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Choosing a DRG Auditing Vendor

Choosing a DRG Auditing VendorIt's fair to say that "not all DRG vendors are created equal." Despite overlapping marketing efforts, there are two general categories of DRG auditing products: those that primarily serve provider hospitals and those that are designed to identify overpayments on behalf of health plans and payors. Just as an attorney typically specializes in either defense or plaintiff representation, so too do auditing vendors specialize in the unique needs, cultures and priorities of the parties they respectively serve.

Even within the category of payor-based vendors, there is also a wide range of approaches to DRG auditing and overpayment identification. The three major sub types are:
  • Companies that primarily employ data mining and editing approaches: These companies often charge on a pmpm or per claim basis, or a combination of pmpm and a percentage of identified savings.
  • Coding guideline-based auditing services: These programs employ credentialed coding professionals and validate diagnoses in accordance with established coding conventions and the Official Guidelines for Coding and Reporting. A small minority of these programs also obtain a provider-signed agreement to the vendor’s recommended changes.
  • Companies that employ a combination of both data mining and clinical approaches: Typically the coding guideline based portion of the approach is limited by broader selection filters and often includes a greater emphasis on the accuracy of physicians’ clinical documentation of diagnoses, more so than it does the intricacies of coding guideline compliance.

Keeping in mind that the authority of assigning and correcting DRG coding lies within the provider’s Health Information Management coding department, vendors such as DRG Claims Management that implement a coding guideline-based model will have the greatest chance of achieving cooperation and written agreement by the provider hospital. Such collaboration is instrumental in preserving provider - payor relationships as well as in reducing and eliminating burdensome denials and appeals. Therefore, we recommend that our coding compliance driven model with verified savings will yield the best results in all aspects of what payors hope to achieve.
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