Medicare Improperly Billed $96 Million for Mechanical Ventilation
The Department of Health and Human Services Office of Inspector General (HHS-OIG) has found that hospitals have been improperly billing Medicare for enrollees who received mechanical ventilation, resulting in Medicare improperly paying out an estimated $79.4 million.
HHS-OIG conducted the audit to determine whether Medicare payments to hospitals for inpatient claims for patients with certain Medicare Severity Diagnosis-Related Groups (MS-DRGs) that required more than 96 hours of mechanical ventilation complied with Medicare requirements. Previous OIG audits suggest that hospitals were not complying with Medicare requirements.
Inpatient claims include the date that mechanical ventilation commenced, but do not include an end date. The Centers for Medicare and Medicaid Services (CMS) implemented an automated system to identify claims where the start date for ventilation was 4 days or fewer before the discharge date. This audit was conducted on 83,359 inpatient claims between October 2015 and September 2021 that were assigned MS-DRGs 207 or 870 which also included a mechanical ventilation start date from 5-10 days before the discharge date. Those claims covered $3.6 billion in payments.
HHS-OIG selected a stratified sample of 250 claims, totaling $11 million in payments. HHS-OIG found that hospitals complied with Medicare requirements for 233 of the 250 sampled claims; however, 17 of the sampled claims had been incorrectly assigned MS-DRGs 207 or 870, resulting in $382,032 of overpayments. If the audited sample is indicative of the total sample, HHS-OIG estimates that $79.4 million has been improperly paid.
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The hospitals concerned confirmed that in these cases, the improper procedure or diagnosis code was used and attributed the overpayment to either improper billing, incorrectly counting the mechanical ventilation hours, or clerical errors when selecting procedure and diagnosis codes. HHS-OIG has recommended the CMS instruct Medicare Administrative Contractors (MACs) to recover the overpayments and educate hospitals on correctly counting mechanical ventilation hours and the importance of submitting claims with correct procedure and diagnosis codes. The CMS concurred with the recommendations and has agreed to implement them.
