Health First Colorado to pilot small DRG audits, says ambiguous cases will favor providers
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Summary
Health First Colorado staff said they will pilot a small DRG audit that uses clinical guidelines as a baseline but also reviews resource use; preliminary findings will remain preliminary under Senate Bill 314, and the department plans to publish the guidelines that vendors will apply.
Dr. Chapman, a member of the provider advisory board, told attendees the department will pilot a limited DRG audit that uses established clinical guidelines as a starting point but explicitly reviews the resources used to treat patients when the documentation is ambiguous. "The tie is gonna go to the runner," Dr. Chapman said, describing an approach that favors providers in cases that do not clearly meet strict guideline thresholds.
The move is intended to balance the department's statutory obligation for fiscal oversight with concerns from providers that published guideline criteria do not capture all clinically appropriate care. Dr. Chapman repeatedly stressed that initiating treatment (for example, sepsis bundles or STEMI alerts) is not the same as confirming a diagnosis for coding: "initiating treatment protocols does not equal confirming diagnosis." He said the pilot will pair guideline checks with a review of clinical resource use — time in ICU, therapies administered and other indicators of intensity — before concluding an overpayment.
David Smith, who presented rule and policy updates for the RAC program, framed the procedural changes already enacted under recent legislation. "An overpayment will be determined at the end of the audit process, and the initial findings will be preliminary in nature," Smith said, summarizing how Senate Bill 314 alters due process: preliminary findings, an exit conference for complex audits, and an informal-reconsideration step that triggers the overpayment obligation and a provider's right to seek administrative review.
Smith also noted CMS approved the department's state-plan amendment effective Aug. 6 and that the Medical Services Board approved emergency rule changes on Nov. 14; the board is scheduled to consider making the emergency rule permanent in January. Staff said they will publish which guidelines HMS (the vendor) will apply so providers know in advance what standards will be used and that physician advisers will review preliminary HMS findings.
The meeting also added pediatric representation to the board: Dr. Justin Beverly, a pediatric hospitalist and medical director of utilization review at Children’s Hospital, was introduced and welcomed to provide pediatric perspectives the group said were previously under-represented.
Next steps: department staff said the DRG pilot would start with a very small number of claims and providers, solicit provider feedback and adjust the process before wider rollout.
