01-043 DRG COVID 20% Add On Payment Findings of Medical Review

Noridian Healthcare Solutions, LLC, as the Supplemental Medical Review Contractor (SMRC) for the CMS, has conducted post-payment review of claims for Medicare Part A acute care inpatient hospital claims billed on dates of service from April 1, 2020 through August 30, 2020. Below are the review results:

Project ID Project Title Denial Rate for Claims Reviewed
01-043 DRG COVID 20% Add On Payment 1%

Background

Medicare Severity Diagnosis Related Group (MS-DRG) is a system used to classify various diagnoses and procedures for acute care inpatient hospital stays so Medicare can accurately reimburse the hospital under the Inpatient Prospective Payment System (IPPS). In response to the declaration of the COVID-19 outbreak as a Public Health Emergency (PHE), the Coronavirus Aid, Relief, and Economic Security (CARES) Act (Public Law 116-136), was enacted on March 27, 2020. Section 3710 of the CARES Act directs the Secretary to increase the weighting factor of the assigned Diagnosis-Related Group (DRG) by 20 percent for an individual diagnosed with COVID-19 discharged during the COVID-19 PHE period. Discharges of an individual diagnosed with COVID-19 were identified by the presence of appropriate International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) diagnosis code U07.1. Notably, in August of 2020, the Office of Inspector General (OIG) placed an “Audit of Medicare Payments for Inpatient Discharges Billed by Hospitals for Beneficiaries Diagnosed With COVID-19” on its active work plan.

Reason for Review

CMS tasked Noridian, as the SMRC, to perform data analysis and conduct medical review on Medicare Part A acute care inpatient hospital claims. Noridian completed medical record review on a small sample of claims related to the add-on payment for COVID-19. Noridian conducted reviews in accordance with applicable statutory, regulatory, sub-regulatory and coding guidance.

Common Reasons for Denial

  • The documentation does not support the diagnosis code billed
    • CMS Internet-Only Manual, Publication 100-08, Medicare Program Integrity Manual, Chapter 3, Sections 3.6.2.4 and 3.6.2.5 provide guidance on decisions made during review. Specifically, section 3.6.2.4 provides guidance on coding determinations and section 3.6.2.5 provides instructions on selecting denial types. Publication 100-04, Medicare Claims Processing Manual, Chapter 23 requires providers to complete claims accurately so that Medicare contractors may process the claim correctly.
  • The claim was changed to reflect the actual service provided
    • CMS Internet-Only Manual, Publication 100-08, Medicare Program Integrity Manual, Chapter 3, Sections 3.6.2.4 and 3.6.2.5 provide guidance on decisions made during review. Specifically, section 3.6.2.4 provides guidance on coding determinations and section 3.6.2.5 provides instructions on selecting denial types. Publication 100-04, Medicare Claims Processing Manual, Chapter 23 requires providers to complete claims accurately so that Medicare contractors may process the claim correctly.

References/Resources

  • Social Security Act (SSA) Title XVIII, Section 1812. Scope of Benefits.
  • SSA Title XVIII, Section 1815(a). Providers must furnish information.
  • SSA Title XVIII, Section 1862(a)(1)(a). Exclusions from Coverage and Medicare as Secondary Payer.
  • SSA Title XVIII, Section 1886. Payment to Hospitals for Inpatient Hospital Services.
  • SSA Title XVIII, Section 1879. Limitation on Liability of Beneficiary Where Medicare Claims are Disallowed.
  • Code of Federal Regulations (CRF) Title 42, Section 412.1(a)(1). Scope of Part.
  • CFR Title 42, Section 412.2. Basis of payment.
  • CFR Title 42, Section 424.5(a)(6). Basic conditions.
  • CMS Internet Only Manual (IOM), Publication 100-04, Medicare Claims Processing Manual (MCPM), Chapter 23, Section 10.2. Inpatient Claim Diagnosis Reporting.
  • CMS IOM, Publication 100-08, Medicare Program Integrity Manual (MPIM), Chapter 3, Section 3.4.1.3. Diagnosis Code Requirements.
  • CMS IOM, Publication 100-08, MPIM, Chapter 3, Section 3.6.2.1. Coverage Determinations.
  • CMS IOM, Publication 100-08, MPIM, Chapter 3, Section 3.6.2.4. Coding Determinations.
  • CMS IOM, Publication 100-08, MPIM, Chapter 3, Section 3.6.2.5. Denial Types.
  • CMS IOM, Publication 100-08, MPIM, Chapter 6, Section 6.5.3. DRG Validation Review.
  • CMS IOM, Publication 100-08, MPIM, Chapter 6, Section 6.5.4. Review of Procedures Affecting the DRG.
  • United States Government Publishing Office. Coronavirus Aid, Relief, and Economic Security Act. Section 3710. Medicare Hospital Inpatient Prospective Payment System Add-On Payment For COVID–19 Patients During Emergency Period.
  • International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM). Official Coding and Reporting Guidelines, April 1, 2020 through September 30, 2020. Chapter 1: Certain Infectious and Parasitic Diseases (A00-B99).
  • The Centers for Medicare and Medicaid Services (CMS). Medical Learning Network (MLN) New Waivers for Inpatient Prospective Payment System (IPPS) Hospitals, Long-Term Care Hospitals (LTCHs), and Inpatient Rehabilitation Facilities (IRFs) due to Provisions of the CARES Act.

Last Updated Nov 4, 2021