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Medicare’s Recovery Audit program affords a variety of ways for hospitals to lose money. But it makes it harder to accept when you don’t have a process to deal with the issues. In this article we look at an inpatient issue that offers such challenges.

When we think of Recovery Auditor reviews of hospital inpatient records, we normally think of DRG Validation reviews and the ever-so-popular Medical Necessity reviews. But the Recovery Auditors also review inpatient records for other issues.

The topic addressed here is actually several different issues, all dealing with the correct assignment of the patient’s discharge disposition status. These include:

• reviews of acute care hospital to hospital transfers receiving an overpayment due to the assignment of an incorrect discharge status code,
• reviews of overpayments when a patient receives post-acute care but is coded as a discharge to home, and
• underpayment reviews for patients coded as a transfer to a post-acute care setting who never actually receive post-acute care.

Some of the errors may be the result of an error in code assignment, but a lot of these are due to either incomplete documentation concerning the patient’s post-discharge plans or circumstances that change after the patient is discharged.

So what can a hospital do to prevent receiving an improper payment, either over or under? First make sure physicians, case managers and discharge planners document clearly in the medical record the plans for the patient post-discharge. Also develop an avenue for coders to follow up on discharge status if the documentation in the record is unclear or conflicting. Now the harder part is how to address those patients that do not end up where they were planned to go. Some hospitals have implemented systems to verify the actual post-discharge care the patient receives. Examples of this would be contacting patients scheduled to begin home health care after discharge to see if this actually occurred or contacting skilled nursing facility to see if the patient was actually admitted. Medicare recently addressed post-acute care transfer underpayments in an MLN Matters article, SE1317.

This can be a difficult issue and contains financial risks for hospitals. Hopefully, being aware of what the issues are, understanding the regulations and having a plan in place will help reduce risks for hospitals.

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.

CMS has released the April 2013 Medicare Quarterly Provider Compliance Newsletter. As a reminder, this newsletter is an educational product to assist providers in understanding audit findings identified by Contractors such as Medicare Administrative Contractors (MACs), Recovery Auditors (RAs), Comprehensive Error Rate Testing (CERT) contractors and the Office of Inspector General (OIG).

This edition of the newsletter addressed several findings related to the review of Inpatient hospital claims. Specifically, findings are provided for review of the following MS-DRGs:

• Neoplasm Surgery (MS-DRGs 826, 827, 828, 829, 830, 834, 835 and 836)
• Pancreas, Liver & Shunt Procedures (MS-DRGs 405, 406 and 407)
• Medical Necessity for respiratory neoplasms with a complication or co-morbidity (CC) (MS-DRG 181),
• Esophagitis, Gastroenteritis, and Miscellaneous Digestive Disorders with MCC (MS-DRG 391); and
• Acute Inpatient Hospitalization – Signs and Symptoms without MCC (MS-DRG 948)

Examples of review findings include:

• Incorrect selection of the Principal Diagnosis, reminding providers that “the circumstances of inpatient admission always govern the selection of principal diagnosis” and “is defined in the Uniform Hospital Discharge Data Set (UHDDS) as that condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care.”
• High percentage of coding errors, reminding providers that “DRG validation requires that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, match both the attending physician description and the information contained in the beneficiary’s medical record.”
• Medically unnecessary inpatient hospitalizations, reminding providers that:

1. “Medicare pays for inpatient hospital services that are medically necessary for the setting billed. The Medicare Benefit Policy Manual, Chapter 1, Section 10, states that the physician or other practitioner responsible for a patient’s care at the hospital is also responsible for deciding whether the patient should be admitted as an inpatient.”
2. “The Medicare Integrity Program Manual, Chapter 6, Section 6.5.2.A, states that inpatient care is required only if the patient’s medical condition, safety or health would be significantly and directly threatened if care were provided in a less intense setting.”

The following table is being provided to help you identify which MACs and RAs have currently targeted the MS-DRGs from this newsletter. A review of the specific examples and findings can afford you the proactive opportunity to ensure your records are coded accurately and that the hospitalizations were medically necessary.

CMS’s Medicare Learning Network publishes quarterly Medicare Compliance Newsletters to address the findings from reviews by Medicare contractors such as MACs, RAs (formerly RACs), ZPICs, CERT and the OIG. The January 2013 edition addresses several findings related to review of inpatient hospital claims.

Lack of Medical Necessity for Inpatient Admission always seems to be a big topic and this quarter is no exception. Three different DRGs are discussed with examples of services that should have been provided in a lower level of care setting. Patients did not meet criteria for an inpatient admission for the following DRGs for the reasons noted.

• MS-DRG 491, Back & Neck Procedures excluding Spinal Fusion
• Patient did not experience any intraoperative or post-op complications; and
• Recovery phase was within expectations for this procedure.
• MS-DRG 312, Syncope and Collapse
• Signs and symptoms documented were not significant or severe enough to warrant the need for medical care at the intensity of an inpatient admission.
• Evaluation and treatment could have been rendered as observation services
• The medical record does not establish the need for acute care hospitalization at an inpatient level.
• MS-DRG 516, Other musculoskeletal system & connective tissue operating room (O.R.) procedures with complicating conditions (CC).
• Elective, scheduled, non emergent kyphoplasties for compression fractures in patients with pre-operative medical clearance and a low probability of complications can be performed at an outpatient level of care.

Also, Coding Errors were found for Other OR Procedures for Injuries (DRGs 907, 908, and 909). In the examples given, a procedure or acute injury from a prior admission was coded as occurring during or being the cause of the current admission. Coders should only code procedures performed during the current inpatient admission. Subsequent encounters require the use of an orthopedic after care code.

Refer to the Compliance Newsletter to see the specific examples and the complete discussions.