In an ideal world, hospital claims would be processed within days of service delivery, every claim would be accurate and compliant and reimbursement would be timely and appropriate for every service provided.
For most hospitals, the reality is quite different—and that reality directly impacts revenue.
Hospitals can lose tens of thousands of dollars in revenue annually due to coding errors and insufficient documentation.
With fewer resources and often thinner margins than large hospitals, rural hospitals are especially vulnerable to any revenue loss—particularly those that are avoidable.
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Preventing such revenue loss starts with effective management of the data and processes that go into creating every patient claim. When health information management (HIM) practices are strong, claim accuracy and compliance improve, hospitals are paid what they deserve and revenue is protected.
What Are the Pain Points to Effective HIM?
Several obstacles can lead to insufficient documentation and inaccurate coding, hampering effective HIM and leading to claims denials.
Common pain points include:
Fragmented systems: For many hospitals, one underlying issue is a lack of interoperability.
Claims data is collected into the electronic health record (EHR) from the disparate systems of clinical departments, such as radiology, laboratory and pharmacy. Ideally, these systems should be interoperable through an interface that enables data to be accessible from one system to another. Often, however, the systems are not.
This fragmentation causes a duplication of work, which often leads to errors in data and lowers productivity, adding to costs and impacting margins.
Data quality/integrity: A clean and compliant claim relies upon good data. One common cause of poor data is the rush to input information into the EHR. Often, clinicians will “copy and paste” pieces of data into patient charts, rather than re-entering the same or similar information.
This practice can lead to errors in the patient’s chart, and it can mean that information from one day to the next in the patient stay isn’t updated appropriately. Not only can that cause medical errors, but it can also cause coding and billing issues.
Regulatory/compliance standards: Keeping up with frequent updates to rules and regulations governing claims documentation is a constant and overwhelming endeavor. Missed updates or misunderstood regulations can lead to noncompliant claims, which can result in financial penalties.
If a payor audits a health record on a paid claim, the goal is to have all required documentation in the record, so the payor doesn't recoup all or part of the payment.
Staffing shortages: Highly qualified coders and clinical documentation 
improvement specialists, who review claims for accuracy, are hard to find. The shortage of highly qualified coders can lead to backlogs in workload and a greater number of errors by inexperienced coders. Finding the time to appropriately train HIM staff can also be challenging for hospitals.
How Is Effective HIM Maintained?
Several key practices will help to ensure that HIM is doing what it’s supposed to do—protect revenue.
These include:
Regular internal audits: Recommendations from the Centers for Medicare & Medicaid Services (CMS) and other agencies, such as the American Health Information Management Association (AHIMA), call for hospitals to conduct annual internal audits of their healthcare records. When conducted effectively, audits will surface errors, thereby flagging any weak areas within documentation or coding, other areas of the revenue cycle or other hospital departments.
An audit helps to ensure that coding staff is up to date on compliance and that staff understand coding guidelines and rules. It’s another proactive way of uncovering those problem areas so that, ultimately, claims are submitted as clean as possible.
Quality staffing: CDI specialists, who are often registered nurses, have specific clinical knowledge to better understand medical terminology, regarding diagnoses, for example. These specialists will catch what falls through the cracks in the HIM department.
CDI specialists make sure the documentation in a patient's record is accurate, reviewing it to assess the possibility that something was left out that may affect severity of illness or risk of mortality. These specialists provide the support for medical necessity by working with providers to obtain that information.
Continuous education: Medical coders should receive regular, formal training to ensure they fully understand coding guidelines and are up to date on new rules from government and private agencies. A good coder will help the HIM and the coding team to become more efficient and more proactive.
Does Your Organization Have Outstanding HIM?
Recognizing the strategic value of HIM will tool Chief Financial Officers (CFOs) with another mechanism for protecting their hospital’s bottom line. Tracking key performance indicators and implementing supportive practices within HIM can fulfill every CFO’s wish list: full, timely payment for services provided, with minimal intervention, and healthcare records that are ready to withstand any audit.
When a hospital doesn't have blatant problems with any of those three areas, it has an outstanding HIM department.
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