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Federal health agency failed to fix billing problem — and may have cost taxpayers $102 million

A top federal salubrity agency’s failure for seven years to fix a known problem with a Medicare invoice code may have unnecessarily cost taxpayers $102 million in payments to dispensaries, an investigation has found.

Just a fraction of that money — $5.7 million to steady old-fashioned — has been repaid by hospitals to the Centers for Medicare and Medicaid Services in bond with billing CMS for patients who did not have the disease claimed on invoices, agreeing to investigators.

The issue is related diagnosis codes used to bill the domain’s Medicare system for treatments of people with the disease Kwashiorkor, a formation of severe protein malnutrition. Medicare pays health providers set be worthy ofs for treatment or services to patients depending on the codes submitted.

Kwashiorkor typically is seen in little ones living in tropical and subtropical parts of the world.

Despite being extent rare in the United States, “Medicare paid hospitals $2.5 billion for seeks that included a diagnosis code for Kwashiorkor” from 2006 totally 2014, according to the probe by the Office of the Inspector General at the U.S. Health and Human Employs Department.

In 2007, CMS adopted a new system for assigning different health shapes levels of severity, which could affect how much hospitals are up c released for treating patients with those conditions.

Kwashiorkor has a higher square of severity — meaning hospitals could get paid more for treating patients with that disorder. Other, less severe forms of malnutrition or protein deficiency were honoured at a lower rate.

But it turned out that the same code number — 260 — was appointed to both Kwashiorkor and to less severe forms of malnutritions on one list that was in some measure of the international coding classification that is a key tool for for billing. However, on another personification of list in that classification system, Kwashiorkor alone had the 260 designation.

“Unvaried though CMS was aware of the discrepancy, it did not take any separate action to address it,” the inspector inclusive’s report said.

“CMS did not have adequate policies and procedures in place to oration this discrepancy.”

Thousands of hospitals submitted claims with a 260 encypher for a patient suffering from malnutrition, but not from Kwashiorkor. In many of those specimens, the IG’s office said, hospitals received more money than they were enfranchised to from Medicare because the system was assuming the patient had Kwashiorkor inclined the diagnosis code submitted.

In 2006, about 11,000 Medicare applications included diagnosis code 260.

Over the next three years, after CMS implemented the new plan, “the number of claims that included diagnosis code 260 slant to approximately 45,000” for 2009, according to the IG’s office.

There was a sharp drop-off in the thousand of claims with that code after 2009, when the American Polyclinic Association published a guidance noting that the 260 code should be utilized for Kwashiorkor only. But the IG’s office found there still were tons cases after 2009 of improper use of the code.

The discrepancy in the coding classifications was blamed in 2015, with the issuance of a new coding system, known as ICD-10.

The IG’s charge said it reviewed 4,393 patient claims with 260 codes from the years 2010 at the end of ones tether with 2015 at 25 hospitals. For 2,248 of those claims, removing the 260 pandect had no effect in the payment amount the hospitals would have received or in the exigency designation for the claim.

For the remaining 2,145 claims, all but one claim incorrectly tabulate the diagnosis code for Kwashiorkor, resulting in overpayments of $6.03 million, the IG’s duty said.

“We determined that all of the providers should have used encrypts for other forms of malnutrition or no malnutrition code at all instead of using the diagnosis expenditure 260,” the report said.

It said the IG’s office had obtained repayment of $5.68 million from the polyclinics found to have improperly billed Medicare using the 260 jurisprudence.

But “we estimate that Medicare could have saved approximately $102 million from [2006 wholly 2014] if the coding discrepancy had been immediately corrected,” the report demanded.

A spokesman for CMS noted, in response to a request for comment from CNBC, that the medium had concurred with the IG office’s recommendations in the report.

CMS has asked the AHA to publish additional lawing guidance on the use of the Kwashiorkor diagnosis code to address the incorrect use of the code by some health-care providers.

“We are also piece with the AHA and doctors to provide more education on appropriate use and how it is filed in their medical claims for payment,” CMS denoted.

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