Knowledge Base Article

National Medicare (CMS) and their local Administrative Contractors (MACs) are responsible for a variety of different tasks – processing and paying claims, educating providers, ensuring payments are appropriate, and verifying that providers are following the Medicare regulations. It’s a big job but, lucky for them, they have help, especially in the area of oversight. There are the Recovery Auditors, the Quality Improvement Organizations (QIOs), Supplemental Medical Review Contractors (SMRCs), Comprehensive Error Rate Testing (CERT) auditors, and the Office of Inspector General (OIG). A recent OIG audit concerning mechanical ventilation found billing errors so the OIG offered a number of recommendations to CMS on how to make things better.

The OIG conducted a review to determine whether Medicare payments to hospitals for inpatient claims with certain MS-DRGs that required 96 or more consecutive hours of mechanical ventilation complied with Medicare requirements. MS-DRG 207 (respiratory system diagnosis) and MS-DRG 870 (septicemia or severe sepsis) both require that the patient has received 96 hours or more continuous mechanical ventilation, indicated on the claim with procedure code 96.72. These MS-DRGs pay a higher reimbursement rate than the corresponding MS-DRG assignments for a patient who did not receive 96 hours or more of ventilation.

Due to findings from previous OIG audits and the known risk of overpayments associated with mechanical ventilation, CMS has already taken actions to reduce the number of payment errors. They have claims processing edits based on the inpatient admission length of stay and also have provided education concerning the requirements for coding mechanical ventilation of 96 hours or more. One such education offering is the October 2011 Medicare Quarterly Compliance Newsletter.

In the current review, the OIG identified overpayments of $1.5 million for the specific claims reviewed. The OIG estimates overpayments of over $19.5 million for MS-DRGs 207 and 870 for the two-year audit period. Based on this finding, they determined current controls were inadequate to prevent incorrect billing and recommended additional actions by CMS to reduce payment errors. Specifically the current billing edit is based on total length of stay – the OIG recommends the edit be modified to look at the date mechanical ventilation begins and the discharge date to ensure there is sufficient time for 96 or more hours of mechanical ventilations. CMS concurred with the recommendation and replied, “Effective October 1, 2016, CMS will implement an edit to ensure correct coding of mechanical ventilation greater than 96 consecutive hours by using the mechanical ventilation procedure service date as the start date to calculate consecutive days.” CMS published official guidance for this in Transmittal 3504 from April 2016. To fulfill other recommendations from the audit Medicare will also be recouping the identified overpayments, expanding their own reviews, and providing additional education.

Hospitals need to be sure their coders understand the correct assignment of the procedure code for mechanical ventilation. Coders also need to be aware of the change in procedure code description from ICD-9 to ICD-10. The I-10 description for 5A1955Z is Respiratory ventilation, greater than 96 consecutive hours, which differs from the I-9 procedure code 96.72 description of 96 consecutive hours or more. The “greater than” description equates to a patient being on continuous mechanical ventilation for at least five (5) days, one day longer than the minimum 4 days of “96 hours or more.” This means Medicare’s new edit for October 2016 will look for less than 5 days from the date of initiation of mechanical ventilation until discharge.

Hospitals may want to consider some internal education and/or audits of claims assigned this procedure code. In other words, hospitals may want to “oversight” themselves, before oversight by Medicare or the overseers of Medicare oversight.