On Friday, March 15, 2024, the Office of Inspector General (OIG) updated their Work Plan with eight new items. One item that hospitals will want to follow is related to hospital billing for sepsis.
OIG Work Plan Item (OEI-02-24-00230): Medicare Inpatient Hospital Billing for Sepsis
“Sepsis is the body’s extreme response to infection. It is a life-threatening, emergency medical issue that often progresses quickly and responds best to early intervention. The definition of and guidance for sepsis have changed over the years in attempts to identify it more accurately. The definition of sepsis was updated in 2016 by an international task force to better differentiate sepsis from a general infection. This narrower definition is widely recognized by groups such as the World Health Organization. However, CMS and CDC currently recognize an older, broader definition. Sepsis is a frequently billed diagnosis in Medicare. There are concerns that hospitals may be taking advantage of this broader definition, as they have a financial incentive to do so. This study will analyze Medicare claims to assess patterns in the inpatient hospital billing of sepsis in 2023 and describe how billing of sepsis varied among hospitals. We will also estimate the costs to Medicare associated with using the broader, rather than the narrower, definition of sepsis.” The OIG’s expected report issue date is in Fiscal Year (FY) 2025.
Sepsis, Not a New Target
OIG and Sepsis
This is not the first time that the OIG has had sepsis MS-DRG’s in their crosshairs. For example, sepsis was mentioned in the February 2021 OIG Report: Trend Toward More Expensive Inpatient Hospitals Stays Emerged Before COVID-19 and Warrant’s further Scrutiny.
In their report results, the OIG indicated that “the most frequently billed MS-DRG in FY 2019 was septicemia or severe sepsis with a major complication (MS-DRG 871). Hospitals billed for 581,000 of these stays, for which Medicare paid $7.4 billion.”
The following data compares Medicare Fee-for-Service paid claims data by calendar year from pre-COVID 2019 to after then end of the COVID-19 public health emergency (PHE) in May 2023.
MS-DRG 871 Medicare Fee-for-Service Paid Claims Data Trend
Calendar Year 2019
Claims Volume: 620,927
Claims Payment: $7.992,972,329
Calendar Year 2020
Claims Volume: 611,140
Claims Payment: $8,481,178,934
Calendar Year 2021
Claims Volume: 556,680
Claims Payment: $8,152,439,134
Calendar Year 2022
Claims Volume: 566,387
Claims Payment: $8,392,707,197
Calendar Year (January 1 – September 30, 2023) Annualized
Claims Volume: 546,496
Claims Payment: $8,238,024,702
The data shows that claims volume and payment has declined since the height of the COVID-19 pandemic in 2020. However, when you annualize calendar year 2023 claims data (January 1 through September 30, 2023), Medicare payment for sepsis continues to be immense at just over $8.2 billion for one MS-DRG. This data was provided by our sister company, RealTime Medicare Data (RTMD).
