OIG Releases Report: IP Hospital Severity Levels Under Scrutiny (February 2021)

The Office of Inspector General (OIG) released a report on the concerns surrounding inpatient hospital stays with high levels of severity between 2014-2019. There was a reported 20 % increase found in the DRG (Diagnostic Related Group) severity levels, which are the most expensive and costly. The report was titled: “Trend Toward More Expensive Inpatient Hospital Stays in Medicare Emerged Before COVID-19 and Warrants Further Scrutiny” and is OIG report number OEI-02-18-00380.

You can review the OIG summary report at: Trend Toward More Expensive Inpatient Hospital Stays in Medicare Emerged Before COVID-19 and Warrants Further Scrutiny, OEI-02-18-00380. (hhs.gov)

 Per this OIG report:

Hospitals are increasingly billing for inpatient stays at the highest severity level, which is the most expensive one. The number of stays at the highest severity level increased almost 20 percent from Fiscal Year 2014 through Fiscal Year 2019, ultimately accounting for nearly half of all Medicare spending on inpatient hospital stays. The number of stays billed at each of the other severity levels decreased. At the same time, the average length of stay decreased for stays at the highest severity level, while the average length of all stays remained largely the same.

Inpatient hospital stays are classified into Medicare-Severity Diagnostic Related Groups or MS-DRGs. There were 731 MS-DRGs for FY2019, within the Inpatient Prospective Payment System (IPPS). In order to calculate and group severity, there are four primary MS-DRG severity levels described in the OIG report:

  1. High: At least one secondary diagnosis that is considered a major complication.
  2. Medium: At least one secondary diagnosis that is considered a minor complication.
  3. Low: No secondary diagnosis that is considered a complication.
  4. Other: Some MS-DRGs are not divided by severity level.

The highest payment (reimbursement) to hospitals for inpatient stays are those with a major complication or comorbidity; for HIM Coding and CDI we know this as MCCs.

The OIG specifically calls out in the report MS-DRG 871 Septicemia or Severe Sepsis without MV 96 hours with MCC for FY19. The “MV” represents mechanical ventilation in this title. For MS-DRG 871 Medicare paid $7.4 billion in FY19 per the OIG.

Another interesting OIG finding was that the length of stay (LOS) had decreased from FY14-FY19 for the more severe level of DRGs. Usually, a higher severity level will correlate to a longer hospital inpatient LOS.

The OIG does recommend that the Centers for Medicare & Medicaid Services (CMS) conduct targeted reviews of MS-DRGs and stays that are vulnerable to upcoding, as well as the hospitals that frequently bill them. For HIM Coding and CDI professionals when we hear or see the words “vulnerable to upcoding”, red flags go up and it is an alarm bell for hospital providers to be very proactive rather than reactive with their auditing as well as documentation and coding education activities.

Now is the time to check on your 2021 coding audit plans and include inpatient MS-DRGs with the highest severity levels.

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