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Crucial Role of DRG Validation: A Physician Advisor’s Perspective

Hassan Rao, MD, CCS, CPC, Executive Physician Advisor at Brundage Group

By Hassan Rao, MD, CCS, CPC

As a Physician Advisor, I’ve seen firsthand how critical a robust Diagnosis-Related Group (DRG) validation process is to hospitals’ financial and operational health. In an environment where accurate documentation and coding directly impacts revenue, compliance, and the quality of patient care, establishing a well-defined process for DRG validation is not just an option—it’s essential.

Why DRG Validation Matters to Physicians

From my experience, DRG validation is about more than just billing. Ultimately, it’s about ensuring the patient’s clinical story is adequately reflected in the documentation and codes. This alignment is critical for several reasons: 

 

  • Accurate Reimbursement: As physicians, we know that the complexity of our patient’s conditions is only sometimes fully captured in the initial coding. Additionally, hospitals can lose substantial revenue when documentation doesn’t reflect the actual severity of illness. 
  • Reducing Denials: Denied claims place a significant administrative burden on hospitals and clinicians. Validating DRGs ensures that the documented and coded are clinically valid and aligned with coding guidelines, reducing the risk of costly denials. 
  • Compliance and Audit Readiness: Physicians are held to high standards of care and documentation. A robust DRG validation process helps ensure compliance with coding guidelines, reducing the likelihood of audits and penalties related to high-risk DRGs. 
  • Quality Measure Performance: Many hospital quality measures such as those within the Center for Medicare and Medicaid Services (CMS) value-based purchasing measures are based entirely on the coded record rather than clinical outcomes. However, this discordance can result in low quality measure performance if the coded record is not an accurate and complete picture of the patient’s conditions and course.  

The Power of Collaboration

The most successful DRG validation efforts involve collaboration between multiple teams. CDI specialists, coding professionals, and physician advisors each play a vital role: 

 

  • CDI Specialists: With their clinical expertise, CDI teams help ensure documentation accuracy and clinical validity. They often identify documentation gaps that can be corrected before coding occurs.  
  • Physician Advisors: Provide additional clinical insight, and a unique perspective needed to ensure that the DRGs accurately reflect the patient’s clinical condition. Our involvement often helps resolve clinical documentation discrepancies, improve queries, and provide necessary education to achieve more accurate coding and improved compliance. 
CDIs and coders review cases concurrently, but an additional second-level review may be valuable for certain DRGs. Analogous to clinical workflows, redundancy through collaborative efforts—such as two nurses verifying a high-risk medication dose—helps reduce clinical errors. Although multiple checks within CDI and coding are not always feasible, applying this concept can reduce revenue leakage and improve compliance by ensuring that the coding and documentation in certain cases are accurately reflected in the claim codes

Our Results at Brundage Group

At Brundage Group, I’ve been proud to be a part of a team of CDI, coding professionals and physician advisors that have delivered exceptional results through our DRG Validation Reviews: 

 

 

Over 700% ROI
Our clients consistently see a significant return on investment.
Average Medical DRG Impact of $2K
This is the average financial uplift we identify per medical case. 
Average Surgical DRG Impact of $4.5K
For surgical DRGs, the impact is even more significant. 
Improved Compliance
We’ve helped countless hospitals identify high audit-risk DRGs, ensuring they are better prepared for regulatory scrutiny.
Denial Reduction
Through our collaborative efforts, hospitals have seen a significant reduction in denial rates, which ultimately frees up resources and improves cash flow.
Education and Sustainable Solutions
Education is at the core of our philosophy at Brundage Group. We include education on each case deliverable to help improve coding, CDI or provider documentation for a sustainable, long-term solution. 

Taking Action as a Physician Advisor

For physician advisors like me, being actively involved in DRG validation has allowed me to bridge the gap between clinical care and the administrative side of healthcare. Moreover, it’s not just about ensuring the hospital gets paid; it’s about ensuring that the patient’s story is accurately documented and that we, as clinicians, are correctly credited for the complexity of the care we deliver. 

If you’re a physician advisor or hospital leader, I strongly urge you to participate actively in DRG validation. The impact goes beyond finances—it ensures compliance, reduces denials, and improves the overall quality of care. 

Ready to Strengthen Your DRG Validation Process?

Don’t wait for audits or denials to highlight the gaps in your documentation and coding. Take proactive steps to ensure compliance and maximize your revenue. Connect with Brundage Group today and let our Physician Advisors and experts help your hospital build a more substantial, more efficient DRG validation process. 
Contact Brundage Group Today

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