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Gov’t audit insider: Diagnosis related groups (DRG) payment window

Healthcare Auditing Weekly, September 30, 2003

This Office of Inspector General (OIG) audit examined the relationship between nonphysician outpatient services rendered four to 14 days prior to an inpatient admission, and the date of that subsequent admission.

Objective
The OIG's objective for this review was to estimate the amount and type of preadmission outpatient services related to subsequent inpatient admissions that were separately reimbursed by Medicare.

Scope
The OIG did the following to accomplish its audit objective:

1. Researched and evaluated current law, regulation, and policy on the DRG payment window.

2. Developed computer applications using the Centers for Medicare and Medicaid Services calendar year (CY) 2000 National Claims History file to identify nonphysician outpatient services rendered four to 14 days prior to the date of admission (1,170,520 claims valued at $110 million).

3. Limited the review to outpatient claims that contained one of the following:

·  Diagnostic services only

·  Both diagnostic and nondiagnostic services where the outpatient principle diagnosis code had some correlation to either the inpatient admitting or principal diagnosis code

4. Grouped the total Medicare payments for these outpatient services by DRG.

5. Limited the review to the top 10 DRGs, which accounted for $42 million (292,942 claims) of the outpatient services rendered four to 14 days prior to the date of admission.

Methodology
The OIG used the following methodology:

1. Employed a multistage sampling design. The primary sampling unit consisted of eight states. The secondary sampling unit consisted of 30 claims from each state.

2. Requested each provider to submit documentation (detailed bills, medical records, etc.) of the 240 randomly selected claims.

3. To determine whether the preadmission services were admission-related, the OIG did the following:

·  Asked each provider to confirm whether the preadmission services were related to the subsequent inpatient admission

·  Relied on the correlation of the outpatient principle diagnosis code and the inpatient principal diagnosis code

·  Relied on the correlation of the outpatient principal diagnosis code and the inpatient admitting diagnosis code.

4. Used a variable appraisal program to estimate the dollar value of admission-related services rendered four to 14 days prior to the date of admission.

To read the full audit report, click here.

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