News: Coding kwashiorkor resulted in more than six million in overpayments, OIG says

Upon reviewing 2,145 inpatient claims at 25 providers, the Office of Inspector General (OIG) found that all but one claim incorrectly included the diagnosis code for kwashiorkor. This resulted in overpayments in excess of $6 million, according to the OIG report.

The diagnosis of kwashiorkor has been included in the OIG’s Work Plan for several years now. Kwashiorkor is a severe protein malnutrition which typically only affects children in periods of famine and is rarely seen in the United States. Yet, the diagnosis continues to show up on hospital claims.

This time around, the ICD-9-CM coding classification, according to the OIG, may be to blame. The classification contained a discrepancy between the Tabular List and the Alphabetic Index on the use of diagnosis code 260. In the Index, four other malnutrition diagnoses corresponded to diagnosis code 260, but in the Tabular List, code 260 was only for kwashiorkor.

CMS did not have adequate policies and procedures in place to address the discrepancy, the OIG said, which resulted in a total potential loss of approximately $102 million during calendar years 2006-2014. According to the OIG, CMS was aware of the issue, but failed to take action to address it.

The OIG recommended that CMS take two actions in light of their findings:

1. Review provider Medicare claims to ensure that the diagnosis code for kwashiorkor is being used correctly by providers
2. Formalize procedures for notifying providers of the correct way to bill diagnosis codes when there is a discrepancy in the coding classification between the Index and the Tabular List

In response, CMS concurred with the OIG recommendations and requested this year that the American Hospital Association (AHA) publish additional coding guidance on the use of the kwashiorkor diagnosis code. To read about the AHA’s advice in Coding Clinic, Third Quarter 2017, click here.

The OIG also recommended to the 25 reviewed hospitals that they refund the overpayments and strengthen controls to ensure full compliance with Medicare’s billing requirements. In response, the 25 hospitals repaid $5.7 million in overpayments and have ceased incorrectly using diagnosis code 260.

Editor’s note: To read the full OIG report, click here. To read the summary report, click here. ACDIS also provides a variety of resources regarding malnutrition, including queries, ACDIS Radio episodes, and the free 2017 CDI Week webinar on clinical validation, which includes a section about malnutrition.