CMS RACs Approved for Over 500 DRG Validation Issues

eduTrax News Service - January 7, 2010.

Region D RAC Posts 530 Issues for Complex Review

530 MS-DRGs Approved for DRG Validation and MS-DRG Coding Review

Health Data Insights (HDI) posted on their website 66 new approved issues for review, late yesterday, January 6. HDI is CMS's Recovery Audit Contractor (RAC) for several states in the western US. The issues posted by HDI are all for MS-DRG coding and DRG validation, but medical necessity is specifically excluded from review, at this time.  The list of MS-DRG’s included in the issues represent both medical and surgical cases, and totals 530 of the 747 existing MS-DRGs, or 70% of all DRGs. Taken together, the four RACs are approved for over 570 DRG Validation issues.  Click title to read more...

The same 530 MSDRGs are listed as also approved for a second type of review: DRG Validation for Underpayment. HDI is the first RAC to list any issues for reveiw for underpayment, although the RAC Statement of Work includes this kind of review as part of their contract with CMS. RACs are paid the same contingency fees (9% to 12.5%, depending on their contract with CMS) for either type of erroneous payment. However, it is expected that overpayments will be more abundant and more easily identified.

HDI's list of approved issues groups multiple MS-DRGs together, in groups that have no medical counterpart. That is, the grouping of MS-DRGs is usually done via the Major Diagnostic Categories (MDCs). MDCs are 25 mutually exclusive groups of ICD-9-CM diagnosis codes, which correspond to a single organ system or “cause” and are in general associated with a particular medical specialty. HDI, however, has grouped MS-DRGs coming from disparate MDCs. The groupings appear to be done for the purpose of posting as many together in one issue as possible, sometimes including over 50 MS-DRGs. One of the issues posted is entitled, "DRG Validation-MDC 04 Respiratory, Underpayment," and then includes all 42 MS-DRGs as being approved for review and DRG Validation.

The list posted by HDI is a departure from what the other RACs have been doing on their lists, particularly Connolly Healthcare, the RAC for Region C, which is the only other RAC to post any issues approved for Complex Review, to date.