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OIG Identifies $54 Million Overpayment Related to Incorrect Reporting of Discharge Status

OIG Identifies $54 Million Overpayment Related to Incorrect Reporting of Discharge Status November 12, 2019

Last week, the OIG released a report detailing their findings of an audit targeting compliance with Medicare’s post-acute-care transfer policy.  Under the Medicare policy, certain DRG payments (transfer DRGs) are reduced when a patient is transferred from inpatient status to specified types of post-acute care providers, including skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRF) and home health agencies (HHA).  However, a hospital may receive full payment for a transfer DRG when the patient is discharged to home. 

Incorrect reporting of hospital discharge status has been the focus of numerous audits historically.  The OIG’s prior post-acute-care transfer audits identified over $200 million in overpayments.  The most recent OIG audit included 18,647 claims with dates of service January 1, 2016 through December 31, 2018.  The reviewed claims were reported with the discharge status of “home” and were reimbursed under a transfer DRG.  The OIG found a 100% error rate totaling $54,372,337.00.  Of the 18,647 claims reviewed with the reported discharge status of home, the OIG determined the discharge status should have been correctly reported as follows:

With overpayments related to incorrect reporting of discharge status approaching $300 million dollars, it is clear hospitals need to strengthen their processes and improve accuracy.  The HBE team is ready to assist you with pro-active reviews to validate the accuracy of your discharge reporting and appropriateness of your DRG payments.  We are also available to offer assistance with your policies and procedures related to post-acute-care transfers and discharge status coding.  Additionally, we offer customized education and training for your staff.

The full OIG report can be found at: https://oig.hhs.gov/oas/reports/region9/91903007.pdf

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