News: OIG says Michigan Health System incorrectly billed high-severity MS-DRGs

An Office of Inspector General (OIG) audit of the University of Michigan Health System revealed noncompliance with four types of inpatient claims, including those associated with the billing of high-severity-level MS-DRGs, JustCoding reported.

In its audit of the health system, the OIG selected a sample of 181 claims from 2014 and 2015, 139 of which were inpatient. Sixty-five of the 181 claims did not comply with Medicare billing requirements, which resulted in more than $1.2 million in overpayments. Based on the sample of both inpatient and outpatient claims, the OIG estimated that the health system received more than $6.1 million in overpayments, according to JustCoding.

Inpatient claim errors included the following:

• Incorrectly billing high-severity DRGs, resulting in overpayments of $137,481. This type of error was also attributed to miscommunication between staff members coding the claims and those who performed the services.
• Incorrectly billing claims paid in excess of charges, resulting in overpayments of $533,450. When claims are paid in excess of charges, they are often assigned the incorrect DRGs, procedures, units, or charges. Due to miscommunication between staff members who coded the services and those who performed the services, the health system assigned the incorrect DRG to some claims.
• Incorrectly billing for inpatient rehabilitation services, resulting in overpayments of $588,008. The health system incorrectly billed Medicare Part A for stays that did not meet the level of care requirements for rehabilitation facilities. Medical record documentation failed to support the need for care provided by inpatient rehabilitation facilities.

As a result of the audit, the OIG recommended that University of Michigan Health System refund Medicare more than $6.1 million, identify and return similar overpayments outside the audit period, and strengthen controls, reported JustCoding. The health system agreed with all OIG recommendations and most findings with the exception of some related to billing for inpatient rehabilitation facilities.

Editor’s note: This article originally appeared in JustCoding. To learn about using the OIG’s Work Plan to focus your CDI efforts, click here.