Noridian Healthcare Solutions, LLC (Noridian), as the Supplemental Medical Review Contractor (SMRC) for the Centers of Medicare and Medicaid (CMS), has conducted post-payment review of claims for Medicare Part A billed on dates of service from January 1, 2019, through December 31, 2019. Below are the review results:

Background

The Office of Inspector General (OIG), under Report A-03-17-00010 dated July 2020, titled “Hospitals Overbilled Medicare $1 Billion By Incorrectly Assigning Severe Malnutrition Diagnosis Codes to Inpatient Hospital Claims”, found that hospitals incorrectly billed claims with the diagnosis codes for severe malnutrition. Through medical record review, the OIG determined that providers should have used diagnosis codes for other forms of malnutrition, or no malnutrition diagnosis code at all. This resulted in a higher Medicare Severity Diagnosis Related Group (MS-DRG) reimbursed to the hospitals and an estimated $1 billion in overpayments.

Reason for Review

The SMRC was tasked with performing claim review on inpatient claims billed with a severe malnutrition diagnosis (E41 or E43) in accordance with applicable statutory, regulatory, sub-regulatory, and coding guidance.

Common Reasons for Denial

• No response to the documentation request
  • CMS Internet-Only Manuals, Pub 100-08, Medicare Program Integrity Manual, Chapter 3, Section 3.2.3.8 requires providers/suppliers to respond to requests for documentation within 45 calendar days of the additional documentation request. The documentation was not submitted or not submitted timely.
•  Documentation did not support the DRG billed on the claim
  • CMS Internet-Only Manual, Pub 100-08 Medicare Program Integrity Manual, Chapter 3, Section 3.6.2.4, Section 3.6.2.5, Pub 100-04, Medicare Claims Processing Manual, Chapter 23, Pub100-08, Medicare Program Integrity Manual, Chapter 6, Section 6.5.3 (DRG validation). The medical record documentation did not support the DRG billed on the claim; therefore, the DRG was changed.
• Documentation did not support the claim as billed
  • CMS Internet-Only Manual Pub 100-08 Medicare Program Integrity Manual, Chapter 3, Section 3.6.2.4, Pub 100-04 Medicare Claims Processing Manual, Chapter 23. The medical record documentation did not support the severe malnutrition diagnosis code billed and/or did not support the procedure code billed on the claim.

References/Resources

Social Security Act (SSA), Title XVIII

• § 1812 Scope of Benefits.
• § 1815(a) Payment to Providers of Service.
• § 1833(e) Payment of Benefits.
• § 1862(a)(1)(a) Exclusions from Coverage and Medicare as Secondary Payer.
• § 1886 Payment to Hospitals for Inpatient Hospital Services.
• § 1879 Limitation on Liability of Beneficiary Where Medicare Claims are Disallowed.

Title 42 of the Code of Federal Regulations (CFR)

• § 411.15(k)(1) Particular Services Excluded from Coverage.
• § 412.1(a)(1) Scope of Part.
• § 412.2 Basis of Payment.
• § 424.5(a)(6) Basic Conditions.
• § 482.24(c)(1) Condition of Participation: Medical Record Services.

Internet Only Manual (IOM), Medicare Benefit Policy Manual (MBPM), Publication (Pub.) 100-02

• Chapter (Ch.) 1 § 80.3.2.2 Consistency Edits for Institutional Claims.

IOM, Medicare Claims Processing Manual (MCPM), Pub. 100-04

• Ch. 23 § 10.2 Inpatient Claim Diagnosis Reporting.

IOM, Medicare Program Integrity Manual (PIM), Pub. 100-08

• Ch. 3 § 3.2.3.2 Time Frames for Submission.
• Ch. 3 § 3.2.3.8 No Response or Insufficient Response to Additional Documentation Requests.
• Ch. 3 § 3.4.1.3 Diagnosis Code Requirements.
• Ch. 3 § 3.6.2.1 Coverage Determinations.
• Ch. 3 § 3.6.2.4 Coding Determinations.
• Ch. 3 § 3.6.2.5 Denial Types.
• Ch. 6 § 6.5.3 DRG Validation Review.
• Ch. 6 § 6.5.4 Review of Procedures Affecting the DRG.

Last Updated Dec 13, 2022