On August 4, 2014, the Department of Justice announced a settlement with Community Health Systems, Inc. (CHS) for $98.15 million to satisfy allegations CHS improperly billed Medicare, Medicaid and Tricare for inpatient admissions that should have been billed as outpatient or observation services. CHS is the largest operator of acute care hospitals in the country, which currently number 206 hospitals in 29 states. The lawsuit specifically alleges that CHS, through corporate policy, encouraged inpatient admissions in order to increase revenue.

The Settlement Agreement, though not indicative of liability, focuses on CHS’s claims that were billed under the following inpatient Medical Severity Diagnostic Related Groups (MS-DRGs):

• MS-DRG 069 – transient ischemia
• MS-DRG 192 – chronic obstructive pulmonary disease without CC/MCC
• MS-DRG 293 – heart failure and shock without CC/MCC
• MS-DRG 310 – cardiac arrhythmia and conduction disorder without CC/MCC
• MS-DRG 312 – syncope and collapse
• MS-DRG 313 – chest pain
• MS-DRG 392 – esophagitis, gastroenterology and miscellaneous digestive disorders without MCC
• MS-DRG 641 – nutritional and miscellaneous metabolic disorders without MCC
• MS-DRG 690 – kidney and urinary tract infections without MC

Payers can monitor inappropriate hospital admissions in a couple of different ways. A payer could monitor the length of stay of inpatient admissions and review those that are less than two days. Medicare’s “Two-Midnight Rule,” promulgated after the service dates of the CHS claims, is a presumption that an inpatient stay spanning at least two midnights is reasonable and necessary.

A payer could also monitor the number and distribution of the DRGs that claims are grouped under and review any appearing to be aberrant. Trending analysis can identify outliers, which upon further investigation could prove to represent improper or fraudulent billing.

Payers can monitor potential fraud, waste and abuse (FWA) scenarios by utilizing Context 4 Healthcare's industry leading FWA tools, including the FWA Module included in Context's FirstPass™ claim editing solution. The process starts with real-time claims analysis during the adjudication cycle while payers are still calculating claim liability. FirstPass™ contains thousands of rules consisting of millions of editing combinations which are designed to identify potential FWA conditions. The FWA Module provides flexible reporting options for FWA claims analysis.

Watch Context's Short Video on FirstPass™

Article Source: http://www.justice.gov/opa/pr/2014/August/14-civ-822.html