OIG Adds New Topic Affecting Hospitals

on Tuesday, 05 December 2017. All News Items | Coding

The Office of Inspector General (OIG) Work Plan was originally published once a year around October or November. Healthcare compliance officers across the nation pay special attention to this document as it highlights issues considered at high risk of overpayments and/or fraud for federal healthcare payers. In 2015, the OIG began publishing a second “mid-year update” in April or May. When it came time for this year’s mid-year update, the OIG made major changes to the way they present the Work Plan. Instead of once or twice a year, beginning in June 2017, the Work Plan is updated monthly with new additions posted on the Recently Added Items webpage.  Completed items are removed from the Work Plan and there are webpages for recently published reports and a complete listing of Active review topics. The OIG made this change to how the Work Plan is presented to “ensure that it more closely aligns with the work planning process” which “is dynamic and adjustments are made throughout the year to meet priorities and to anticipate and respond to emerging issues with the resources available.”

The OIG added four new Work Plan topics for November 2017. Three of the four apply to Medicaid: Opioid Use, Telemedicine, and Medicaid Managed Care Organizations. The other topic focuses on hospital Medicare services, specifically hospital inpatient billing for severe malnutrition.

Elderly patients are often at risk of being malnourished. Hospitals are allowed to bill for the treatment of malnutrition on the basis of the severity of the condition -- mild, moderate or severe, and whether it affects patient care. Severe malnutrition can significantly affect the resources and time required in treating a hospital inpatient. Medicare recognizes this by classifying it as a major complication or comorbidity (MCC) and makes a higher payment when a diagnosis of severe malnutrition appears on an inpatient claim. Because of this higher payment, the OIG will review hospital inpatient claims “to determine whether providers are complying with Medicare billing requirements when assigning diagnosis codes for the treatment of severe types of malnutrition on inpatient hospital claims.”

Even before making this a new addition to their Work Plan, the OIG has already published reports from two audits of Severe Malnutrition. In these audits they reviewed for I-10 diagnosis codes E41 (Nutritional Marasmus and Severe Malnutrition with Marasmus) and E43 (Unspecified Severe Protein-Calorie Malnutrition). The sample size was small but 89% and 98% of 100 claims reviewed for each audit respectively did not comply with Medicare billing requirements. And adding insult to injury, of the combined approximately $865,000 actual overpayments, the OIG extrapolated to estimated overpayments for both hospitals combined to over $2.6M.  For more information on the OIG prior severe malnutrition audits, see our previous article on the MMP website.

The OIG has another Work Plan issue related to malnutrition that focuses specifically on claims billed with a diagnosis of Kwashiorkor, a form of severe protein malnutrition that is typically not found in the United States. So far, findings from OIG audits for Kwashiorkor have shown that almost all (if not all) claims with this diagnosis are incorrectly coded and billed. Sometimes the code for Kwashiorkor results in an overpayment and sometimes it does not affect the final Medicare MS-DRG payment since other MCCs are appropriately coded on the claim. The ICD-10 diagnosis codes for Kwashiorkor are E40 and E42.

The topic of correct billing for severe malnutrition is also a pending Targeted Probe and Educate (TPE) issue for the Novitas Medicare Administrative Contractor (MAC) for Jurisdiction H and Jurisdiction L. The topic is listed specifically as “E41 and E43 – Severe Malnutrition.” With two Medicare review entities already looking at this topic, it would not be surprising if other reviewers, such as other MACs, the Recovery Auditors (RACs) or the Supplemental Medical Review Contractor (SMRC) also selected this review issue.

Hospitals should watch our newsletter for updates from all the review contractors to see if anyone else begins reviews of malnutrition. In the meantime, I recommend hospitals perform self-reviews with internal or contracted resources to ensure proper coding of severe malnutrition on their inpatient claims before a Medicare reviewer comes knocking.

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc.  Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system.  In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers.  You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.

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