Palmetto GBA’s June 19, 2018 Hot Topic Teleconference Q&A’s Released

on Tuesday, 10 July 2018. All News Items | Medicare Coverage | CERT

MS-DRGs 291 & 292 Heart Failure & Shock Medical Review Expands to Jurisdiction J

Palmetto GBA hosted a Hot Topic Teleconference on June 19, 2018 focused on the Targeted Probe & Educate (TPE) Process. Questions and Answers addressed by Palmetto’s Medical Review Team were posted on the Jurisdiction M TPE webpage June 27th. This session started with Palmetto reminding listeners to submit the name and phone number of the contact person when responding to Additional Documentation Requests (ADRs) as “the interaction between the reviewer and the provide is a key component of the TPE model.”

Questions ranged from how to change the phone number of the provider contact person to when post-review TPE contact takes place. This article focuses on the following Q&A specific to the Heart Failure & Shock Active Medical Review in Jurisdiction M.

“Question:  For DRGs 291, and 292, we look for the Local Coverage Determinations (LCDs) and National Coverage Determinations (NCDs) that correspond. However, we haven’t been able to find these, can you point me to the resources that would give me an idea of what it is that you’re looking for?”

Answer:  “The DRG 291 review is a coding review. We requested that specific information that would be part of that review on the ADR. The documentation that you submit to us should support that the DRG as billed/coded and the documentation reflects the appropriate diagnoses or the level of care. We’re validating the medical records and documentation more at the level of DRG being coded. You may go to our website under Medical Review for information about each review in General and TPE Process.”


Heart Failure Focus by other Medicare Auditors

In general, current Medicare Contractor audits are focused on meeting covered indications in National and Local Coverage Determinations (NCDs & LCDs) for services being provided. The absence of an NCD or LCD for Heart Failure brought to mind several questions. Who else has or is reviewing Heart Failure claims, what can I learn from other audits, and why heart failure?


Comprehensive Error Rate Testing (CERT) Program Reviews Heart Failure & Shock

First, there is the CERT’s 2017 Medicare Fee-for-Service Supplemental Improper Payment Data that was released January 1, 2018. The data reflects the CERT finding of a 6.6% improper payment rate for claims coded to the Heart Failure and Shock MS-DRGs 291, 292 and 293. The improper payment rate represents a Projected Improper Payment Amount of $248,460,547.

The data is further broken down to the Improper Payments by Type of Error. Specific for Heart Failure the CERT attributed improper payments to the following two Error Types:  

  • 78.4% Medical Necessity with Projected Improper Payments $194,789,523
  • 21.6% Incorrect Coding with Projected Improper Payments $53,671,024

Medicare Quarterly Compliance Newsletter

Looking back a little further in time, the July 2014 edition of the Medicare Quarterly Compliance Newsletter, included a Recovery Audit Contractor review of Heart Failure and Shock records. Findings in the newsletter answer what the problem was, the data analysis findings, how the Recovery Auditor approached the audit and common errors identified. 

Problem: The Recovery Audit Contractor noted Heart Failure is one of CMS’ top volume MS-DRG Groups.  

Data Analysis: Analysis indicated a “potential aberrant billing practice may exist” for the Heart Failure MS-DRG Group and prompted the medical review.

Audit Approach: The Recovery Auditor reviewed records to determine if the principal and secondary diagnoses were assigned inappropriately resulting in overpayments to hospitals.

Common Errors Identified:

  • Sequencing of the Principal Diagnosis, and
  • Improper Coding of Secondary Diagnoses

Palmetto GBA (JM) April 21, 2015: The DRG Family for Heart Failure and Shock and the DRG Family for Renal Failure

A search on Palmetto’s website revealed in April of 2015 they posted a video to their YouTube channel about the DRG Family Heart Failure and Shock and DRG Family Renal Failure. The education session “is intended to instruct Hospital providers on the appropriate billing and documentation requirements under Medicare. CMS has identified the top DRG families by Medicare reimbursement as areas for improvement.” This YouTube video is about six and half minutes long and can be found at

Why Focus on Heart Failure?

According to the Heart Failure Society of America:

  • Current estimates are that nearly 6.5 million Americans over age 20 have heart failure.
  • One major study estimated there are 960,000 new heart failure cases annually.
  • Heart failure directly accounts for about 8.5% of all heart disease deaths in the United States.
  • Heart failure remains the number one cause of hospitalizations in our Medicare population.

DRGs 291 and 292 Paid Claims Data Analysis

Utilizing Medicare fee-for-service paid claims data from our sister company RealTime Medicare Data’s (RTMD) RealHealth Analytics database, the following three tables trend volume, total charges and actual payments made to hospitals in Jurisdiction J (Alabama, Georgia and Tennessee) for DRGs 291 and 292 combined over three CMS fiscal years.

CMS Fiscal YearVolumeTotal ChargesActual Payment
2015 9,166 $290,053,584 $58,541,797
2016 8,961 $299,432,453 $57,397,258
2017 9,006 $321,865,664 $62,391,267
Data Source: RTMD report Statewide Case Mix Index (CMI) by Provider
CMS Fiscal YearVolumeTotal ChargesActual Payment
2015 13,813 $414,735,721 $101,457,423
2016 13,128 $416,045,251 $95,663,402
2017 14,924 $484,336,417 $116,251,626
Data Source: RTMD report Statewide Case Mix Index (CMI) by Provider
CMS Fiscal YearVolumeTotal ChargesActual Payment
2015 11,670 $340,891,453 $79,653,533
2016 10,965 $337,285,940 $74,908,894
2017 12,178 $379,202,075 $88,397,962
Data Source: RTMD report Statewide Case Mix Index (CMI) by Provider

Collectively, in FY 2015, 2016 and 2017 there were almost 104,000 Heart Failure claims. Actual payment made by CMS to hospitals was $734,663,162 for FY 2015, 2016 and 2017. Palmetto must believe the claims data is compelling enough as they updated the JJ Active Medical Reviews list to include Heart Failure and Shock.  

Article by Beth Cobb

Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Services at Medical Management Plus, Inc.  Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system. 

In her current position, Beth is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Risk Assessment (CRA) Tool. You may contact Beth 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.

green-iconWe are an environmentally conscious company, dedicated to living “green” both at work and as individuals.


1900 Twentieth Avenue South
Suite 220
Birmingham, AL 35209


This email address is being protected from spambots. You need JavaScript enabled to view it.