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

Noridian Healthcare Solutions, LLC, as the Supplemental Medical Review Contractor (SMRC) for the CMS, is conducting post-payment reviews of Medicare Part A acute care inpatient hospital claims billed on dates of service from April 1, 2020 through August 30, 2020. This notification includes the reasons for the review, documentation that will be requested in the Additional Documentation Request (ADR) letter, and resources providers/suppliers may wish to consult when submitting claims.


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 will be identified by the presence of appropriate International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) diagnosis codes. 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 will complete medical record review on a small sample of claims related to the add-on payment for COVID-19. Noridian will conduct reviews in accordance with applicable statutory, regulatory, sub-regulatory and coding guidance.

Claim Sample Detail

11X U07.1 (COVID-19)

Access related project details below.

Documentation Requirements

Below is a list of specific documentation requirements that will be included in each ADR to obtain the necessary documentation to perform the review. Documentation requested has been made specific to assist the provider in collecting and submitting pertinent information to decrease provider burden.

  1. Medical notes to support the billed service, including, but not limited to:
    1. Admission notes
    2. History and Physical
    3. Progress notes
    4. Discharge summary
    5. Consultations, if applicable
  2. Full detailed itemization of services, including diagnosis codes and procedures performed
  3. Medical record documentation to support the utilization of the diagnosis code, “U07.1 COVID-19”
  4. Lab/Diagnostic reports, if applicable, including any that support the COVID-19 diagnosis.
  5. Legible handwritten physician and/or clinician signatures
    1. Signature attestation and/or a signature log should be submitted when physician or clinician signatures are illegible.
  6. Valid electronic physician and/or clinician signatures
  7. Advance Beneficiary Notice of Noncoverage (ABN), if applicable
  8. Any additional documentation to support the service(s) billed


  • 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 Diagnosis Code Requirements.
  • CMS IOM, Publication 100-08, MPIM, Chapter 3, Section Coverage Determinations.
  • CMS IOM, Publication 100-08, MPIM, Chapter 3, Section Coding Determinations.
  • CMS IOM, Publication 100-08, MPIM, Chapter 3, Section 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 Oct 15, 2020