News Alert: OIG Auditing of Post-Acute Transfer Claims Roils Hospitals

The OIG has instructed MACs to recoup the entire DRG payment on claims dating back to 2016.

EDITOR’S NOTE: The RACmonitor special bulletin of Jan. 30, “News Alert: Widespread Recoupments of Incorrect Post-Acute Transfer Claims Have Begun,” is prompting alarm among hospitals, as evidenced by the response from Dr. R. Phillip Baker.

In response to the directive issued by U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG), in which the federal healthcare watchdog has instructed Medicare Administrative Contractors (MACs) to recoup the entire DRG payment on claims dating back to 2016, Dr. R. Phillip Baker, a physician advisor, is urging physicians to take immediate action.

“The recoupment is completely out of proportion to the error, as the normal finding would only result in the recoupment of the difference between the actual payment and what should have been paid with the correct code on the claim,” Baker said in an email to RACmonitor. “For the most part, the denial is correct, and an error occurred on the claim, so the standard appeal process would not help.”

The other issue, according to Baker, is that these claims are well beyond the time frame for filing a corrected claim, so there is no way to lessen the impact through that process.

“The letter (results of the OIG audit on disposition codes) issued does allow a rebuttal process, but you only have 15 days to use this option from the date of the letter,” Baker said. “I spoke with Dr. Toni Sculimbrene at Palmetto, GBA, who advised that the rebuttal process should be utilized, as the MAC has no other option for stopping the recoupment.” 

According to Baker, as stated in the letter, “a rebuttal is not intended to review supporting medical documentation, nor disagreement with the overpayment decision. A rebuttal shall not duplicate the redetermination process.” The rebuttal, he noted, is to address that the recoupment was not done using the correct methodology, as it should, but only addresses the part of the payment that was incorrect (rather than the entire payment).

“I have also reached out to the South Carolina Hospital Association, and encourage you to reach out to your state associations and the American Hospital Association (AHA) to encourage their involvement,” Baker said. “The more complaints issued about this unfair and inappropriate process, (the more it) will make the Centers for Medicare & Medicaid Services (CMS) and the OIG have to take notice and address the issue. It is only by everyone filing these rebuttals that the process can change to be fair.”

Baker urged fellow physicians that if they have cases they find were inappropriately denied, then they also need to follow the redetermination process also addressed in the letter.

“You do not want to miss the time frames that apply to that as well,” Baker urged. “Even if this is the case, still, file the rebuttal about the issue of recouping the entire payment.”