Auditors Uncover Billing Errors in Hospitals

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  • January 23, 2017
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Auditors Uncover Billing Errors in Hospitals

A doctor’s Hippocratic oath isn’t good enough for the Centers for Medicare & Medicaid Services (CMS): they need proof that every service a beneficiary receives is medically necessary. This proof comes in the form of diagnostic codes reported on claims, backed by observations documented by the doctor. Coding and documentation that don’t align can cost the doctor and/or his patient, dearly.
Hospitals in Ohio, Kentucky, Indiana, Michigan, Illinois, Minnesota, and Wisconsin found this out the hard way when a Medicare recovery auditor conducted studies to determine whether all covered, paid days associated with long-term acute care confinement equal to the short stay outlier threshold plus up to five days were reasonable, necessary, and appropriate.

Recovery Auditor Review Findings

The auditor reviewed the following Medicare severity-long term care-diagnostic related groups (MS-LTC-DRGs): 064 Intracranial hemorrhage or cerebral infarction w MCC, 177 Respiratory infections & inflammations w MCC, 189 Pulmonary edema & respiratory failure, 193 Simple pneumonia & pleurisy w MCC, 194 Simple pneumonia & pleurisy w CC, 207 Respiratory system diagnosis w ventilator support >96 hours, 208 Respiratory system diagnosis w ventilator support <=96 hours, 689 Kidney & urinary tract infections w MCC, 690 Kidney & urinary tract infections w/o MCC, 870 Septicemia or severe sepsis w MV >96 hours, 871 Septicemia or severe sepsis w/o MV >96 hours w MCC, and 872 Septicemia or severe sepsis w/o MV >96 hours w/o MCC.
In one study, the auditor reviewed 137 claims from 11 providers, covering 11 MS-LTC-DRGs, and adjusted the length of stay (LOS) in 72 audits based on the review of reasonable and necessary stays at the LTAC level of care. In another study, the auditor reviewed 63 claims from six providers covering five MS-LTC-DRGs, and adjusted the LOS in 35 audits, also based on the review of reasonable and necessary stays at the LTAC level of care.
Chances are, the LOS was warranted in every case. It’s too bad the claims lacked the evidence needed in a medical review to support payment.


CMS says, “Ensure that patients receive reasonable and necessary care that is appropriate for the diagnosis and condition of the patient at any time during the stay.” What they mean is that the patient must have a viable reason for being treated as an inpatient.
“The patient must demonstrate signs and/or symptoms severe enough to warrant the need for medical care and must receive services of such intensity that they can be furnished safely and effectively only on an inpatient basis,” CMS says.
Neither CMS nor their auditors were there; they can’t possibly know what went on in the hospital unless you tell them. And they won’t pay the claim unless you do.
“Documentation must demonstrate a continual progression in care that supports the appropriateness of the setting. A discharge plan should be established at the outset, and its goals should be demonstrably worked toward and achieve as efficiently as the patient’s condition and comorbidities allow, without unjustified, stalled, or repetitive care. A sustained plateau indicates that a lower level of care is more appropriate.”

Do Your Homework

The “LTCH Training Guide,” Chapter 3, Clinical Issues: Coverage, Coding and Medical Review may be of particular interest for the issues discussed in this finding.

Source: Medicare Quarterly Provider Compliance Newsletter, Volume 7, Issue 2

Renee Dustman
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Renee Dustman, BS, AAPC MACRA Proficient, is managing editor - content & editorial at AAPC. She holds a Bachelor of Science degree in Media Communications - Journalism. Renee has more than 30 years' experience in journalistic reporting, print production, graphic design, and content management. Follow her on Twitter @dustman_aapc.

No Responses to “Auditors Uncover Billing Errors in Hospitals”

  1. HealthTecSystems-Compliance Auditor says:

    The recovery auditor has only pointed out a problem with the health care system. For years SNF facilities have had to re-admit pt to the hospital, inorder to get their LTC benefits extended. Often these pts have out lived relatives and have no were to go. So Nurses for years have admitted pts with probable conditions to meet the insurance benefit requirement of them being an acute inpatient for a period of time. There is a gap and a huge amount of elderly will fall through it due to these audits. Often there are no LTC beds, the patients waits for placement, could take weeks. In the mean time, do you put a 89 yr old on the side walk? If you do then they will be ill enough to be placed in the acute setting, and may even share communicable diseases with the community you and your family. I am not saying the hospital cheated, only that what are their chooses?

  2. T Thivierge says:

    The physician s documentation should be read each time in which each medical coder can verify his selection of dx codes are accurate. I find some of my docs add the family block of ICDI0 but I ensure this is the most detail diagnostic code.

  3. anor bonds-jenkins says:

    how do i count covered and non covered days inpatient stay