OIG: Hospitals are upcoding severity levels for Medicare patients

Inpatient medical center stays have turn out to be a lot more costly to the Medicare method. It can be a pattern that began even in advance of the COVID-19 pandemic.

A new report from the Division of Overall health and Human Services’ Business of the Inspector Basic uncovered a possible rationale: Quite a few hospitals are more and more billing for inpatient stays at the best severity stage, which is also the most costly.

In an evaluation of Medicare Element A claims from 2014 to 2019, the OIG uncovered that the priciest stays – those people involving a severe healthcare complication – rose about twenty%, with the cost hole concerning the best and lowest Medicare Severity Prognosis Associated Team for an sickness like pneumonia settling at $four,one hundred seventy five vs. $eight,505. Which is a lot more than double around the 5-calendar year time period.

Finally, this accounted for just about 50 % of all Medicare paying on inpatient medical center stays. The number of stays billed at each of the other severity concentrations reduced. 

At the very same time, the typical size of stay reduced for stays at the best severity stage, even though the typical size of all stays remained mainly the very same. 

The issue, in accordance to OIG, is that stays at the best severity stage are susceptible to inappropriate billing methods this sort of as upcoding, the apply of billing at a stage better than is warranted. 

Specially, just about a 3rd of these stays lasted a specially shorter total of time. Far more than 50 % of the stays that were being billed at the best severity stage had only one particular prognosis qualifying them for payment at that stage. Hospitals also various drastically in their billing of these stays.

What is actually THE Influence?

Hospitals billed Medicare for eight.seven million inpatient medical center stays in FY 2019. About forty% of them – three.five million stays – were being billed at the best severity stage. These are usually stays for which the medical center payments for at least one particular main complication.

Medicare expended $109.eight billion for inpatient medical center stays in FY 2019. Practically 50 % of that total, $54.6 billion, was for stays billed at the best severity stage. Medicare compensated an typical of $fifteen,five hundred per stay billed at the best severity stage.

Medicare payments for stays at the best severity stage enhanced steadily in each of the six decades examined. The improves amounted to a lot more than $ten billion, or 24%. Total, Medicare payments for inpatient medical center stays enhanced by eight% in the course of the very same time time period. 

The maximize in the number of stays billed at the best severity stage would ordinarily imply that beneficiaries were being sicker general. But the reduce in typical size of stay perhaps undermines that strategy given that it is inconsistent with sicker beneficiaries. Length of stay usually has a beneficial romance to severity of stay sicker beneficiaries stay in the medical center lengthier. 

On best of that, the typical size of all stay remained mainly the very same from 2014 to 2019, which indicates that beneficiaries in basic were being not sicker in FY 2019 than they had been in past decades. 

Specified the reduce in the typical size of stay at the best severity stage and the sign that beneficiaries in basic were being not sicker, the maximize in stays billed at the best severity stage probably was pushed by alterations in medical center billing methods fairly than by alterations in the beneficiary populace, in accordance to the OIG. 

This is significant, because Medicare pays hospitals for each inpatient stay based on the assigned MS-DRG, not on the total of time the beneficiary spends in the medical center. 

Practically thirty% of stays billed at the best severity stage, pretty much a million of them, lasted a specially shorter total of time. Specially, they were being a lot more than twenty% shorter than the suggest size of stay for the assigned MS-DRG. 

Shorter stays are not inherently problematic, but the number of these stays raises thoughts about the precision and appropriateness of the issues billed by the medical center. While the issues billed suggest sicker beneficiaries, the shorter lengths of stay stage to beneficiaries who are a lot less unwell. That indicates probable upcoding on the portion of hospitals. 

Collectively, Medicare compensated hospitals about $14.five billion for stays that lasted an primarily shorter total of time. Which is $four.nine billion a lot more than it would have compensated if these stays had been billed at the up coming reduce severity stage, which means Medicare perhaps overpaid hospitals by a significant total if even a portion of these stays were being billed inappropriately.

THE More substantial Pattern

OIG endorses a number of steps. The Facilities for Medicare and Medicaid Services, it explained, should perform focused reviews of MS-DRGs and medical center stays that are susceptible to upcoding and the hospitals that frequently monthly bill for them.

Specially, CMS should concentrate on stays at the best severity stage with specific attributes, this sort of as those people that are specially shorter or that have only one particular main complication. 

CMS should also contemplate conducting a lot more in-depth reviews of the healthcare report that glance for inconsistencies in diagnoses that simply call into problem the appropriateness of the coding.

In addition to employing the final results of the reviews to recoup overpayments, CMS should use them to educate hospitals about suitable billing, modify coding policies and contemplate no matter whether additional methods should be taken to disincentivize inappropriate billing, the OIG explained.
 

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