News to Note – February 2025

With the start of 2025, out-of-pocket maximum spend by beneficiaries with Medicare Part D is now $2,000, down from $8,000 last year.
On the negative side, there’s no sign that the number of individuals committing Medicare fraud is declining, as 2024 saw many reports that were eye-opening.

Almost every audit of diagnosis codes submitted by Medicare Advantage (MA) plans to boost their Risk Adjustment Factor (RAF) scores saw a significant number of the codes not supported by the documentation in the medical record. These audits are finally looking at 2018 submissions, which means the Office of the Inspector General (OIG) can extrapolate the results and assess meaningful, multi-million-dollar payback demands rather than the pocket change demands for audits prior to 2018.
Reports which were most distressing were the number of providers found flaunting the regulations for financial gains.

In one recent case, a hospital used more than one fraudulent process for financial gain. Nina Youngstrom covered this in a Report on Medicare Compliance article, but here are some details:

First, they used their clinical documentation program to get doctors to document conditions that were not clinically supported in order to capture more complication or comorbidities (CCs) and major complication or comorbidities (MCCs).
Then, they schemed to get more inpatient hospitalizations via a multi-pronged plan including financially rewarding doctors $120 per patient to hospitalize them as Inpatient.
Finally, they arranged for charge nurses to unilaterally place verbal Inpatient admission orders without any discussion with the physician to start the midnight clock.
The documentation scheme was discovered by an experienced Clinical Documentation Integrity (CDI) nurse who used Medicare claims data to analyze the hospital’s pattern of Diagnosis-Related Groups (DRGs) with CCs and MCCs and the number of one-day Inpatient hospitalizations. The short-stay data found that 44% of the one-day Inpatient hospitalizations were billed with an MCC. We don’t know if any of these patients started as Outpatient with Observation services and then were changed to Inpatient, but still that number is high. As a whistleblower, the nurse is now $1.8 million richer in addition to the $6 million she received from another whistleblower case settled in 2018.

At the end of December, the Department of Justice indicted Chesapeake Regional Medical Center for allegedly allowing a gynecologist to perform unnecessary surgeries on patients, including sterilizations and hysterectomies. The doctor is already in prison; we will now see what happens to the hospital executives. You can read more about it here.

Roll-out of the Medicare Change of Status Notice (MCSN) happened on 2/14 and in preparation, several providers reported they contacted their QIO to find out what phone number to put on the form and the response was, “we don’t know what you are talking about.” CMS later stated this was simply a miscommunication by the QIOs.

Some have expressed concern that QIO, Acentra (formerly known as Kepro), will be addressing some of these MCSN appeals which are, in essence, short-stay Inpatient hospitalization reviews where the QIO will decide if the correct status was ordered. Why the concern? When the Two-Midnight Rule was introduced in 2013, CMS had both QIOs performing short-stay audits but then in 2019 they gave the contact exclusively to the QIO, Livanta. Why they stopped allowing Kepro (now Acentra) to perform the audits is not clear, but they have not had experience in this kind of audit for the last five years.
Remember that Medicare patients changed from Inpatient to Outpatient status require your Utilization Review Committee physician and the attending to both determine the change is appropriate. As such, there is an expectation by some that the QIOs will rule in favor of the hospital in 100% of the cases.
But, what if the QIO determines that Inpatient was correct? Does the hospital object and ask for a reconsideration? If so, what’s the appeal process? CMS has laid out the appeal process for patients but not for providers. Or, does the hospital accept the QIO determination and accept the significantly higher DRG payment? Would that hospitalization now be exempt from further audits? We’re just not sure.