Clinical Documentation and Reimbursement Enhancement

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Client Profile:

A free standing, academically affiliated, 190-bed pediatric hospital offering a comprehensive array of pediatric inpatient and ambulatory services including Levels 3 and 4 neonatal intensive care units, state-of-the-art ambulatory surgery center, five specialty care centers, and one of the busiest Level 1 Pediatric Trauma Centers and Primary Care Centers in the region.


The client was preparing for a significant shift in its state's Medicaid inpatient reimbursement from per diems to an APR-DRG basis, fundamentally impacting more than 50% of its inpatient revenue.

Historically, this pediatric hospital had been reimbursed on a per diem basis for all payers, including Medicaid, and never experienced risk associated with stays beyond an expected geometric mean length of stay. APR-DRG based reimbursement posed a significant operational challenge and potential financial risk.

i3 performed a rapid assessment of the pediatric hospital's operational preparedness, especially around clinical documentation, HIM and coding, and revenue cycle billing. The assessment quickly identified areas of potential risk or improvement. Additionally, i3 reviewed and validated a financial impact analysis, regrouping the pediatric hospital's historical inpatient discharges under the appropriate APR-DRG grouper version to replicate the state's APR-DRG version, state-specific case weights, program exclusions, and outlier thresholds to identify the expected financial risk and identify clinical areas most at risk for reduced reimbursement.