Note from the ACDIS Director: Getting CMS’ ear on malnutrition

CDI Strategies - Volume 15, Issue 32

by Brian Murphy

Few diagnoses seem to be under the microscope so intensely as severe malnutrition. A year ago, the Office of Inspector General (OIG) released the report “Hospitals Overbilled Medicare $1 Billion by Incorrectly Assigning Severe Malnutrition Diagnosis Codes to Inpatient Hospital Claims.” (What a headline!) In it, the OIG describes an audit of about 225,000 claims, representing $3.4 billion in Medicare payments, within the discharge date of fiscal year 2016-2017. These claims contained a severe malnutrition diagnosis code which was the only MCC. The audit consisted of a random sample of 200 claims with payments totaling $2.9 million. A subcontractor for the OIG performed both medical and coding reviews to determine whether the services were medically necessary and properly coded.

According to the OIG, audit findings demonstrated that hospitals correctly billed Medicare for severe malnutrition diagnosis codes for only 27 of the 200 claims that it reviewed—the other 173 claims were therefore incorrect, per the OIG. For nine of these incorrect claims, the medical record documentation supported a secondary diagnosis code other than severe malnutrition, but the error did not change the DRG or payment. The remaining 164 claims demonstrated that hospitals used severe malnutrition diagnosis codes when they should have used codes for other forms of malnutrition or no malnutrition diagnosis code at all.

On the basis of these sample audit results, which resulted in net overpayments of $914,128, the OIG estimated that hospitals received a staggering overpayment of $1 billion for FYs 2016 and 2017, using its dreaded extrapolation estimate. We covered this topic in detail on an August 2020 ACDIS Podcast in which we hosted the OIG.

Very heavy stuff, and of course, very concerning. But are hospitals actually overreporting this diagnosis? I believe the short answer is no. Malnutrition among hospitalized patients remains a serious issue, affecting more than 30% of hospitalized patients in the United States, per studies cited by the Agency for Healthcare Research and Quality. Per the same study malnutrition is associated with high mortality and morbidity, functional decline, prolonged hospital stays, and increased healthcare costs. Patients with this diagnosis get readmitted at a rate some 50% higher compared to patients with no associated malnutrition.

In short, it behooves hospitals to be rigorous with reporting, even when the OIG is watching and CMS auditors apply arbitrary criteria (Anecdotally, I heard of one auditor who denies any claim in which the patient has a BMI of 16 or above.).

Now, are there some instances where hospitals are upcoding, or more commonly, reporting severe malnutrition without sufficient documented clinical indicators? Of course. Due to a few bad actors, audits and auditors will always be needed. But I believe these instances are a small minority.

Sharing a similar belief, based on their decades of clinical practice and expertise, are the folks over at the American Society for Parenteral and Enteral Nutrition (ASPEN). Behind the scenes, this group along with representatives from the Academy of Nutrition and Dietetics (Academy), the American Society of Nutrition (ASN), and I’m proud to say, ACDIS, met with members of the CMS Provider Compliance Division (CPD in December 2020 to express concerns about improper denials and the lack of transparency around criteria used by auditors in reviewing severe malnutrition claims.

As a follow up to that December meeting, task force members, in June of this year, participated in a “listening session” with CMS-CPI members along with members of the Supplemental Medical Review Contractor who will be conducting the post OIG report supplemental review. In this session, task force members shared and expanded on the following key points, among others:

  • Misuse of antiquated malnutrition diagnostic approaches by CMS contractors (visceral proteins) as malnutrition indicators.
  • Misapplication of current approaches that do have validity by CMS contractors – the requirement of a low body mass index in addition to standard nutrition assessment methodologies.
  • Recommended use of the Academy/ASPEN malnutrition diagnostic methodology – based on well-known indicators reflecting nutrition issues and related to negative outcomes. Most hospitals in the US are using this approach with increasing evidence demonstrating its validity.
  • According to the CMS 2014 Final Rule on Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction, the dietitian is the most qualified to provide this assessment, and the application of the expertise and time of a dietitian to provide an assessment should be sufficient for reporting the diagnosis.  The dietitian works closely with the provider to assure alignment of the malnutrition diagnosis and that it is documented correctly in the electronic health record.
  • Malnutrition treatment should begin with the least invasive method and include a stepwise approach for escalation. Treatment as prescribed by the dietitian or provider should be sufficient for reporting, which may vary from adjustment of oral diets to more aggressive nutrition interventions, such as enteral or parenteral nutrition.

This group also provided a set of recommendations, as follows:

It is important for hospitals to continue to ensure a sound process is in place in light of the nationwide audit that CMS is planning. Our message to CMS and practitioners remains the same.  These include:

  • A multidisciplinary team approach for care
  • Application of a uniform set of criteria
  • Collaboration between dietitians, providers, clinical documentation integrity specialists, and coding specialists to ensure continuity of clinical care, documentation, and coding
  • Documentation of the condition with appropriate specificity along with the criteria used for the diagnosis.

How much CMS and its contractors actually listened during this listening session remains to be seen, but the fact that we now have an ear is a sign of great progress. CMS is hearing directly from clinical experts at the ASPEN/Academy/ASN, and documentation and coding experts at ACDIS.

Needless to say, this group is doing great work to fight against arbitrary denials, and I’m proud ACDIS is part of it.

Editor’s Note: Murphy is the director ACDIS. Contact him at

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Clinical & Coding

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