A multidisciplinary audit of clinical coding accuracy in otolaryngology: financial, managerial and clinical governance considerations under payment‐by‐results

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Abstract
Objectives: To audit the accuracy of otolaryngology clinical coding and identify ways of improving it. Design: Prospective multidisciplinary audit, using the ‘national standard clinical coding audit’ methodology supplemented by ‘double‐reading and arbitration’. Settings: Teaching‐hospital otolaryngology and clinical coding departments. Participants: Otolaryngology inpatient and day‐surgery cases. Main outcome measures: Concordance between initial coding performed by a coder (first cycle) and final coding by a clinician‐coder multidisciplinary team (MDT; second cycle) for primary and secondary diagnoses and procedures, and Health Resource Groupings (HRG) assignment. Results: 1250 randomly‐selected cases were studied. Coding errors occurred in 24.1% of cases (301/1250). The clinician‐coder MDT reassigned 48 primary diagnoses and 186 primary procedures and identified a further 209 initially‐missed secondary diagnoses and procedures. In 203 cases, patient’s initial HRG changed. Incorrect coding caused an average revenue loss of £174.90 per patient (14.7%) of which 60% of the total income variance was due to miscoding of a eight highly‐complex head and neck cancer cases. The ‘HRG drift’ created the appearance of disproportionate resource utilisation when treating ‘simple’ cases. At our institution the total cost of maintaining a clinician‐coder MDT was 4.8 times lower than the income regained through the double‐reading process. Conclusions: This large audit of otolaryngology practice identifies a large degree of error in coding on discharge. This leads to significant loss of departmental revenue, and given that the same data is used for benchmarking and for making decisions about resource allocation, it distorts the picture of clinical practice. These can be rectified through implementing a cost‐effective clinician‐coder double‐reading multidisciplinary team as part of a data‐assurance clinical governance framework which we recommend should be established in hospitals.