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CMS Releases Article Discussing DRG Coding Vulnerabilities for Inpatient Hospitals

The Centers for Medicare and Medicaid Services (CMS) released a MLN Matters article this week discussing Diagnosis Related Group (DRG) Coding vulnerabilities for inpatient hospitals. DRG validation review, executed by Recovery Audit Contractors (RACs), focuses on the hospital’s selection of principal and secondary diagnoses and procedures for a claim. The recent MLN Matters article notes that auditors in the RAC program have discovered coding errors that may result in RAC overpayment demands in connection with DRG validation reviews.

The MLN Matters article reminds inpatient hospitals of the risks associated with coding a record prior to receiving the complete medical record. For example, the article identifies the situation where the emergency room report, History and Physical, and early progress notes identify one condition, where continued evaluation reveals an entirely different condition. This practice may mean that the reported codes do not accurately portray a patient’s conditions and procedures throughout the course of treatment. The recovery auditors, however, will review the entire medical record during DRG validation review and may discover another more accurate code exists for the services provided.

In addition, the article noted that if there is conflicting or contradictory information in the record, the coder should ask the attending physician for clarification to identify the correct principal and secondary diagnoses.

Finally, as with all codes, the article reminds inpatient hospitals to include clinical evidence in the medical record to support a code’s assignment.

For more information on RAC audits and best practices to meet Medicare’s documentation requirements, please visit or contact a Wachler & Associates attorney at 248-544-0888.

MLN Matters article

Inpatient hospitals

Recovery Auditors

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