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DRG 312 Reviews Put Providers 'In a Squeeze'

 |  By jcarroll@hcpro.com  
   October 02, 2012

Healthcare providers in some regions are bracing for a twist to DRG 312 : Syncope and collapse have been  listed for review by more than one auditor, and at more than one point in the payment process.

DRG 312, the first issue approved for prepayment auditing, was also announced by the Medicare Recovery Audit Contractors (MAC) CIGNA Government Services (CGS) as an issue subject to complex medical review for J15 providers.

Ohio and Kentucky make up the J15 states. Ohio is also one the states in the prepayment review demonstration program. Although CMS stated in a December open door forum that claims subject to prepayment review would be off-limits from future postpayment reviews from MACs and Recovery Auditors, it still remains to be seen how this will be done.

This puts providers in a difficult position, according to Nancy Beckley, MS, MBA, CHC, president, Nancy Beckley & Associates, LLC, in Milwaukee, WI.

"If you're in Ohio, you could potentially have your records requested by the MAC for a complex medical review, or you could have your records referred to the RAC [Recovery Auditor] for a prepayment review," she says. "This will put providers in a squeeze…the [CGS] error rate for DRG 312 is 79.9%."

She adds that providers can't do anything about what happened prior to the record requests aside from organizing those records, checking them for completeness, and sending them in. However, they can use the information and results moving forward to prepare for possible prepayment review.

Providers should take notice of this example and any others when it comes to high error rates found in postpayment claims audits and prepare themselves proactively to defend against prepayment reviews. If not, it will be like "shooting fish in a barrel" for the Recovery Auditors, suggests Beckley.

In addition, states that are not subject to the demonstration project should also take notice, even though it does not yet apply to them. Recovery Auditors are set to gain a lot of knowledge in terms of provider weaknesses and high denial rates, much like they did in the original [RAC] Demonstration Project, such as in the case of inpatient rehabilitation facility claims in California, according to Tanja Twist, director of patient financial services at Methodist Hospital of Southern California.

"With rehab claims [during the demonstration] we lost the whole payment and were only able to recoup the ancillary services—they took back $11,000 to $15,000 and we were able to rebill for only hundreds—and there was no downcoding of the CMG (case-mix group) either; they either met criteria or did not," she says. "I fear the same is true with this new round of PPR [prepayment review] because their focus is on the short stay (1–2 day) admits, looking to see if patients met inpatient criteria."

She continued, "If not, they won't downgrade the DRG, they will deny the entire DRG payment."

What should providers do? First, they need to pay close attention to what the Kentucky and Ohio probe shows, says Beckley. CGS explains in its notice the reason for denials for DRG 312, and also presents some advice going forward. Of the 79.9% denial rate, a significant percent (73.2%) is made up of denial code 5J504. The CGS notice states the following about 5J504:

Reason for denial

  • Documentation did not support medical necessity
  • Denial code 5J503 (3.7%),
  • Denial code 56900 (2.7%),
  • 5CHGE – DRG up code/down code (0.1 %).

Avoiding denials

  • Ensure that all services were medically necessary on an impatient basis instead of a less intensive setting
  • Documentation should include dates of service billed such as physician progress notes, physical examinations, assessments, diagnostic tests and laboratory test results, history and physical, nurse's notes, consultations, surgical procedures, orders and discharge summary and any other documentation to support the inpatient admission
  • Include documentation of services, medication and medical interventions performed in the emergency department
  • For elective surgical procedures, include documentation to support the necessity of the procedure including pre-surgical interventions and outcomes

Hospitals should also run a risk analysis for not only the first approved DRG (i.e., MS-DRG 312), but for all eight of the approved DRGs, looking specifically at their average length-of-stay to find their weaknesses and help assess the additional documentation request (ADR) rate, suggests Twist. The remaining approved DRGs are as follows; no dates have been announced:

  • MS-DRG 069, transient ischemia
  • MS-DRG 377, G.I. hemorrhage W MCC
  • MS-DRG 378, G.I. hemorrhage W CC
  • MS-DRG 379, G.I. hemorrhage W/O CC/MCC
  • MS-DRG 637, diabetes W MCC
  • MS-DRG 638, diabetes W CC
  • MS-DRG 639, diabetes W/O CC/MCC

James Carroll is associate editor for the HCPro Revenue Cycle Institute.

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