Office of Inspector General Notes the Increase of Cost for Inpatient Stays

Thoughtware Alert Published: Mar 03, 2021

The Office of Inspector General (OIG) recently published a February data brief stating that a trend of more expensive inpatient admissions has emerged prior to COVID-19 and noting the highest severity levels increased almost 20 percent from fiscal year (FY) 2014 through FY 2019 but the average length of stay (ALOS) for the admissions remained closely the same. It is the OIG’s opinion this trend suggests possible upcoding and/or inappropriate billing practices. The OIG recommended that CMS conduct targeted reviews of MS-DRGs that may be vulnerable to upcoding for the hospitals that frequently bill them. These targeted MS-DRGs will include those with complications or comorbidities (CC) or major complications or comorbidities (MCC).

CMS did not agree with the OIG’s recommendations and cited that “there is more work to be done to determine conclusively which changes in billing are attributable to upcoding.” CMS communicated that the OIG’s findings will be shared with the Recovery Audit Contractors (RAC) so they can use the information to update their strategies for reviewing MS-DRGs.

In the 2021 Inpatient Prospective Payment System final rule published September 18, 2020, CMS created nine “guiding principles” as meaningful indicators of expected resource use by a secondary diagnosis (CC/MCC): 

  • Represents end of life/near death or has reached an advanced stage associated with systemic physiologic decompensation and debility. 
  • Denotes organ system instability or failure. 
  • Involves a chronic illness with susceptibility to exacerbations or abrupt decline. 
  • Serves as a marker for advanced disease states across multiple different comorbid conditions.
  • Reflects systemic impact. 
  • Post-operative condition/complication impacting recovery. 
  • Typically requires higher level of care, i.e., intensive monitoring, greater number of caregivers, additional testing, intensive care unit care, extended length of stay. 
  • Impedes patient cooperation and/or management of care. 
  • Recent (last 10 years) change in best practice or in practice guidelines and review of the extent to which these changes have led to concomitant changes in expected resource use.

Based on the OIG’s findings and potential RAC audits of certain MS-DRGs, organizations should consider taking the following actions: 

  • Ensure clinical documentation integrity (CDI) specialists and coding teams are aware of the above nine guiding principles. 
  • Ensure concurrent CDI and coding physician queries are compliant and contain supporting clinical indicators.
  • Conduct clinical validation assessments to assess whether clinical indicators are documented and treated to support complications and comorbidities.
  • Use clinical validation assessment results to strengthen documentation practices, provide education to clinical and coding teams, and build strong appeal processes.
  • Review your quarterly Program for Evaluating Payment Patterns Electronic Report (PEPPER) for risk monitoring. 
  • Assess your current CDI program to determine if a redesign is needed.
  • Ensure that your CDI program is integrated with your utilization review and case management program. 
  • Be aware of the RAC-approved issues for your geographical area. 

BKD Can Help

A facility should be able to demonstrate strong compliance efforts. BKD’s CDI and coding compliance team can assist you with an assessment of your current CDI program and possible redesign, concurrent and retroactive MS-DRG, and clinical validation assessments to help you demonstrate your strong compliance practices.

For more information, reach out to your BKD Trusted Advisor™ or submit the Contact Us form below.

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