Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Reimbursement News

Diagnosis Code Confusion Leads to Medical Billing Errors

By Ryan Mcaskill

Several hospitals across the country miscoded Kwashiorkor, resulting in Medicare overpayments.

- For medical billing to be accurate, it is critical for practitioners to code every procedure and disease treated accurately. Failure to do this can result in incorrect inpatient claims and overpayments from Medicare providers. Several medical centers are now finding this out the hard way because of an improper diagnosis code.

Kwashiorkor is a form of malnutrition that occurs when there is not enough protein in the diet. It is most commonly found in areas of where there is famine, limited food supply or limited education in a proper diet. It is most common in children and the elderly, though cases in the United States are rare.  For some hospitals, however, categorizing this has proven to be a challenge.

This week, the Office of Inspector General (OIG) of the Department of Health and Human Services released several reports that focused on hospitals between the calendar years of 2010 and 2011. During this time, Medicare paid hospitals $711 million for claims that included a diagnosis code for Kwashiorkor. This is a recap of three different hospitals from around the country that committed errors because they lacked a complete understanding of the coding guidelines or had issues with their billing software.

Mother Frances Hospital, Tyler, Texas

During the time of the audit, Mother Frances Hospital processed 530 claims using diagnosis code 206 for Kwashiorkor resulting in $7,928,476 of Medicare payments. The audit examined 160 of those claims resulting in payments of $2,045,971. The remaining 370 claims were not examined because the use of the code did not change the overall Medicare payment.

According to the audit, all of these claims are considered inaccurate, resulting in overpayments of $779,541. Hospital officials concurred with the findings and attributed these errors to a misinterpretation of the coding guidelines, issues with the medical coding software program used to code the diagnoses and the incorrect guidance from a third party consultant.

Providence Portland Medical Center, Portland, Oregon

During the time of the audit, Providence Portland Medical Center processed 90 claims using the diagnosis code 206 for Kwashiorkor resulting in $2,868,197 of Medicare payments. The medical center did not comply with Medicare requirements for any of these claims, through only three resulted in overpayments of $12,516.

Medical center officials agreed with the findings and attributed the errors to a lack of clarity in the coding guidelines for malnutrition.

Overlook Medical Center, Summit, New Jersey

During the time of the audit, Overlook Medical Centers processed 55 inpatient claims using the diagnosis code 260 for Kwashiorkor resulting in $4,948,180 in Medicare payments.* All of these claims were processed incorrectly but only 19 claims resulted in overpayments of $84,893.

Medical center officials agreed with the findings and attributed the errors to a lack of clarity in the coding guidelines and issues with the medical coding software program used to code the diagnoses.

Editor's note: A previous version of this article incorrectly listed the code as 206.

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