CGI Federal, the CMS Recovery Audit Contractor (RAC) contracted for reviews of Medicare claims in seven states, posted approvals for the review of both Medical Necessity and DRG Validation for new and updated issues including 29 DRGs since Aug. 12. Of the 29 DRGs half are among the top 20 DRGs for US healthcare providers when ranked according to total discharges nationwide for 2009, according to the latest figures published by CMS. The states now under review by CGI are Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio and Wisconsin.

Among the top 20 DRGs for FY2009, 10 made this new list. More importantly, it is now quite likely that half of the top 20 DRGs in any facility are either now or soon will be targets of RAC reviews for medical necessity. And remember they were already likely targets for reviews of physician admission orders, DRG validation and the coding for principal and secondary diagnoses.

The First 29 DRGs Approved for Medical Necessity

Let’s take a more detailed look at the list —the 29 DRGs now posted on the CGI website as approved for review of Medical Necessity are the following:

MS-DRG Description

056 Degenerative Nervous System Disorders w MCC
057 Degenerative Nervous System Disorders w/o MCC
069 Transient Ischemia
190 Chronic Obstructive Pulmonary Disease w MCC
191 Chronic Obstructive Pulmonary Disease w CC
192 Chronic Obstructive Pulmonary Disease w/o CC/MCC
249 Perc Cardiovasc Proc w Non-Drug-Eluting Stent w/o MCC
253 Other Vascular Procedures w CC
254 Other Vascular Procedures w/o CC/MCC
291 Heart Failure & Shock w MCC
292 Heart Failure & Shock w CC
293 Heart Failure & Shock w/o CC/MCC
302 Atherosclerosis w MCC
308 Cardiac Arrhythmia & Conduction Disorders w MCC
312 Syncope & Collapse
313 Chest Pain
314 Other Circulatory System Diagnoses w MCC
315 Other Circulatory System Diagnoses w CC
316 Other Circulatory System Diagnoses w/o CC/MCC
391 Esophagitis, Gastroent & Misc Digest Disorders w MCC
393 Other Digestive System Diagnoses w MCC
551 Medical Back Problems w MCC
552 Medical Back Problems w/o MCC
640 Nutritional & Misc Metabolic Disorders w MCC
682 Renal Failure w MCC
683 Renal Failure w CC
684 Renal Failure w/o CC/MCC
689 Kidney & Urinary Tract Infections w MCC
811 Red Blood Cell Disorders w MCC

DRG Validation Included

All of the above have also been approved for DRG Validation. In fact DRG Validations have been approved for over 75 percent of all DRGs since the RACs began garnering approval for such issues in late 2009. The earliest approvals for so-called “complex reviews” were posted in December 2009 by Connolly Healthcare, the RAC for Region C — a region that includes 17 states in the south and southeastern US.

Complex reviews require a human to review the medical record, as opposed to an “automated review” that can be accomplished with computer software, usually involving more simple true-false comparisons or what CMS likes to call “black-and-white” issues. However, since the first complex reviews were approved for the RACs by CMS the review of medical necessity was specifically excluded for any and all issues.

This was expected

“Given the findings from the RAC Demonstration Project, we always knew medical necessity would be reviewed by the RACs, we just didn’t know when CMS would finally let it loose so to speak,” said Paula Digby, a co-founder of eduTrax and the consulting firm of AlphaQuest, LLC.  “But the time has come just like we knew it would. Now they have full access. First, they can look at admission orders and question whether the physician’s admission order is properly worded and documented. Then they can question the coding to validate the DRG, move the code up or down in the DRG or even move to a different DRG. And now finally they can look at medical necessity, which could affect the admission itself and even lead to a complete denial of the entire claim.”