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RAC Demonstration Identifies Improper Payment and Coding Vulnerabilities

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  • In Audit
  • October 1, 2010
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The Centers for Medicare & Medicaid Services (CMS) recently released two special edition MLN Matters articles that disseminate high dollar improper payment and coding vulnerabilities identified during the Recovery Audit Contractor (RAC) demonstration. With the expansion of the RAC program and the initiation of complex medical necessity review in all four RAC regions, inpatient hospitals should notice the information in these provider education articles to avoid unnecessary denials of similar fee-for-service claims submitted to Medicare.

High Dollar Improper Payment Vulnerabilities

MLN Matters article SE1027 lists 17 of the high-risk medical necessity vulnerabilities inpatient hospitals should watch out for. The following claims were denied because the demonstration RACs determined the submitted documentation did not support an inpatient level of care and the provided services could have been performed in a less intensive setting.

  • Cardiac Defibrillator Implant (DRG 514/515)
  • Heart Failure and Shock (DRG 127)
  • Other Cardiac Pacemaker Implantation (DRG 116)
  • Chest Pain (DRG 143)
  • Misc. Digestive Disorders (DRG 182)
  • Other Vascular Procedure (DRG 478)
  • COPD (DRG 88)
  • Medical Back Problems (DRG 243)
  • Nutritional & Misc. Metabolic Disorders (DRG 296)
  • Transient Ischemia (DRG 524)
  • Other Circulatory System Diagnoses (DRG 144)
  • Kidney & UTI (DRG 320)
  • Cardiac Arrhythmia (with CC DRG-138)
  • Degenerative Nervous System Disorders (DRG 012)
  • Atherosclerosis (with CC DRG-132)
  • Other Digestive System Diagnosis (DRG 188)
  • Percutaneous Cardiac Procedure (DRG 517)

In addition to the list above, the demonstration RACs determined there were three other general categories of denials, which included:

  • Medical necessity denials for multiple codes;
  • Ambulatory surgical center (ASC) list violations for codes paid at the inpatient rate that should have been paid as outpatient (no complications identified to justify inpatient stay); and
  • Other outpatient charges that should have been billed since services were not medically necessary in the inpatient setting.

CMS reminds providers that medical documentation should contain sufficient, accurate information to: 1) support the diagnosis; 2) justify the treatment/procedures; 3) document the course of care; 4) identify treatment/diagnostic test results; and 5) promote continuity of care among health care providers.

Providers should document any pre-existing medical problems or extenuating circumstances that make admission of the Medicare beneficiary medically necessary. Some factors that providers should consider when making the decision to admit may include:

  • The severity of the signs and symptoms exhibited by the patient;
  • The medical predictability of something adverse happening to the patient;
  • The need for diagnostic studies; and
  • The availability of diagnostic procedures at the time when and at the location where the patient presents.

Admissions of particular patients are not covered or noncovered solely on the basis of the length of time the patient actually spends in the hospital (see chapter 1, section 10 of the Medicare Benefit Policy Manual on the CMS website).

Coding Vulnerabilities

MLN Matters article SE1028 focuses on four RAC demonstration-identified inpatient hospital coding vulnerabilities, which included:

  • Respiratory System Diagnosis with Vent support – (CMS DRG 475) – Principal diagnosis on the claim did not match the principal diagnosis in the medical record.
  • Closed Biopsy of Lung (CMS DRG 076, 077,120) – A transbronchial lung biopsy was billed but the medical record showed a transbronchial biopsy was performed.
  • OR Procedure for Infections, Parasitic Diseases (CMS DRG 415) – The codes on the claim did not match information in the medical record.
  • Coagulopathy (CMS DRG 397/143) – Principal diagnosis on the claim did not match the principal diagnosis in the medical record.

CMS reminds inpatient hospital providers that all inpatient admissions must have the principal diagnosis specifically identified by the attending physician. Secondary diagnoses also must be documented by the attending physician and:

  • Clinically evaluated; or
  • Diagnostically tested; or
  • Therapeutically treated; or
  • Cause an increase in the length of stay or nursing care (Federal Register, July 31, 1985, vol. 50, No. 147, pp. 31038-40).

General Advice

To avoid unnecessary claims denial, CMS also recommends the following “be” attitudes:

Be clear. Providers should ensure that all fields on documentation tools (such as assessments, flow sheets, checklists, etc.) are completed, as appropriate, and legible. If a field is not applicable, providers should use an entry like “N/A” to show that the questions were reviewed and answered. Fields that are left blank or cannot be deciphered often lead the reviewer to make an inaccurate determination.

Be consistent. If an entry is made that contradicts previous documentation, include documentation that explains why there is a contradiction.

Be proactive. Demonstration review staff often noted that providers failed to adequately document significant changes in the patient’s condition or care issues that in some instances impacted the review determination. Ensure any information that affects the billed services and is acquired after physician documentation is complete is added to the existing documentation in accordance with accepted standards for amending medical record documentation.

Certified Inpatient Coder CIC

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