The OIG plans to target organizations' revenue cycle in audits of severe malnutrition reporting and billing.
The OIG recently announced it will conduct statewide reviews to determine whether hospitals complied with Medicaid billing requirements when assigning severe malnutrition diagnosis codes to inpatient hospital claims.
This comes on the heels of the OIG's previous, 2020 audit report that determined hospital compliance with Medicare billing requirements when assigning diagnosis codes for severe malnutrition.
During that audit, the OIG found that of the 200 claims reviewed, only 27 were correctly coded. The errors identified in the random sample amounted to $914,128 in overpayments.
To avoid a potential run-in with the OIG on this matter, revenue cycle leaders should work with the directors of their clinical documentation integrity and coding departments to ensure that coding guidelines and clinical criteria are being met by their staff.
Department heads should be aware that actively auditing malnutrition diagnoses codes, tightening up coder education, and reviewing clinical criteria and documentation practices with physicians will help circumvent these compliance issues.
Organizations are allowed to bill for treatment of malnutrition based on the severity of the condition (mild, moderate, or severe) and whether it affects patient care.
According to CMS, severe malnutrition is classified as a major complication or comorbidity (MCC). Adding an MCC to a claim can result in an increased payment by causing the claim to be coded in a higher diagnosis-related group.
The OIG expects to release its audit of Medicaid inpatient hospital claims with severe malnutrition in 2023.
Strategizing across departments will be a crucial step in avoiding these penalties as directors within the middle revenue cycle can take the lead on education.
Under the program, CMS reduces overall Medicare payments for hospitals that rank in the worst-performing quartile of all hospitals on measures of hospital-acquired conditions.
Every year, the facilities in the lowest-performing 25% are penalized by losing 1% of their Medicare payments. This payment adjustment applies to all Medicare discharges for the applicable fiscal program year when CMS pays hospital claims.
For fiscal year 2022, 764 hospitals will have their Medicare payment rates reduced for having high infection rates and other patient complications from mid-2018 to 2019. In response to the 2019 COVID-19 public health emergency, CMS excluded all calendar year 2020 data from this year's hospital-acquired condition program calculations and plans to do so indefinitely.
What can revenue cycle leaders do to avoid these penalties?
Reporting hospital-acquired conditions has been required by CMS since 2007 as legislated by the Deficit Reduction Act of 2005.
Hospital-acquired conditions are reported by HHS to identify high-cost and high-volume cases. These conditions result in the assignment of a case to a Medicare-severity diagnosis-related group that has a higher payment when present as a secondary diagnosis and could reasonably have been prevented through the application of evidence‑based guidelines.
Looping in middle revenue cycle directors, such as a coding director, is a crucial step in avoiding these penalties.
Having staff regularly review the basics of reporting hospital-acquired-conditions, preparing for unanticipated coding situations, and focusing on correctly identifying conditions that are present-on-admission will ensure your organization can submit claims with the utmost accuracy.
When a hospital-acquired condition occurs during a hospital stay, additional reimbursement isn't provided to the hospital for the avoidable condition.
Because of this, when working with your coding, clinical documentation integrity, or other middle revenue cycle directors, it’s also useful to have them pay particular attention to present-on-admission indicator reporting, as these indicators can have a large impact on reimbursement.
Educating middle revenue cycle staff and monitoring their use of present-on-admission indicators is critical for an organization since conditions reported as present-on-admission will not tie your organization to a hospital-acquired condition, thus avoiding the penalty.
Also, leaders could consider auditing present-on-admission indicators. While this isn't a typical coding audit, results would be of large value to the organization in avoiding penalties.
The hospital-acquired condition payment provision only applies to inpatient hospitals. The following list of organizations are exempt from that provision:
Cancer hospitals
Children's inpatient facilities
Critical access hospitals
Inpatient psychiatric hospitals
Inpatient rehabilitation facilities
Long-term care hospitals
Maryland waiver hospitals
Religious non-medical healthcare institutions
Veterans administration/department of defense hospitals
