OIG determines Medicare improperly paid over $79 million for mechanical ventilation claims

CMS improperly paid hospitals $79.4 million for mechanical ventilation claims between October 2015 and September 2021, according to a recent audit report from the Office of Inspector General (OIG).

After identifying certain compliance issues through previous audits, the OIG set out to evaluate whether Medicare payments to hospitals for inpatient claims with specific Medicare Severity Diagnosis-Related Groups (MS-DRG) for mechanical ventilation complied with Medicare requirements.

The OIG selected a stratified random sample of 250 claims with payments totaling approximately $11 million. The claims were assigned to MS-DRGs 207 or 870 and had a potential procedure length of five to 10 days.

Out of the 250 sampled claims, 17 did not comply with Medicare requirements and were incorrectly assigned to MS-DRGs 207 or 870, resulting in $382,032 in overpayments.

For eight of the noncompliant claims, hospitals incorrectly used ICD-10-PCS code 5A1955Z, which is used to report more than 96 consecutive hours of mechanical ventilation, when the patient had not received that many hours. This caused a total of $235,315 in overpayments, according to the OIG.

For example, the documentation for one of these noncompliant claims indicated that the patient had received 94 consecutive hours of mechanical ventilation. The hospital used 5A1955Z when it should have used ICD-10-PCS code 5A1945Z (respiratory ventilation, 24-96 consecutive hours). This caused the claim to be incorrectly assigned to MS-DRG 870 rather than 871, according to the OIG.

For the other nine noncompliant claims, hospitals received a total of $146,717 in overpayments due to their use of incorrect diagnosis codes or procedure codes not related to mechanical ventilation. The nine claims were ultimately incorrectly assigned to MS-DRGs 207 or 870.

For example, one claim reported ICD-10-CM code J96.00 (acute respiratory failure, unspecified whether hypoxia or hypercapnia) when it should have reported ICD-10-CM code I12.0 (hypertensive chronic kidney disease with stage 5 chronic kidney disease or end-stage renal disease). The claim was incorrectly assigned to MS-DRG 207 rather than 682.

Based on its findings, the OIG estimated that Medicare improperly paid hospitals $79.4 million for all mechanical ventilation claims over the course of the audit period.

The OIG recommended for CMS to direct Medicare Administrative Contractors to recover the identified overpayments in the report, as well as educate hospitals on correct coding and hour-counting practices for mechanical ventilation.

Revenue integrity professionals should review proper coding and documentation practices for mechanical ventilation to ensure their organization is in compliance.