August 2020 Volume 8 Issue 13
Providing Current Information on

Health Insurance Industry Issues and Legislation

Hospital Upcoding and Overbilling Cost Medicare $1 Billion
A just completed audit of Medicare claims by Office of the Inspector General (OIG)
found that 86.5% claims reviewed were incorrectly billed. Of the 200 randomly
selected claims for malnutrition dating from October 2015 through September 2017,
173 were improperly coded under Medicare's billing requirements. 164 of the claims
the hospitals submitted used the "severe" malnutrition diagnosis code rather than
codes for other forms of malnutrition or contained a malnutrition diagnosis that should
not have been included at all. OIG determined that CMS had overpaid the hospitals
$914,128 or an average of 5,284 per claim on the audited claims. Based on their audit,
OIG estimated the government overpaid hospitals $1 billon over the 2 year period.
Catching Costly Upcoding
In response to the OIG report, CMS implemented fraud prevention systems to
identify DRG upcoding and minimize assignment of inaccurate procedure or
diagnostic codes to increase reimbursement. Two mechanisms exist for commercial
insurers to identify and correct improper hospital billing practices. Claim Level
DRG Validations determine if the DRG is consistent with diagnostic and procedures
codes on the claim. Medical Record Level DRG Validations, conducted by certified
coders, consist of a review of the medical record to determine the correct
procedure and diagnostic codes and the resulting DRG for the services provided.
HHC Group offers both Claim and Medical Record Level DRG Validations and does
so at a very reasonable price.
Congress Ready to Punt on Surprise Billing Again
Surprise billing protections are unlikely to be addressed in upcoming COVID-19 rescue
legislation. While there is bipartisan agreement that something has to done about
surprise billing, powerful competing health industry interests and their congressional
champions have created gridlock regarding any meaningful legislation at this time.
Additionally, health experts believe that lawmakers may be wary of doing anything that
would adversely impact hospitals' and physicians' already stressed finances during the
current pandemic. Consequently, Surprise billing legislation will probably have to wait
until at least the beginning of next year.
Don't Blame High Deductible Health Plans for Rising Healthcare Costs
Healthcare spending by families at large employers has increased twice as fast as
workers' wages in the last 10 years and the cost of healthcare for a typical American
family of 4 covered by an employer sponsored PPO plan rose to $28,166 in 2018. Some
blame High deductible health plans, but they are a response to, rather than the cause
of, ever increasing healthcare costs. Major causes include; reduced competition due to
provider consolidation, increases in prescription drug cost and bills for out-of-network
services at in network facilities. Changes that could slow the upward healthcare cost
spiral are available but have yet to be implemented.
Three Star Preferred Provider Program Additions
Active Care Physical Therapy PC
New York, New York 10018

Medlabs Diagnostics
Cedar Knolls, NJ 07927

City of Delray Beach Fire and Rescue
Delray Beach, FL 33444

Alljoy Medical
Indianapolis, IN 46237