Billing

Hospitals Must Correctly Assign Severe Malnutrition Diagnosis Codes to Inpatient Claims

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Hospitals Must Correctly Assign Severe Malnutrition Diagnosis Codes to Inpatient Claims

As your Part A MAC, National Government Services is alerting our IPPS hospitals of the following audit findings as well as actions you can take to prevent billing/coding errors on inpatient claims you submit to Medicare.

An audit conducted by the OIG concluded that IPPS hospitals incorrectly reported severe malnutrition diagnosis codes on inpatient claims submitted to Medicare resulting in Medicare overpayments. In 2020, the OIG conducted an audit on a sample of inpatient hospital claims, each with a discharge date in FY 2016 or 2017 and a diagnosis code of E41 or E43 which, when removed from the claim, resulted in a different DRG payment. The OIG evaluated these sample claims to determine if the hospitals complied with Medicare’s billing requirements when assigning severe malnutrition diagnosis code E41 or E43 to inpatient claims.

Diagnosis codes E41 and E43, two types of severe malnutrition listed in the ICD-10-CM, are referred to as “severe malnutrition diagnosis codes” in the OIG’s report. Each of these diagnosis codes is classified as a type of MCC. Reporting MCCs on a Medicare claim can result in a higher Medicare payment.

  • Diagnosis code E41 is for nutritional marasmus which is a severe manifestation of protein-energy malnutrition caused by a deficiency in calories and energy and found primarily in children.
  • Diagnosis code E43 is for unspecified severe protein-calorie malnutrition.

The OIG concluded billing errors occurred because the hospitals reported severe malnutrition diagnosis codes E41 or E43 when they:

  • should have reported diagnosis codes for other forms of malnutrition or
  • should not have reported a malnutrition diagnosis code at all.

As they had found in previous audits they conducted, the OIG found hospitals often provided medical record documentation that did not include evidence the malnutrition was severe or had an effect on patient care.

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Hospital Action(s)

To prevent billing/coding errors on inpatient claims you submit to Medicare, be reminded for each claim to:

  • Review medical records thoroughly and report the principal diagnosis and all relevant secondary diagnoses (comorbid conditions, complications) on your claims accurately. The relevant diagnoses are those that affect the DRG assignment. Identify the principal diagnosis when you are also reporting secondary diagnoses. When a comorbid condition, complication, or secondary diagnosis affecting the DRG assignment is not listed on your claim but is indicated in the medical record, report the appropriate code on the claim.
  • Consider the ICD-10 CM Official Guidelines for Coding and Reporting as these provide general rules for reporting other diagnosis codes. They state diagnosis codes can be billed for additional conditions if those conditions affect patient care in terms of requiring clinical evaluation, therapeutic treatment, or diagnostic procedures or if those conditions extend the length of the hospital stay or require increased nursing care or monitoring. Previous conditions that have no impact on the current stay should not be reported. Malnutrition is a broad term used to describe undernutrition. A diagnosis is usually based on patient history with clinical indications documented in the medical record.
  • Report severe malnutrition diagnosis codes to claims correctly as this diagnosis can have an impact on your Medicare claim payment. The medical record documentation must have evidence the malnutrition was severe or had an effect on patient care.
  • Conduct a thorough review of the medical record documentation against the bill to confirm reporting accuracy on the claim you will submit to Medicare.
  • Submit complete medical records that support the coding/reporting of severe malnutrition to the claim if the MAC or any Medicare Review Contractor requests such documentation from you.
  • Be aware Medicare Contractors may perform DRG validations on IPPS claims as appropriate to review the medical record for medical necessity and validate the DRG to ensure diagnostic and procedural information and discharge status as coded on the claim matches both the attending physician’s description and the information contained in the medical records. The review validates the principle diagnosis code and secondary diagnosis codes and procedures affecting, or potentially affecting, the DRGs. DRG validation is based upon accepted principles of coding practice, consistent with the coding principles reflected in the ICD Coding Manual in place at the time the services were rendered, as well as the Uniform Hospital Discharge Data Set element definitions and coding clarifications issued by the CMS.

Please share this information with those who assign diagnosis and procedure codes to your inpatient Medicare claims.

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Revised 5/31/2023