Audits and Higher-Weighted DRGs

Certainly, audits are a growing source of concern, but there is no need for panic if you are adequately prepared.

The topic of audits has caused significant discussion of late, and for good reason. It is not uncommon for an organization to resubmit a claim for a higher-weighted (or, even at times, lower-weighted) MS-DRG. Yet if this is common practice for an organization, there may be cause for concern. The Centers for Medicare & Medicaid Services (CMS) has the authority to have amended claims reviewed by a Quality Innovation Network-Quality Improvement Organization (QIN-QIO).

As you know, the principal diagnosis or procedure establishes the DRG. At times, a facility determines that the originally assigned DRG did not appropriately reflect the services provided to the patient. In these instances, a higher-weighted DRG is requested.

Typically, after the Medicare Administrative Contractor (MAC) processes the request, CMS may select it for QIO post-payment review. It is not uncommon for the QIO to target an organization if an outlier is discovered. However, this is not always the case.  There may not be a need for outliers to be found to prompt a review, or even a flat denial.  

Earlier this year, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) came out with a report on concerns about an increase in the reporting of highest-severity DRGs.

As a result of the report’s findings, the OIG has recommended that CMS conduct targeted reviews to identify stays involving patterns of higher-weighted DRGs. 

There have been widespread discussions of the emergence of denials being received from the QIN-QIO, with minimal supplemental information; in some cases, the denial was reportedly simply due to a “QIO audit.” These types of incidences have been raising questions, since typically, a QIO would not be associated or involved with these types of denials. CMS’s Beneficiary and Family Centered-Quality Improvement Organizations (BFCC-QIOs) address quality-of-care concerns and appeals. And typically, the QIN-QIOs focus on best practices for better care. Livanta (the BFCC-QIO) has the contract to review all higher-weighted DRG billing for the entire country at this time.

The healthcare landscape has changed, with the financial impact of the past year being increasingly evident. It may be that contractors are under elevated pressure to recover costs, even when there is less than a tangible pretext. Because of this, facilities must be prepared.

With this focus on higher-weighted DRGs, there certainly is a spotlight on the importance of clear and accurate documentation in the medical record. If a record is targeted for a coding review, it is also reviewed for medical necessity.

Providers would also be well-advised to implement initiatives to perform focused reviews. Coding reviews are a solid course of action for defense, as being proactive can save an organization a great deal of trouble. A pre-bill review process is recommended to help identify areas of risk, such as coding changes, additional conditions that should be coded, and sequencing errors; each of these affects reimbursement. An organization’s Program for Evaluating Payment Patterns Electronic Report (PEPPER) is a helpful tool to reveal undesirable trends.

When working with any type of government review, timeframes are involved. It is also important to ensure that release of information is aware of these reviews, and plan accordingly.

The focus of these reviews places a spotlight on the importance of clear and accurate documentation in the medical record, and the absolute requirements for hospitals to implement training and education for coders – after all, accurate coding is imperative!

Finding a silver lining in all of this, hospitals can see the increase in these types of audits as an opportunity for self-examination and improvements!  


Susan Gatehouse, RHIT, CCS,CPC, AHIMA-Approved ICD-10-CM/PCS Trainer

Susan Gatehouse is the founder and chief executive officer of Axea Solutions. An industry expert in revenue cycle management, Gatehouse established Axea Solutions in 1998, and currently partners with healthcare organizations across the nation, to craft solutions for unique challenges in the dynamic world of healthcare reimbursement and data management.

Related Stories

New Workflow Manages DRG Mismatches

Workflow increases productivity, while proving itself to be successful in reconciling DRG mismatches. When asking many clinical documentation improvement specialists (CDISs) what they dislike most

Read More

Leave a Reply

Your Name(Required)
Your Email(Required)

Featured Webcasts

Implantable Medical Device Credit Reporting for 2023 – What You Need to Know

Learn how to save your facility hundreds of thousands of dollars in repayments and fines by correctly following CMS requirements for implantable medical device credit reporting. We provide you with all the need-to-know protocols, along with the steps for correct compliance while offering best practices to implement a viable strategy in your facility.

January 25, 2023

Trending News