By Don May, Senior Vice President of Policy, Federation of American Hospitals
It is unfortunate a recent study by RAND published in Health Affairs contending that hospitals are inappropriately profiting from increased “upcoding” of patients is getting some attention in the press. In analyzing the study, the authors miss the forest for the trees and completely fail to contemplate how care is delivered and changed during the study period.
Have there been coding changes in hospitals over recent years? Of course.
Why? One key reason is that the patient population admitted to hospitals has gotten significantly more complex. That’s not “upcoding” – a pejorative term the authors apply to all increases in coding – that’s “correct coding.”
The study and subsequent press coverage fail to account for – or even mention – the major shift in patient care to the outpatient hospital and ambulatory setting. With increased technology and pharmaceutical drug treatments, healthier patients are more likely to be treated in outpatient settings with no hospital admission, while the sickest patients and those with more complex needs are still needing to receive inpatient care and treatment in hospitals. The patient case mix index, then, would increase and naturally reflect this change in the composition of hospital patients over time. Perhaps if the authors had access to clinical data or electronic records, they would have discovered this trend and more accurately characterized what the changes in coding actually represent, rather than resort to what may have been confirmation of a bias previously held.
As seen below, hospital survey data shows a significant shift in care from the inpatient to outpatient hospital setting with percentages of total revenues increasing by at least 6 percentage points during the authors’ study period.
The study’s siloed analytic approach leads readers to believe that coding changes are nefarious and a policy problem – but understanding the dynamic shift from inpatient to outpatient services would tell a more complete story. The way health care is delivered is rapidly changing, and patients benefit greatly from increased innovations. When patients are in need, hospitals are there – ready to provide critical, lifesaving treatments.
