Inadequate Edits and Oversight Caused Medicare To Overpay More Than $267 Million for Hospital Inpatient Claims With Post-Acute-Care Transfers to Home Health Services

Submitting OIG:

Department of Health & Human Services OIG

Report Description:

Prior OIG audits identified Medicare overpayments to hospitals that did not comply with Medicare's post-acute-care transfer policy (transfer policy). CMS generally concurred with our recommendations, but subsequent analysis that we conducted indicated that CMS's system edits were still not properly designed and that hospitals may be using condition codes to bypass CMS's system edits to receive higher reimbursements for inpatients transferred to home health services.

Date Issued:

Wednesday, August 5, 2020

Agency Reviewed / Investigated:

Department of Health & Human Services

Submitting OIG-Specific Report Number:

A-04-18-04067

Component, if applicable:

Centers for Medicare & Medicaid Services

Location(s):

Agency-Wide

Type of Report:

Audit

Questioned Costs:

$722,288

Funds for Better Use:

$266,356,313

Number of Recommendations:

View Document:

Attachment	Size
A-04-18-04067.pdf	2.76 MB

Additional Details Link:

https://oig.hhs.gov/oas/reports/region4/41804067.asp

Recommendation Number	Recommendation Status	Significant Recommendation
269164	Open	No
We recommended that CMS direct its Medicare contractors to reprocess the remaining inpatient claims identified in our sample frame with an incorrect patient discharge status code when beneficiaries resumed home health services within 3 days of discharge and recover the portion of the estimated $218,538,919 in overpayments that are within the 4-year reopening period along with similarly coded inpatient claims after our audit period.
269166	Open	No
We recommended that CMS direct its Medicare contractors to analyze the remaining inpatient claims in our sample frame with a condition code 42, determine which claims were overpaid, and recover the portion of the estimated $40,610,333 in potential overpayments that are within the 4-year reopening period along with similarly coded inpatient claims paid after our audit period.
269167	Open	No
We recommended that CMS correct its CWF edits to ensure that the edits use the home health services on each line within a home health claim rather than only the first line, which will allow the edits to capture home health claims that overlap a hospital stay.
269168	Open	No
We recommended that CMS create CWF edits to prevent the use of condition code 43 from allowing the hospital to receive the full MS-DRG payment when the beneficiary receives home health services within 3 days of discharge.
269170	Open	No
We recommended that CMS use data analytics to identify hospitals that disproportionately use condition code 42 when the diagnosis codes on the inpatient claim and the respective home health claim appear related.
269171	Open	No
We recommended that CMS consider reducing the need for clinical judgment when processing claims under the post-acute-care transfer policy by taking the necessary actions, including seeking legislative authority if necessary, to deem any home health service within 3 days of discharge to be “related” (which would have saved an estimated $46.6 million during our 2-year audit period).

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

269164

Open

We recommended that CMS direct its Medicare contractors to reprocess the remaining inpatient claims identified in our sample frame with an incorrect patient discharge status code when beneficiaries resumed home health services within 3 days of discharge and recover the portion of the estimated $218,538,919 in overpayments that are within the 4-year reopening period along with similarly coded inpatient claims after our audit period.

269166

Open

We recommended that CMS direct its Medicare contractors to analyze the remaining inpatient claims in our sample frame with a condition code 42, determine which claims were overpaid, and recover the portion of the estimated $40,610,333 in potential overpayments that are within the 4-year reopening period along with similarly coded inpatient claims paid after our audit period.

269167

Open