Changing with the Times: Outpatient CDI

As technology and payment systems evolve, more and more care is being provided in the outpatient setting.  Reimbursement models for outpatient services are transitioning from fee-for-service to performance or value based models.  As healthcare moves toward these risk-adjusted models, accurate and complete diagnosis reporting is of paramount importance.
The key to success with risk or value-based reimbursement is complete and accurate documentation of all currently managed diagnoses, to the highest level of specificity.  The combination of the ICD-10 diagnosis codes which define Hierarchical Condition Categories (“HCC’s”), and thus severity of illness and clinical complexity, along with demographic factors account for varying costs from patient to patient.
Outpatient Clinical Documentation Improvement (“CDI”) initiatives will ensure your documentation accurately reflects the complexity and severity of illness and the cost to maintain the health of the patients you serve, which in turn supports accurate reimbursement in these evolving risk-adjusted payment models.

Outpatient CDI Program Goals 

While there are a variety of outpatient settings including emergency departments, infusion centers, diagnostic services and outpatient specialty clinics, each has similar CDI goals:

  • To ensure clinical documentation supports medical necessity and level of service rendered;
  • To reflect the complexity and severity of illness of the patient population, thus improving the accuracy of diagnosis code reporting and risk adjustment, while mitigating the risks associated with inaccurate coding.

Effective outpatient CDI initiatives facilitate the accurate representation of a patient’s clinical status that translates into coded data.  Coded data is then translated into quality reporting, physician report cards, reimbursement, public health data and disease tracking and trending.

Outpatient CDI Elements 

Inpatient and outpatient CDI programs focus on clinical impact through ICD-10 diagnosis codes, in addition to the business impact.  That said, the tools/reporting necessary to monitor the settings vary.  Successful outpatient CDI programs analyze documentation to support medical decision making, justify services rendered, support proper reimbursement and promote continuity of care through evaluating the following CDI elements:

HCPCS/CPT Procedural Codes

  • Review procedural documentation to ensure it fully supports the CPT/HCPCS code and units reported mitigating compliance risks.
  • Evaluate if documentation improvement would allow for capture of additional CPT /HCPCS codes which translate into revenue opportunities. 
  • Ensure documentation supports all utilization and documentation guidelines as outlined in regulatory guidance such as National Coverage Determinations (“NCD”) or Local Coverage Determinations (“LCD”). 

ICD-10-CM Diagnosis Codes

  • Evaluate documentation for required medical necessity components such as required diagnosis codes as per NCD and LCD requirements.
  • Ensure the documentation of all diagnoses that impact the patient’s evaluation, care and treatment including the chief complaint, comorbidities, chronic conditions and treatment rendered
  • Ensure diagnosis documentation best practices include the use of the “MEAT” principal where all diagnoses that are Monitored, Evaluated, Assessed or Treated are reported on the claim.

Outpatient CDI Barriers

As with any new initiative, there will be barriers which can be overcome with a focused outpatient CDI program.

Volume of Outpatient Encounters

Whether it is hospital outpatient encounters, clinic visits, or physician office visits; there are far more encounters than in the inpatient setting.  Not all encounters can be reviewed and certainly not in real-time as in the inpatient setting.


Unlike inpatient CDI where there can be several days to review documentation and query providers, outpatient CDI faces strict time constraints.  Querying the provider at the time of the actual encounter is highly unlikely, requiring documentation amendments to the original encounter note.


Often there is limited outpatient staff to assist with documentation efforts.  Many outpatient areas have no formal CDI team with the exception of the Emergency Department and thus, must rely on staff already charged with other duties to accomplish CDI efforts.  Additionally, physicians often level their own evaluation and management services without the review of other staff. 

Outpatient CDI Benefits

  • Decreased claim denials/rejections and audit risk 
  • Increased documentation specificity
  • Decreased Additional Documentation Requests (“ADRs”)
  • Increased quality of care

Outpatient CDI Focus and Implementation

Outpatient CDI focus will differ depending on the area of outpatient practice.  Because the outpatient arena is so large, it would not be practical or possible to tackle every CDI issue.  The beginning of any CDI initiative should have a targeted focus which can be achieved by identifying your most significant areas of concern:

  • Claim denials
  • External audits
  • Quality measures
  • Regulatory guidance changes
  • Revenue underperformance and/or variability in revenue trends
  • Risk adjustment

Impact Measurement

The final step to an effective outpatient CDI program is the evaluation or measurement of improvements based on implemented CDI efforts.  Using key performance indicators to measure the success of your CDI initiatives will help to drive improvements and create new initiatives within your CDI program:

  • Compare historic denials prior to program implementation to current volumes and identify trends. 
  • Compare current dollar amount or volume of rework to amounts prior to CDI initiatives.
  • Measure the current percentage of cases with documentation deficiencies to that of cases prior to CDI initiatives.

In summary, as outpatient services increase and payer reimbursement shifts from fee-for-service to value based models, an effective outpatient CDI program is critical. Developing a focused outpatient CDI program that fits your individualized needs should start with the following steps: 

  1. Define your targeted areas of need for outpatient CDI initiatives.  
  2. Prioritize your weaknesses and vulnerabilities and start with the areas of greatest concern.
  3. Create policies and procedures, including education, to improve identified areas of concern while increasing revenue opportunities and mitigating compliance risks. 
  4. Measure your improvements to evaluate the CDI impact. 
  5. Capitalize on your successes and proactive savings to implement new initiatives.

SunStone offers comprehensive solutions specifically geared to assisting facilities and providers assess their CDI needs in this ever-changing regulatory environment. If you have any questions, please contact Vonda Moon, Principal at or Joli Fitzgibbons, Senior Manager at