(Medicare Claims Processing Manual)

20.1.2.8 - Special Outlier Payments for Burn Cases  (Rev. 707, Issued:  10- 12-05; Effective/Implementation Dates:  11 -07-05)   For discharges occurring on or after April 1, 1988, the additional payment amount for the DRGs related to burn cases, which are identified in the most recent annual notice of prospective payment rates is computed using the same methodology (as stated above in section 20.1.2.3) except that the payment is made using a marginal cost factor of 90 percent instead of 80 percent.  20.1.2.9 - Medical Review and Adjustments (Rev. 1571; Issued:  08-07- 08; Effective Date:  08 -01-08; Implementation Date:  08-15-08)  Effective April 1, 2008, QIOs are no longer performing the majority of medical review for payment of acute inpatient prospective payment system (IPPS) hospital and long term care hospital (LTCH) claims.  These reviews are the responsibility of the A/B MACs (A).  An exception occurs when a provider requests a higher-weighted DRG review from the QIO.  The QIO will continue to perform those reviews.  The A/B MAC (A) may review a sample of cost outlier cases after payment.  The charges for any services identified as non-covered through this review are denied and any outlier payment made for these services is recovered, as appropriate, after a determinat ion as to the providers liability has been made.  If the A/B MAC (A) finds a pattern of inappropriate utilization by a hospital, all cost outlier cases from that hospital may be subject to medical review, and this review may be conducted prior to payment until the A/B MAC (A) determines that appropriate c orrective actions have been taken.   When the A/B MAC (A) reviews cost outlier cases, they shall do so using the medical records and itemized charges, to verify the following:  1. The admission was medically necessary and appropriate;  2. Services were medically necessary and delivered in the most appropriate setting;  3. Services were ordered by the physician, actually furnished, and not duplicatively billed; and  4. The diagnostic and procedural coding are correct.  Where the A/B MAC (A)s decision changes previously processed bills, an adjustment bill is prepared to correct the bill.   When the hospital provides the A/B MAC (A) with medical records for cost outlier review, the hospital must indicate the precise revenue code for each charge billed.  In case adjustments are needed, revenue codes are necessary to ensure proper accounting for cost report purposes.  It is not acceptable for the hospital to merely provide listings of revenue codes expecting the A/B MAC (A) to assign the charges to the appropriate code.  If the correct revenue codes are not provided, the A/B MAC (A) will deny the bill.   20.1.2.10 - Return Codes for Pricer  (Rev. 3030, Issued: 08- 22-14, Effective: ASC X12: January 1, 2012, ICD-10: Upon Implementation of ICD-10, Implementation: ICD-10: Upon Implementation of ICD-10, ASC X12: September, 23 2014)  The following return codes are calculated by PRICER and passed back to the calling program.  Depending on the type of payment and case, return codes 30, 44, 33, 40 and 42 indicate that an outlier would be paid if the cost-to-charge ratio would rise by 20 percentage points.  If a provider(s) (CCR rises by 10 percentage points and) meets the criteria of reconciliation, the CMS Central Office uses return codes 30, 44, 33, 40 and 42 to determine a smaller pool of claims for reprocessing claims due to outlier reconciliation.   Acute Care   Return Code 00: Paid normal DRG payment.  Return Code 02: Paid normal DRG payment plus a cost outlier.  Return Code 14: Paid normal DRG payment with per diem days equal or greater than geometric mean length of stay.  Return Code 16: Paid normal DRG payment plus a cost outlier with per diem days equal to or greater than geometric mean length of stay.  Return Code 30: Paid normal DRG payment and indicates an outlier payment would be necessary if the CCR would increase by 20 percentage points.  Return Code 44: Paid normal DRG payment with per diem days equal or greater than geometric mean length of stay and indicates an outlier payment would be necessary if the CCR would increase by 20 percentage points.  Transfer Cases   Return Code 03:  Paid a per diem payment to the transferring IPPS hospital (when the patient transfers to an IPPS hospital) up to and including the full DRG payment if the covered days are less than the geometric mean length of stay for the DRG.  If covered days equal or exceed the geometric mean length of stay, the standard payment is calculated.   Return Code 05:  Paid a per diem payment to the transferring IPPS hospital (when the patient transfers to an IPPS hospital) up to and including the full DRG payment if the covered days are less than the geometric mean length of stay for the DRG.  If covered days equal or exceed the geometric mean  length of stay, the standard payment is calculated.  Also indicates case qualified for a cost outlier payment.   Return Code 06: Paid a per diem payment to the transferring IPPS hospital (when the patient transfers to an IPPS hospital) up to and including the full DRG payment if the covered days are less than the geometric mean length of stay for the DRG.  If covered days equal or exceed the geometric mean  length of stay, the standard payment is calculated. Also indicates provider refused cost outlier payment.  Return Code 33:  Paid a per diem payment to the transferring IPPS hospital (when the patient transfers to an IPPS hospital) up to and including the full DRG payment if the covered days are less than the geometric mean length of stay for the DRG.  If covered days equal or exceed the geometric mean  length of stay, the standard payment is calculated.  Also indicates an outlier payment would be necessary if the CCR increased by 20 percentage points.  Postacute Transfer Cases   Return Code 10: Makes payment to the transferring IPPS hospital (when the patient transfers to a non- IPPS hospital) for postacute transfer DRGs (that have double the payment on the 1st day for purposes of the postacute care transfer policy)  as published in the annual IPPS Final Rule.  Will calculate a per diem payment based on the standard DRG payment if the covered days are less than the geometric mean  length of stay for the DRG.  If covered days equal or exceed the geometric mean  length of stay the standard payment is also calculated.  The cost outlier portion of the payment is calculated if the adjusted charges on the bill exceed the outlier threshold.  Return Code 12: Makes payment to the transferring IPPS hospital (when the patient transfers to a non- IPPS hospital) for postacute transfer DRGs (that receive 50 percent of the prospective payment on the 1st day of the stay for purposes of the postacute care transfer policy) as published in the annual IPPS Final Rule . Will calculate a per diem payment based on the standard DRG payment if the covered days are less than the geometric mean  length of stay for the DRG.  If covered days equal or exceed the geometric mean  length of stay, the standard payment is calculated.  The cost outlier portion of the payment is calculated if the adjusted charges on the bill exceed the outlier threshold.  Return Code 40: Makes payment to the transferring IPPS hospital (when the patient transfers to a non- IPPS hospital)  for postacute transfer DRGs (that have double the payment on the 1st day for purposes of the postacute care transfer policy) as published in the annual IPPS Final Rule .  Will calculate a per diem payment based on the standard DRG payment if the covered days are less than the geometric mean  length of stay for the DRG.  If covered days equal or exceed the geometric mean  length of stay, the standard payment is calculated.  Also indi cates an outlier payment would be necessary if the CCR increased by 20 percentage points.  Return Code 42: Makes payment to the transferring IPPS hospital (when the patient transfers to a non- IPPS hospital) for postacute transfer DRGs (that receive 50 percent of the prospective payment on the 1st day of the stay for purposes of the postacute care transfer policy) as published in the annual IPPS Final Rule. Will calculate a per diem payment based on the standard DRG payment if the covered days are less than the geometric mean length of stay for the  DRG.  If covered days equal or exceed the geometr ic mean length of stay, the standard payment is calculated. Also indicates an outlier payment would be necessary if the CCR increased by 20 percentage points.  20.2 - Computer Programs Used to Support Prospective Payment System  (Rev. 11140, Issued:12- 02-21, Effective:01 -04-22, Implementation: 01- 04-22)   Medicare Code Editor  The Medicare Code Editor (MCE) is a front -end software program that edits claims to detect incorrect billing data.  The MCE addresses three basic types of edits which will support the DRG assignment.  They include correct diagnosis and procedure coding, coverage, and clinical edits.   Built into the MCE, which is the first portion of the Grouper program, are edits which reject incomplete or impossible codes.  Claims submitted with valid diagnoses and valid diagnoses -surgical procedure combinations but are incorrect in that they do not r epresent the actual diagnosis or procedure, cannot be detected.  The responsibility for accuracy rests with the hospital.  However, a post claim approval review may be conducted by the A/B MACs (A), using medical records and the approved claim.  Grouper Program   The Grouper program determines the DRG from data elements the hospital reported.  It is used on all inpatient discharge/transfer bills received from both PPS and non- PPS facilities, including those from waiver States, long- term care hospitals, and excluded units.   Pricer Program   The Pricer program determines the amount to pay under prospective payment.  The Pricer program applies the DRG relative weights, hospital urban or rural and census division location, hospital specific data, and beneficiary hospital data from the bill to determine the amount payable for each PPS discharge bill.   Most hospitals should not need a Pricer program because only one rate per DRG applies unless the claim results in a cost outlier for a beneficiary whose benefits are exhausted during the stay.  For those claims, the provider must identify the outlier threshold to properly bill covered days on an inpatient claim.  See 20.7.4 below.    20.2.1 - Medicare Code Editor (MCE)  (Rev. 11059; Issued: 10- 21-21; Effective: 04 -01-22; Implementation: 04 -04-22)  A. - General   The MCE edits claims to detect incorrect billing data.  In determining the appropriate MS -DRG for a Medicare patient, the age, sex, discharge status, principal diagnosis, secondary diagnosis, and procedures performed must be reported accurately to the Grou per program.  The logic of the Grouper software assumes that this information is accurate and the Grouper does not make any attempt to edit the data for accuracy.  Only where extreme inconsistencies occur in the patient information will a patient not be as signed to a MS -DRG.  Therefore, the MCE is used to improve the quality of information given to Grouper.   The MCE addresses three basic types of edits which will support the MS -DRG assignment:    Code Edits -  Examines a claim for the correct use of diagnosis and procedure codes.  They include basic consistency checks on the interrelationship among a patient's age, sex, and diagnoses and procedures reported.    Coverage Edits -  Examines the type of patient and procedures performed to determine if the services are covered.    Clinical Edits -  Examines the clinical consistency of the diagnostic and procedural information on the claim to determine if they are clinically reasonable and, therefore, should be paid.   B. - Implementation Requirements   The A/B MAC (A) processes all inpatient Part A discharge/transfer claims for both PPS and non- PPS facilities (including waiver States, long- term care hospitals, and excluded units) through the MCE.  It processes claims that have been reviewed by the QIO pr ior to billing through the MCE only for edit types 1, 2, 3, 4, 7, and 12.  It does not process the following kinds of claims through the MCE:    Where no Medicare payment is due (amounts reported by value codes 12, 13, 14, 15, or 16 equal or exceed charges).    Where no Medicare payment is being made.  Where partial payment is made, editing is required.    Where QIO reviewed prior to billing (condition code C1 or C3).  It may process these exceptions through the program and ignore development codes or bypass the program.