OIG: Hospitals are upcoding severity levels for Medicare patients

Inpatient medical center stays have turn out to be a lot more high priced to the Medicare application. It is really a pattern that began even ahead of the COVID-19 pandemic.

A new report from the Division of Wellness and Human Services’ Office environment of the Inspector Normal uncovered a attainable cause: Lots of hospitals are increasingly billing for inpatient stays at the highest severity degree, which is also the most high priced.

In an evaluation of Medicare Element A statements from 2014 to 2019, the OIG identified that the priciest stays – people involving a serious health-related complication – rose about 20{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627}, with the price gap concerning the highest and most affordable Medicare Severity Diagnosis Linked Team for an sickness like pneumonia settling at $four,175 vs. $eight,505. That is a lot more than double around the 5-12 months interval.

In the long run, this accounted for practically half of all Medicare spending on inpatient medical center stays. The selection of stays billed at every single of the other severity ranges decreased. 

At the exact time, the common size of continue to be decreased for stays at the highest severity degree, although the common size of all stays remained largely the exact. 

The problem, in accordance to OIG, is that stays at the highest severity degree are susceptible to inappropriate billing methods these as upcoding, the follow of billing at a degree larger than is warranted. 

Exclusively, practically a third of these stays lasted a significantly limited amount of money of time. Additional than half of the stays that had been billed at the highest severity degree had only 1 diagnosis qualifying them for payment at that degree. Hospitals also diversified appreciably in their billing of these stays.

What is THE Effects?

Hospitals billed Medicare for eight.seven million inpatient medical center stays in FY 2019. About 40{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627} of them – three.5 million stays – had been billed at the highest severity degree. These are generally stays for which the medical center bills for at the very least 1 significant complication.

Medicare used $109.eight billion for inpatient medical center stays in FY 2019. Practically half of that amount of money, $54.6 billion, was for stays billed at the highest severity degree. Medicare paid out an common of $fifteen,five hundred per continue to be billed at the highest severity degree.

Medicare payments for stays at the highest severity degree greater steadily in every single of the six many years examined. The boosts amounted to a lot more than $10 billion, or 24{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627}. In general, Medicare payments for inpatient medical center stays greater by eight{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627} for the duration of the exact time interval. 

The raise in the selection of stays billed at the highest severity degree would ordinarily suggest that beneficiaries had been sicker overall. But the reduce in common size of continue to be probably undermines that idea because it really is inconsistent with sicker beneficiaries. Length of continue to be generally has a good connection to severity of continue to be sicker beneficiaries continue to be in the medical center lengthier. 

On top of that, the common size of all continue to be remained largely the exact from 2014 to 2019, which suggests that beneficiaries in basic had been not sicker in FY 2019 than they had been in previous many years. 

Specified the reduce in the common size of continue to be at the highest severity degree and the indication that beneficiaries in basic had been not sicker, the raise in stays billed at the highest severity degree likely was pushed by alterations in medical center billing methods fairly than by alterations in the beneficiary population, in accordance to the OIG. 

This is substantial, for the reason that Medicare pays hospitals for every single inpatient continue to be centered on the assigned MS-DRG, not on the amount of money of time the beneficiary spends in the medical center. 

Virtually thirty{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627} of stays billed at the highest severity degree, almost a million of them, lasted a significantly limited amount of money of time. Exclusively, they had been a lot more than 20{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627} shorter than the necessarily mean size of continue to be for the assigned MS-DRG. 

Shorter stays are not inherently problematic, but the selection of these stays raises issues about the accuracy and appropriateness of the troubles billed by the medical center. Though the troubles billed propose sicker beneficiaries, the shorter lengths of continue to be stage to beneficiaries who are fewer unwell. That suggests opportunity upcoding on the part of hospitals. 

Collectively, Medicare paid out hospitals about $fourteen.5 billion for stays that lasted an especially limited amount of money of time. That is $four.nine billion a lot more than it would have paid out if these stays had been billed at the upcoming lessen severity degree, that means Medicare probably overpaid hospitals by a substantial amount of money if even a fraction of these stays had been billed inappropriately.

THE Bigger Pattern

OIG recommends a selection of steps. The Centers for Medicare and Medicaid Services, it said, ought to carry out focused critiques of MS-DRGs and medical center stays that are susceptible to upcoding and the hospitals that frequently bill for them.

Exclusively, CMS ought to concentrate on stays at the highest severity degree with particular qualities, these as people that are significantly limited or that have only 1 significant complication. 

CMS ought to also take into consideration conducting a lot more in-depth critiques of the health-related file that look for inconsistencies in diagnoses that get in touch with into question the appropriateness of the coding.

In addition to utilizing the final results of the critiques to recoup overpayments, CMS ought to use them to teach hospitals about proper billing, modify coding policies and take into consideration whether even more actions ought to be taken to disincentivize inappropriate billing, the OIG said.
 

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