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OIG Data Brief: Data Indicates Stays Vulnerable to Inappropriate Billing Practices

Published on 

Tuesday, March 9, 2021

I was first introduced to the concept of Clinical Documentation Improvement (CDI) in 1998. Fast forward to 2021 to CDI now being an acronym for Clinical Documentation Integrity (CDI). Put simply, CDI is a collaboration between Physicians, CDI Specialists, and Coding Professionals with an end goal of accurately telling the patient’s story. On the Physicians end, the story is told through what he or she documents in the medical record. The CDI Specialist works as a bridge between the Physician and the Coding Professional who interprets documentation and tells the story through codes (ICD-10-CM, ICD-10-PCS, CPT, etc.).

On February 24, 2021, the OIG released a Data Brief titled Trend Toward More Expensive Inpatient Hospital Stays in Medicare Emerged Before COVID-19 and Warrants Further Scrutiny. Hospitals and more specifically Physicians, CDI Specialists and Coding professionals should be aware that the OIG is calling into question the story that is being told about patient hospitalizations across the country. This is evident by the Data Brief’s three takeaways:  

  • Hospitals increasingly billed for inpatient stays at the highest severity level – the most expensive level – from FY 2014 through FY 2019.
  • There are indications that these stays are vulnerable to inappropriate billing practices, such as upcoding.
  • We recommend that CMS conduct targeted reviews of MS-DRGs and stays that are vulnerable to upcoding, as well as the hospitals that frequently bill for them.


Key OIG Findings by the Numbers

The OIG reviewed inpatient hospital claims with dates of service from CMS Fiscal Year (FY) 2014 through FY 2019. Listed below are key findings that led the OIG to conclude that hospitals may be upcoding.

OIG Findings from FY 2014 to FY 2019

  • There was an almost 20% increase in claims billed to Medicare Severity Diagnostic Related Groups (MS-DRGs) with a major co-morbidity or complication (MCC).
  • The Average Length of Stay (ALOS) for this group of claims decreased while the overall ALOS remained fairly flat.

In general, MCC’s are diagnoses that when present, you would anticipate the need to use more resources to care for the patient and the patient would have a longer length of stay. For example, you would expect the patient admitted with simple pneumonia that develops acute respiratory failure (which is an MCC) would require more resources and remain in the hospital longer than the patient admitted and discharges with only simple pneumonia.

FY 2019 Specific OIG Findings:

  • $3.5 million (40%) of claims were billed to MS-DRGs with an MCC,
  • Medicare spent $109.8 billion for inpatient stays and nearly half of this amount ($54.6 billion) was for claims billed to MS-DRGs with an MCC,
  • The MS-DRG severity split in FY 2019 was found to be
  • 7% were MS-DRGs with MCC,
  • 1% were MS-DRGs with CC,
  • 5% were MS-DRGS with a CC or MCC, and
  • 7% of the claims were for claims where an MCC or CC does not impact the MS-DRG assignment (i.e. MS-DRG 313 [Chest Pain] or MS-DRG 312 [Syncope]),
  • The average payment for stays with an MCC was $15,500, and
  • Septicemia or severe sepsis with an MCC (MS-DRG 871) was the most frequently billed MS-DRG in FY 2019 (581,000 claims). Medicare paid $7.4 billion to hospitals for this one MS-DRG.

Short Length of Stay Claims

For this data review, the OIG defined short stays as MS-DRGs with LOS 20% shorter than the geometric mean length of stay (GMLOS) for the MS-DRG. Certain discharge dispositions were also excluded where a short stay would be expected (patient expired, patient left against medical advice (AMA), patient transferred to another acute care facility or patient elected hospice care).

The OIG provides specific examples of MS-DRGs with MCC that were more likely to have a short LOS. Specifically, they found that a third of the claims billed to the following MS-DRGs were short stays:

  • MS-DRG 193: Simple Pneumonia and Pleurisy with MCC,
  • MS-DRG 291: Heart Failure and Shock with MCC, and
  • MS-DRG 682: Renal Failure with MCC.

MS-DRGs with One MCC

Over half (54%) of the claims billed with an MCC in FY 2019 were assigned to an MS-DRG based one just one diagnosis designated as an MCC. The OIG notes in their data brief that “stays that reach the highest severity level because of one diagnosis are particularly vulnerable to upcoding. Previous OIG work has found that inappropriate billing of a single major complication can lead to significant Medicare overpayments. In addition, CMS states that a high amount of stays with a single major complication could indicate “over-coding” (i.e., upcoding) of the complications.”

Similar to short length of stay claims, the OIG provides specific examples of MS-DRGs with MCC that were more likely to have only one diagnosis designated as an MCC.

  • Over 80% of claims billed to MS-DRG 689 (Kidney and Urinary Traction Infections with MCC) only had one MCC on the claim.
  • Nearly 70% of the following three MS-DRGs had only one MCC on the claim:
  • MS-DRG 190: Chronic Obstructive Pulmonary Disease with MCC,
  • MS-DRG 193: Simple Pneumonia and Pleurisy with MCC, and
  • MS-DRG 682: Renal Failure with MCC.

OIG Acknowledges Limitations of Study

The OIG does note their study was based on claims data and not medical record reviews. In saying that, they acknowledge that record reviews would be necessary to validate whether or not individual claims were inappropriately billed. Examples of specific factors considered by the OIG that may have impacted the data includes:

  • The transition to ICD-10,
  • The 2-midnight policy,
  • Shifts of surgical procedures to the outpatient setting,
  • Increases in efficiencies of care, and
  • Advancements in technology.

However, they note that “None fully account for the trends described in the report. For example, the fact that the average length of all hospital stays largely remained the same undermines the idea that efficiencies of care or advancements in technology are driving factors. In addition, the billing trends described in this report began before the transition to ICD-10 in FY 2016 and continued well after, refuting that as a significant factor as well.”

There are a couple of things that I believe the OIG did not consider. First, is the Association for Clinical Documentation Integrity Specialists (ACDIS). This Association began on October 1, 2007 which coincided with the go-live date for the transition to the new MS-DRG system which brought about the advent of MCCs. Per the ACDIS Code of Ethics, Clinical documentation improvement specialists shall “Facilitate accurate, complete, and consistent clinical documentation within the health record to support coding and reporting of high-quality healthcare data.”

Speaking only for myself, I believe this group of dedicated professionals collaborating with and educating physicians has resulted in more accurate and complete medical record documentation. The end result being an increase in CMI and reimbursement that is not due to up-coding.

Another issue I believe the OIG did not consider is hospital coding productivity requirements. When discussing review findings with our clients, it is not uncommon that we are told that once they find an MCC or CC to impact the MS-DRG assignment, they do not continue to look for additional MCCs or CCs.

OIG Recommendations

As mentioned earlier in this article, the OIG is recommending that in general, CMS conduct targeted reviews of MS-DRGs and hospital stays that are vulnerable to upcoding, which they define as claims billed with an MCC and the hospitals that frequently bill them. More specifically, review targets should be directed at hospitals that bill MS-DRGs with the following characteristics:   

  • MS-DRGs with an MCC with a short stay,
  • MS-DRGs with only one MCC driving the MS-DRG assignment, and
  • Specific MS-DRGs with MCC with a high proportion of stays that are a short stay and or only have one MCC driving the MS-DRG (i.e. MS-DRG 193: Simple Pneumonia and Pleurisy with MCC).

The OIG notes that in addition to using targeted review results to recoup overpayments, “CMS should use them to educate hospitals about appropriate billing, modify coding policies, and consider whether further steps should be taken to disincentivize inappropriate billing.”

CMS Response to Recommendations

CMS does not agree with the targeted reviews recommendations stating “that there is more work to be done to determine conclusively which changes in billing are attributable to upcoding. CMS also said that it would share our findings with its Recover Audit Contractors for their consideration in updating their strategies for reviewing MS-DRGs.”

MMP Recommendations Moving Forward

Hospitals should carefully read the story that this OIG Data Brief provides and find answers to the following questions:

  • Has there been an increase in your short stays where the claim codes to an MS-DRG with an MCC? Is this true for your claims coding to MS-DRG 193 (Simple Pneumonia and Pleurisy with MCC), MS-DRG 291 (Heart Failure and Shock with MCC), and MS-DRG 682 (Renal Failure with MCC)?
  • Do your claims coded to MS-DRGs with MCC only have one MCC? Is this true for your claims coding to MS-DRG 689 (Kidney and Urinary Tract Infections with MCC), MS-DRG 190 (Chronic Obstructive Pulmonary Disease with MCC), MS-DRG 193 (Simple Pneumonia and Pleurisy with MCC) and MS-DRG 682 (Renal Failure with MCC)?

While you can data mine internally to answer these questions. Do you know how you compare to other hospitals? If not, do you know where you can find answers?


One resource is the Short-Term Acute Care Program for Evaluating Payment Patterns Electronic Report or PEPPER. This report provides a hospital with a compare to their state, their Medicare Administrative Contractor (MAC) Jurisdiction and the nation for specific review targets “at risk for improper payment due to billing, coding, and/or admission necessity items.” Related to the OIG Data Brief, the PEPPER provides a compare of your discharges for MS-DRGs assigned on the bases of only one CC or MCC being coded on the claim.

RealTime Medicare Data

Another potential resource is our sister company, RealTime Medicare Data (RTMD). RTMD collects over 1.2 billion Medicare claims annually from 48 states and the District of Columbia, and allows for searching of over 10 billion historical claims and counting.

One report available in their suite of Inpatient Hospital reports is a One Day Stay Report. Similar to the OIGs definition of short stays, this report excludes claims with a discharge status for Expired (20), left against medical advice (07), hospice (50 & 51) and /or were transferred to another Acute care facility (02). This report enables a hospital to view one day stay paid claims data by DRG and Physician to direct where audits should be focused.

Another report available is a DRG Severity Report that can help you trend your mix of claims coded to MS-DRGs with MCC, with CC, and without CC/MCC respectively. This report provides a compare to your state, your defined market and specific hospitals within your defined market.

For further information on all that RTMD has to offer you can visit their website at

Article Author: Beth Cobb, RN, BSN, ACM, CCDS
Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Analytics at Medical Management Plus, Inc. Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system. In her current position, Beth is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Protection Assessment Tool.

This material was compiled to share information.  MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.