More DRG Reductions Coming? Opening an Artery Creates an Opening for Auditors

More DRG Reductions Coming? Opening an Artery Creates an Opening for Auditors

Tired of me talking about the Medicare Advantage (MA) plans? Me too, so in this article I am not going to mention them. So, let’s talk about other things. But do not worry, I will have more to say before Jan. 1.

First up, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) must listen to Monitor Mondays. Two weeks after I talked about transfers of Medicare patients, they released a report on the Centers for Medicare & Medicaid Services (CMS) transfer payment adjustment system that I discussed. As I described in my segment, there is a select number of Diagnosis-Related Groups (DRGs) where if the patient is transferred to another hospital or for post-acute care, the payment to the hospital is subject to a payment adjustment based on the length of stay and the geometric mean length of stay (GMLOS) of the billed DRG.

In this review, the OIG used extrapolation to determine that if CMS applied that transfer DRG payment reduction to every DRG instead of limiting it to specific DRGs, the Medicare Trust Fund would save about $350 million per year. Now, I am not going to criticize their conclusion or their need to work to protect the Trust Fund, but I will criticize three things.

First, I am sure every one of us can create ways for CMS to pay less and protect the Trust Fund. I will start by suggesting they hold the MA plans financially accountable for their years of knowingly reporting invalid diagnoses. In a 2012 audit of Pacificare, which was owned by UnitedHealth Group, the OIG found they were overpaid $423 million. One single MA plan that provided coverage to 344,000 beneficiaries in one state accounted for improper payments of over $400 million. Was that ever collected? How many billions of Trust Fund dollars could be saved if CMS actually collected all overpayments to MA plans over the last 15 years from over-coding?

Next, the basis of the DRG payment system is, simplistically, that hospitals win some and lose some. I can understand making a payment adjustment for the transfer of an inpatient from a hospital to another inpatient facility, including inpatient rehabilitation facilities and long-term acute care hospitals, for treatment of the same condition, but discharging a patient to receive home care or to a skilled nursing facility (SNF) does not warrant a payment reduction, as the care is much less intense.

In comparison, the inpatient outlier payment system would need to be modified to provide additional payments for any patient who exceeds the GMLOS by two days instead of only paying additional payments when costs exceed the DRG payment by tens of thousands of dollars.

I will also criticize the OIG’s math in this audit. They found 109,000 admissions from 2017 to 2019 that would have had a payment adjustment based on length of stay compared to the GMLOS, and then randomly selected 100 claims for review. Is that a statistically valid sample, when 0.09 percent of claims were audited? I doubt it.

Also, they seem to have made a significant error that just last month they criticized hospitals for making. They found these claims by looking at the DRG and the coding on the claim for the discharge destination.

What they did not do was query the common working file to determine if the patient actually received that care. As they pointed out in their previous audit, patients are often referred to a SNF or for home care but never receive that service, and the hospital claim is never corrected. Here, the OIG assumed that the care was received, and therefore a payment adjustment was justified when it may not have been appropriate.

Now, of course, the OIG only makes recommendations, and CMS has committed to performing their own analysis at some point in the future. I would not hold my breath waiting for this, as it has been four years since CMS updated their discharge planning conditions of participation, and we still have no interpretive guidelines.

Now, let me be clear that I do not fault CMS for this. As I have repeatedly said, CMS’s handling of the COVID-19 public health emergency was nothing short of miraculous, and they now have a lot of catching up to do, likely with the same staffing limitations that all of us still face.

Another topic that might be more pertinent: if your hospital performs carotid artery stents or your doctors want to perform them, you must go online and get the new National Coverage Analysis that outlines when CMS will cover the procedure. There are significant changes to coverage that may broaden use while also imposing new requirements.

Up until now, CMS required facilities to register and be approved to perform the procedure. This will no longer be required. Next, in the past only, patients at high risk for carotid endarterectomy could be considered for stenting. CMS is now removing that requirement, allowing standard-risk patients to have this procedure covered.

But most importantly, CMS is adding the requirement for a shared decision-making visit between a health professional and the patient. That discussion must include the options of endarterectomy, stenting, and optimal medical therapy, the risks and benefits of each of those options, what the clinical guidelines state, and then of course the patient’s preferences and priorities.

Now, while requiring shared decision-making is not new, in this case, it is the first procedure where there are not any published tools that can be used, as there are for defibrillators or Watchman. That means you will need to either develop your own tool or count on your doctors to document all the required elements. Remember, the auditors thrive on denying due to technical omissions, so don’t ignore the new requirements. Create a checklist and require it prior to any scheduled carotid artery stent.

Print Friendly, PDF & Email

Ronald Hirsch, MD, FACP, CHCQM, CHRI

Ronald Hirsch, MD, is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays. The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

Related Stories

Knowing the Score: MIPS

Knowing the Score: MIPS

EDITOR’S NOTE: Medicare’s legacy quality reporting programs were consolidated and streamlined into the Merit-Based Incentive Payment System, known as “MIPS.”  The Merit-Based Incentive Payment System

Read More

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

2024 Observation Services Billing: How to Get It Right

2024 Observation Services Billing: How to Get It Right

Dr. Ronald Hirsch presents an essential “A to Z” review of Observation, including proper use for Medicare, Medicare Advantage, and commercial payers. He addresses the correct use of Observation in medical patients and surgical patients, and how to deal with the billing of unnecessary Observation services, professional fee billing, and more.

March 21, 2024
Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets

Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets

Explore the top-10 federal audit targets for 2024 in our webcast, “Top-10 Compliance Risk Areas for Hospitals & Physicians in 2024: Get Ahead of Federal Audit Targets,” featuring Certified Compliance Officer Michael G. Calahan, PA, MBA. Gain insights and best practices to proactively address risks, enhance compliance, and ensure financial well-being for your healthcare facility or practice. Join us for a comprehensive guide to successfully navigating the federal audit landscape.

February 22, 2024
Mastering Healthcare Refunds: Navigating Compliance with Confidence

Mastering Healthcare Refunds: Navigating Compliance with Confidence

Join healthcare attorney David Glaser, as he debunks refund myths, clarifies compliance essentials, and empowers healthcare professionals to safeguard facility finances. Uncover the secrets behind when to refund and why it matters. Don’t miss this crucial insight into strategic refund management.

February 29, 2024
Mastering Medicare Notices: Your Essential Guide to the MOON and Beyond

Mastering Medicare Notices: Your Essential Guide to the MOON and Beyond

Hospital staff continue to grapple with the complexities of Medicare notices.  In this webcast, Tiffany Ferguson, LMSW, CMAC, ACM, will present the latest requirements for preparation and delivery of CMS-mandated forms, including the Advance Beneficiary Notice (ABN), Hospital-Issued Notices of Noncoverage (HINNs), Important Message from Medicare (IMM) and Medicare Outpatient Observation Notice (MOON), and practical solutions through foolproof workflows and compliance auditing.

January 25, 2024
OBGYN ICD-10-CM/PCS Coding: Mastering Complex Guidelines and Compliance

OBGYN ICD-10-CM/PCS Coding: Mastering Complex Guidelines and Compliance

Dive into the complexities of Obstetrics and Gynecology coding, addressing challenges from antepartum to postpartum care. Learn to decode intricate guidelines, tackle claim denials, and safeguard your practice’s financial health. Uncover the secrets to compliant coding, reducing errors, and optimizing reimbursement. With practical exercises and expert insights, this webcast empowers coders, auditors, and healthcare professionals to elevate their OBGYN coding prowess.

February 28, 2024
Unlocking Clinical Documentation Excellence: Empowering CDISs & Coders

Unlocking Clinical Documentation Excellence: How to Engage the Provider

Uncover effective techniques to foster provider understanding of CDI, empower CDISs and coders to customize their queries for enhanced effectiveness, and learn to engage adult learners, leveraging their experiences for superior learning outcomes. Elevate your CDI expertise, leading to fewer coding errors, reduced claim denials, and minimized audit issues.

December 14, 2023
Coding for Spinal Procedures: A 2-Part Webcast Series

Coding for Spinal Procedures: A 2-Part Webcast Series

This exclusive ICD10monitor webcast series will help you acquire the critical knowledge you need to completely and accurately assign ICD-10-PCS and CPT® codes for spinal fusion and other common spinal procedures.

October 26, 2023

Trending News

It’s Heart Month! Use code HEART24 at checkout to receive 20% off your cardiology products. Click here to view our suite of Cardiology products!