OIG Issues Recommendations for Short Stay Admissions

The OIG conducted an audit to evaluate the effectiveness of Medicare program safeguards to ensure appropriate reimbursement of short stay inpatient admissions.  In general, inpatient admissions which are not expected to last at least two midnights are not considered to be appropriate.  However, an inpatient stay of less than two midnights may be reasonable and necessary when certain exceptions apply including:

  1. Performance of an inpatient only (IPO) procedure
  2. Discharge/transfer due to unforeseen circumstances
  3. Performance of certain procedures (e.g., mechanical ventilation)

Both the CMS and OIG have identified high payment error rates associated with short stay admissions with estimated improper payments in the billions.  The most recent OIG audit findings indicate the current program safeguards are not adequate to prevent and detect improper payments for short stay admissions.

OIG Recommendations to CMS:

  1. Add information to inpatient claims indicating that any stay that did not span two or more midnights due to an unforeseen circumstance (i.e., condition code).
  2. Develop a list ICD-10 procedures codes associated with the HCPCS codes on the inpatient-only procedure list.
  3. Implement prepayment edits for claims for short inpatient stays at risk for noncompliance with the two-midnight rule.
  4. Update policies and procedures for post-payment reviews to focus on claims for short inpatient stays identified as at risk for noncompliance with the two-midnight rule and to focus on overpayment recoveries.

We recommend reviewing the OIG report in its entirety.  We also recommend routine reviews of your short stay inpatient admissions to verify compliance with the current regulations.

The HBE Advisors team is available to assist you with documentation, coding, billing and medical necessity reviews of your short stay admissions.  Based on the findings of those reviews, we can provide appropriate clinical and administrative education as well as policy and process revisions to promote compliance.

The full OIG Report can be found here: https://oig.hhs.gov/documents/audit/9910/A-09-21-03022.pdf

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