Updated on: January 31, 2013

OIG Semiannual Report Notes Potential Overpayments for Outpatient Services

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Original story posted on: November 28, 2011

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Provider errors, unallowable services and insufficient documentation caused Medicare to overpay for outpatient services, according to the Office of Inspector General’s Semiannual Report for April through September.

OIG recommended that contractors implement “system edits to identify line item payments that exceed billed charges” and to use audit results it notes in the report. The reports include six jurisdictions.

·Palmetto GBA (Jurisdiction 1) – Almost 70 percent of the 1,323 selected line items for outpatient services were incorrect and included overpayments of about $7.5 million that had not been returned, OIG stated.

·Noridian Administrative Services (Jurisdiction 2) – Almost 70 percent of the 1,340 selected line items for outpatient services were incorrect and included overpayments of about $6.2 million that had not been returned, OIG stated.

·Noridian Administrative Services (Jurisdiction 3) – Almost 85 percent of the 1,913 selected line items for outpatient services were incorrect and included overpayments of about $5.8 million that had not been returned, OIG stated.

·National Government Services (Jurisdiction 8) – About 68 percent of the 1,407 selected line items for outpatient services were incorrect and included overpayments of about $7 million that had not been returned, OIG stated.

·First Coast Service Options (Jurisdiction 9) – Almost 78 percent of the 326 selected line items for outpatient services were incorrect and included overpayments of about $1.7 million that had not been returned, OIG stated.

·Highmark Medicare Services (Jurisdiction 12) – Almost 57 percent of the 739 selected line items for outpatient services were incorrect and included overpayments of about $532,000 that had not been returned, OIG stated.

For more on the Semiannual Report, visit http://oig.hhs.gov/reports-and-publications/archives/semiannual/2011/fall/HHS-OIG-SAR-Fall2011.pdf.

3 RACs Post New Issues

Region A, B and D recovery auditors posted issues recently. See below for more information.

Inpatient hospital

Name of issue

Date posted or approved

Regions/states where it is active

Description of issue

Document sources

Medical necessity review – MS-DRG 483, major joint-limb reattachment procedures of upper extremity with CC/MCC

11/22/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 607, minor skin disorders without MCC

11/22/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 337, peritoneal adhesiolysis without CC/MCC

11/22/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

 

 

Medical necessity review – MS-DRG 620, OR procedures for obesity with CC

11/22/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 988, nonextensive OR procedure unrelated to principal diagnosis with CC

11/22/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 417, laparoscopic cholecystectomy without C.D.E. with MCC

11/22/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 083, traumatic stupor and coma greater than one hour with CC

11/22/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 909, other OR procedures for injuries without CC/MCC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

 
 

 
 

Medical necessity review – MS-DRG 582, mastectomy for malignancy with CC/MCC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 908, other OR procedure for injuries with CC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 880, acute adjustment reaction and psychosocial dysfunction

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 841, lymphoma and nonacute leukemia with CC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 139, salivary gland procedures

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

 

 

Medical necessity review – MS-DRG 578, skin graft except for skin ulcer or cellulitis without CC/MCC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 478, biopsies of musculoskeletal system and connective tissue with CC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 026, craniotomy and endovascular intracranial procedures with CC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 914, traumatic injury without MCC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 441, disorders of liver except malignancy, cirrhosis, alcoholic hepatitis with MCC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 004, tracheostomy with mechanical ventilation 96+ hours or principal diagnosis except face, mouth and neck without major OR

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

 
 

 
 

Medical necessity review – MS-DRG 907, other OR procedures for injuries with MCC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 133, other ear, nose, mouth and throat OR procedures with CC/MCC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 809, major hematologic-immunologic diagnosis except sickle cell crisis and coagulation with CC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

Medical necessity review – MS-DRG 707, major male pelvic procedures with CC/MCC

11/21/11

Conn., Del., D.C., Maine, Mass., N.H., N.J., N.Y., Pa., R.I., Vt.

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

Sect. 1886(d) of the Social Security Act; CMS Pub. 100-08 chapters 6, 13; CMS Pub. 100-02 chapter 1; CMS Pub. 100-04 chapter 3; Highmark LCD L27548; Medicare inpatient fact sheet; Pepper report; OIG reports A-01-10-0100, OAI-09-88-00880, A-03-00-00007, OAI-05-88-00730

 
 

 

Acute kidney failure

11/18/11

RAC Region B

The MS-DRG validation determines whether the principal diagnosis and all secondary diagnoses identified as CCs and MCCs are actually present, correctly sequenced, coded and clinically validated. When a patient is admitted to the hospital, the condition established after study found to be chiefly responsible for occasioning the admission to the hospital should be sequenced as the principal diagnosis. The other diagnosis identified should represent all (MCC/CC) present during the admission that impact the stay. The POA indicator for all diagnoses reported must be coded correctly. Reviewers will validate MS-DRGs with an acute kidney failure diagnoses that affects the MS-DRG assignment.

CMS Pub. 100-08 chapter 6; 2007 Change Request 5679

Disorders of pituitary gland and hypothalamic control

11/18/11

RAC Region B

The purpose of MS-DRG Validation is to determine that the principal diagnosis and all secondary diagnoses identified as CCs and MCCs are actually present, correctly sequenced, coded and clinically validated. When a patient is admitted to the hospital, the condition established after study found to be chiefly responsible for occasioning the admission to the hospital should be sequenced as the principal diagnosis. The other diagnosis identified should represent all (MCC/CC) present during the admission that impact the stay. The POA indicator for all diagnoses reported must be coded correctly. Reviewers will validate MS-DRGs with a diagnosis of a disorder of pituitary gland and hypothalamic control that affects the MS-DRG assignment.

CMS Pub. 100-08 chapter 6; 2007 Change Request 5679

 
 

 
 

Excisional debridement

11/18/11

RAC Region B

The purpose of MS-DRG Validation is to determine that the principal diagnosis and all secondary diagnoses identified as CCs and MCCs are actually present, correctly sequenced, coded and clinically validated. When a patient is admitted to the hospital, the condition established after study found to be chiefly responsible for occasioning the admission to the hospital should be sequenced as the principal diagnosis. The other diagnosis identified should represent all (MCC/CC) present during the admission that impact the stay. The POA indicator for all diagnoses reported must be coded correctly. Reviewers will validate MS-DRGs with a procedure code of 86.22 and for diagnoses that affect the MS-DRG assignment.

CMS Pub. 100-08 chapter 6; 2007 Change Request 5679

Nutritional disorders

11/17/11

RAC Region B

The purpose of MS-DRG Validation is to determine that the principal diagnosis and all secondary diagnoses identified as CCs and MCCs are actually present, correctly sequenced, coded and clinically validated. When a patient is admitted to the hospital, the condition established after study found to be chiefly responsible for occasioning the admission to the hospital should be sequenced as the principal diagnosis. The other diagnosis identified should represent all (MCC/CC) present during the admission that impact the stay. The POA indicator for all diagnoses reported must be coded correctly. Reviewers will validate MS-DRGs with a nutritional disorder diagnosis that affects the MS-DRG assignment.

CMS Pub. 100-08 chapter 6; 2007 Change Request 5679

 
 
 

Short-term Acute Care Hospital

Name of issue

Date posted or approved

Regions/states where it is active

Description of issue

Document sources

Acute inpatient hospitalization – ventricular shunt procedures with CC (DRG 032)

11/20/11

RAC Region D

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

CMS Pub. 100-02 chapters 1, 6; CMS Pub.100-08 chapter 6

Acute inpatient hospitalization – ventricular shunt procedures with MCC (DRG 031)

11/20/11

RAC Region D

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

CMS Pub. 100-02 chapters 1, 6; CMS Pub.100-08 chapter 6

Acute inpatient hospitalization – ventricular shunt procedures without CC/MCC (DRG 033)

11/20/11

RAC Region D

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

CMS Pub. 100-02 chapters 1, 6; CMS Pub.100-08 chapter 6

Acute inpatient hospitalization – revision of hip or knee replacement with MCC (DRG 466)

11/20/11

RAC Region D

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

CMS Pub. 100-02 chapters 1, 6; CMS Pub.100-08 chapter 6

Acute inpatient hospitalization – amputation for circulatory system disorders except upper limb and toe with MCC (DRG 239)

11/20/11

RAC Region D

Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary.

CMS Pub. 100-02 chapters 1, 6; CMS Pub.100-08 chapter 6

About the Author

Karen Long is the compliance product manager for DecisionHealth and oversees products that relate to fraud and abuse and HIPAA compliance for physician offices and home health agencies, and accreditation compliance for hospitals. In her almost four years at DecisionHealth, Karen also has been the compliance editor and a reporter for Home Health Line, the nation's leading independent authority on home healthcare business, regulation and reimbursement.

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KLong@decisionhealth.com

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