand the clinical record and recognize documentation patterns that may contribute to denials.
Technology can help teams:
- Identify potential documentation gaps
- Prioritize records for review
- Analyze documentation trends
- Monitor queries
- Track denial patterns
- Support physician education
The strongest results come from combining technology with knowledgeable CDI professionals and physician collaboration.
A Proactive Call to Action for CDI Professionals
Healthcare organizations face continued financial pressure. Preventable denials can increase that pressure by reducing reimbursement and consuming staff resources.
CDI professionals can play an important role in addressing this problem.
The focus should extend beyond securing additional diagnoses and increasing CMI. CDI teams can also work toward improving the overall quality, accuracy, and completeness of physician documentation.
A proactive approach can help organizations identify documentation problems before they become denials.
It can also support stronger communication between CDI teams and physicians.
The goal should be clear: improve clinical documentation, reduce avoidable denials, and support accurate reimbursement.
When CDI professionals combine clinical knowledge, documentation expertise, technology, and physician collaboration, they can contribute to a more sustainable revenue cycle.
