Q&A: Payer denials passed on queries

Q: A patient was initially suspected of having a diagnosis in the history and physical (H&P) that drove the DRG. After review, and without any evidence based supporting clinical indicators noted, the CDI specialist issued a compliant query to clarify whether the diagnosis was ruled out. The attending provider documented “ruled out” in an addendum to the discharge summary.

The payer insisted the diagnosis was valid and claimed the query was noncompliant because it was attempting to invalidate a provider’s diagnosis that was documented throughout the record, which led to the diagnosis being coded as present. This is an unusual reversal of typical payer behavior since they kept the diagnosis as present without seemingly any documented clinical support.

Do payers have a right to deny a diagnosis based upon a CDI query?

A: Most payers use CDI and coding auditors to determine coding accuracy. They may question anything they feel is inconsistent. Regarding a payer’s legal authority over the billing organization’s CDI query process, there is none. When it comes to coding and billing, all parties must follow ICD‑10‑CM/PCS standards and the Official Guidelines for Coding and Reporting, which legally supersede payer preferences.

Because payers cannot diagnose patients, they cannot assign or remove diagnoses unless supported by the provider’s documentation. If a diagnosis meets coding guidelines, it must be reported regardless of payer opinion about query compliance. Therefore, a payer’s claim that a query is “noncompliant” has no legal impact.

It’s understandable that payers can and will audit when documentation is inconsistent, especially as federal scrutiny increases (i.e., concerns about unsupported diagnoses in Medicare Advantage). It’s important to remember that based upon the Uniform Hospital Discharge Data Set (UHDDS) guidelines it is the “condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital” (emphasis added) that drives the encounter.

Therefore, the principal diagnosis is based upon the entire inpatient stay rather than purely what is stated in the H&P or discharge summary as the admitting diagnosis. This underscores the need for strong organizational CDI processes, compliant queries, and perhaps more so speaks to the need for consistent provider documentation throughout the health record.

Lastly, although payers cannot dictate query practices, any party can file a whistleblower complaint if something appears improper. Therefore, maintaining transparent, standardized, guideline‑based documentation integrity policies protect organizations from accusations of documentation manipulation and ensures they can withstand payer or government scrutiny when it happens.

The best way to combat these concerns is to make sure your CDI practices can stand up to scrutiny from anyone, including the payers when audited—CDI and coding departments must have a seat at the proverbial table.

Editor’s note: Jessica Vaughn, DNP, RN, NEA-BC, CCDS, CCDS-O, CRC, a CDI education specialist at ACDIS/HCPro, answered this question. Contact her at Jessica.vaughn@hcpro.com.