Imagine that you are the Revenue Cycle Manager and Independence Hospital. You are asked to provide an analysis of the current reimbursement processes and their effect on financial management decisions.
This next part of your project is to assess factors of severity of illness. Severity of illness is the degree of sickness or illness of the patient, based on clinical data and medical record documentation. Furthermore, the severity of illness can only be as detailed as the quality of clinical documentation. The severity of illness is determined by the coding of all significant conditions; thus the importance of coding accuracy. Coding for severity of illnesses allow healthcare organizations to receive more reimbursement, based on the quality of clinical documentation.
You have been asked to review present on admission (POA) indicators and calculate case mix for Independence hospital. After your review, you will examine potential reimbursement issues and make recommendations.
Based on your review of the POA and case mix information below, write a 2-3page recommendations report to:
• Examine the relationship between medical documentation, severity of illness, hospital acquired conditions, present on admission indicators, and case mix.
o Provide specific examples to support your examination, based on POA and case mix information for Independence hospital.
• Recommendations that may impact revenue and reimbursement, based on your assessment of the information.
• Recommendations to educate physicians on documentation standards.
• Recommendations to educate coders on how to work with physicians with the documentation process.

Present on Admission
Under the Hospital Acquired Conditions provision, the Secretary of Health and Human Services has designated several conditions that, when acquired during a hospital admission, have the potential to reduce payment. One of the conditions is Pressure Ulcers (ICD-10-CML89.X) codes. To identify if the pressure ulcer was present when the patient was admitted or was acquired during the hospital stay, the hospital must report a present on admission code for each diagnosis on the billing form.
You are working with the coding manager at Independence Hospital. The coders have been asked to apply the present on admission indicator code. The coding manager has collected data over the past six months and it is clear from the data, that there is an issue with either the documentation of pressure ulcers, assignment of the POA indicator, or the quality of care.

POA Report for Pressure Ulcers (L89.X) October – March
POA Code Description Volume
Y Yes, present on admission 15
N No, not present on admission 30
U Unknown, insufficient documentation 45
W Clinically undetermined 3
1 Exempt from POA reporting 0

Case Mix
The Case mix index (CMI) is the average weights of a healthcare facility’s diagnosis-related groups (MS-DRG). The higher a facility’s CMI, the greater the number of high cost services the facility performs. The more high cost services performed, the more revenue.
Steps to Calculate CMI:
1. Multiply the relative weight of each MS-DRG by the number of discharges for each MS-DRG.
2. Sum of all weights is the case mix
3. Divide the case mix by the total number of patients.

MS-DRG MS-DRG WEIGHT # OF DISCHARGES
Renal failure w MCC 682 2.0 10
Renal failure w CC 683 1.5 10
Renal failure w/o CC/MCC 684 1.0 10

Point Allocation
Examine the relationship between medical documentation, severity of illness, hospital acquired conditions, present on admission indicators, and case mix.
20 points
Provide specific examples to support your examination, based on POA and case mix information for Independence hospital.
15 points
Recommendations that may impact revenue and reimbursement, based on your assessment of the information.
20 points
Recommendations to educate physicians on documentation standards.
20 points
Recommendations to educate coders on how to work with physicians with the documentation process.
20 points
2-3 page report is properly formatted and free of grammatical errors. 5 points
Total 100 points

CAHIIM Competency
V.B.1. Analyze current regulations and established guidelines in clinical classification systems. (4)