News: OIG audit reveals overpayments to hospitals for mechanical ventilation procedures

A recent audit from the Office of Inspector General (OIG) found that Medicare payments for inpatient claims assigned with MS-DRGs that required more than 96 consecutive hours of mechanical ventilation did not fully comply with Medicare requirements, resulting in overpayments to hospitals.

Inpatient Medicare claims include the start date of mechanical ventilation but not the end date, making it easier for hospitals to overstate the duration of care when a patient did not meet the duration requirement (four or more consecutive days). To identify these types of claims with potential billing errors, CMS implemented an automated process to flag claims where mechanical ventilation started less than four days before the patient’s discharge. Previous audits also assessed overall compliance with the duration requirement and found that hospitals were not meeting the requirement, JustCoding reported.

As a result, the recent audit investigated the claims further to identify potential billing errors in those reporting a mechanical ventilation start date five to 10 days before the patient’s discharge, suggesting that errors may still occur despite a seemingly appropriate ventilation duration. Claims that met the following criteria were included in the audit:

• Had dates of service during the audit period (October 2015 through September 2021)
• Were assigned MS-DRG 207, Respiratory system diagnosis with ventilator support greater than 96 hours, or MS-DRG 870, Septicemia or severe sepsis with mechanical ventilator support greater than 96 hours
• Had a mechanical ventilation start date five to 10 days before discharge date

Out of 83,359 claims, a stratified random sample of 250 claims were selected, totaling $11 million in payments. Seventeen of the sampled claims were found to have been assigned incorrectly to MS-DRG 207 or 870 due to incorrectly assigned procedure or diagnosis codes, resulting in $382,032 in overpayments. Based on the sample results, it is estimated that Medicare improperly paid hospitals $79.4 million during the audit period.

In the report, OIG provided two recommendations for CMS to address the overpayments:

• Direct Medicare administrative contractors to recover from hospitals the portion of the $382,032 in identified overpayments that are within the four-year reopening period in accordance with CMS’s policies and procedures
• Educate hospitals on correctly counting the hours of mechanical ventilation and submitting claims with correct procedure and diagnosis codes

CMS agreed with both recommendations and planned to take action to address them.

Editor’s note: This article first appeared in JustCoding. To read the OIG audit, click here.