What is Clinical Validation? Why is it Important?

Clinical validation involves confirming diagnoses by using evidence from a patient’s medical record. Clinical validation is typically performed by those with a clinical background or those who are familiar with disease processes.  Clinical validation can be part of the routine Clinical Documentation Integrity (CDI) workflow or a separate second level review process.  Clinical validation denials can lead to DRG payment reductions. They are difficult to refute if the payor is not transparent with the clinical criteria used to deny the condition since many diagnoses do not have universally accepted criteria among medical professionals.

Overview of Clinical Validation

Clinical Validation is a clinical review of information within the health record, unusually by a physician or nurse, to ensure reported diagnoses that impact billing can be objectively verified. In this case, objectively verified only means there is clinical evidence in the record to support the diagnosis (e.g., patient presentation, symptoms, diagnostic findings, etc.); however, the quality of the clinical evidence and quantity of clinical evidence a reviewer requires to substantiate a diagnosis is very subjective.

Clinical validation denials are a relatively new type of denial introduced in 2011 in the Centers for Medicare and Medicaid Scope of Work (SOW) for Recovery Auditors that has subsequently been adopted by commercial payors.  Within the SOW clinical validation was described as a review process separate from the DRG validation process and beyond the scope of DRG validation and the skills of a certified coder. Interestingly, these types of reviews are no longer within the SOW for Recovery Auditors. The SOW for Region 1 Recovery Auditors dated March 26, 2021, states “clinical validation is prohibited in all RAC reviews.1”

Differentiating clinical validations from DRG validations, as well as the role of coding professionals, has been addressed through ICD-10-CM Official Coding Guidelines for Coding and Reporting. Professional medical coders are allowed to report a documented condition on the claims form if it meets Uniform Hospital Discharge Data Requirements for the reporting of a secondary (other) diagnosis.  Regarding clinical validation, ICD-10-CM Official Coding Guidelines for Coding and Reporting states that the provider’s statement that the patient has a particular condition is sufficient. Code assignment is not based on clinical criteria used by the provider to establish the diagnosis.” Consequently, clinical validation reviews are a process outside of coding practices and are usually performed by those with a clinical background.

A common strategy used by hospitals in hopes of limiting clinical validation denials is developing organizational definitions for conditions that are frequently challenged by payors like sepsis, malnutrition, acute respiratory failure, and acute kidney injury. This strategy may promote consistency when making a diagnosis within an organization, but these definitions cannot be imposed on payors unless through contractual obligation.

Benefits of a Clinical Validation Process for Hospitals

Accurately diagnosing medical conditions can improve communication within the treating medical team and across different healthcare settings.  Additionally, it can improve performance on healthcare quality measures by ensuring evidence-based care is delivered accordingly.  For example, understanding how sepsis is defined in the CMS Severe Sepsis Bundle, the role of coding in identifying the measure population, and what treatment is required under the quality measure can improve patient outcomes as well as the organization’s quality scores.

Clinical validation denials can be a source of revenue leakage for healthcare systems when upheld by the payor.  The impact of a clinical validation denial is similar to that of a DRG denial as either the principal diagnosis or a secondary classified by Medicare as a Complication/Comorbidity (CC) or Major Complication/Comorbidity (MCC) is removed from the claim resulting in a lower payment than billed by the hospital. A robust clinical validation process can proactively query providers when a diagnosis appears to be based on limited or contradictory clinical evidence to see if the diagnosis was ruled out and should not be reported on the claim.

Processes Involved in Clinical Validation

Clinical validation entails a thorough assessment of patient records to confirm documented conditions. When executing this process, the clinical professional verifies whether there is sufficient clinical data to support a documented diagnosis.  A good rule of thumb is to determine if other providers would come to the same conclusion based on the same clinical information.  When a patient presents with atypical symptoms or does not meet expected abnormal thresholds, the provider should document why the diagnosis applies to this particular patient.

CDI professionals will often query a provider, a formal way to ask for clarification within the health record when a provider documents a diagnosis that they cannot validate either through the use of organizational definitions or standard accepted clinical criteria. The purpose of the query is to allow the provider to document if the diagnosis was ruled out and, therefore, should not be reported on the patient’s medical claim or if the provider can elaborate on their decision-making process. Hence, it is clear to other clinicians how the provider arrived at the documented diagnosis.

Although coding expertise is not required to perform clinical validation reviews, it can be more efficient if audits are performed by CDI professionals with both clinical and coding expertise. It is also beneficial to have an escalation process when disputes occur over the adequacy of clinical information to support a documented diagnosis. The arbiter of these types of situations is often a physician advisor.

1 SOW For RAC Region! (cms.gov) accessed on January 24, 2024

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