News Alert: OIG Poised to Conduct DRG Validation Audits

OIG discusses plans in 2018 Work Plan update

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced on Thursday that the agency, along with the Centers for Medicare & Medicaid Services (CMS), has noted “problems” with upcoding in hospital billing to increase payment. As a result, the OIG plans to collect data to see how coding by providers has changed over time and then use the results of that analysis to perform medical reviews on certain hospitals and/or codes.

As with many OIG targets, this description is rather vague, but it appears that they are concerned about an increasing number of inpatient admissions billed with a high-weighted diagnosis-related group (DRG) or with a complication or comorbidity (CC) or major complication or comorbidity (MCC), which increase the DRG weight and therefore, payments. The agency gave no indication if this was a general trend or related to specific diagnoses.

A Medicare regulation expert who spoke to RACmonitor on the condition of anonymity suspects that the OIG has noticed increases in diagnoses such as acute respiratory failure, malnutrition, and acute kidney injury. The increase in the number of admissions for sepsis also may have raised some red flags.

“But this trend is not new,” the source told RACmonitor. “The increase in clinical documentation integrity (CDI) programs has led to an increase in the documentation of these diagnoses in the medical record. The real problem is that these diagnoses were dramatically underreported for many, many years, even though they were present, because of the lack of codable documentation.”

“If the OIG were to go back several years and look for evidence of undercoding, such an analysis would likely reveal that current rates of these are actually the correct rate, and hospitals have been underpaid for years,” the source added. “But that won’t happen.”

The OIG notes that its report will be available in 2020.