OIG report: Increased Medicare spending on inpatient stays raises upcoding concerns

A new report from the Office of Inspector General (OIG) shows that Medicare billing for high-level inpatient stays increased over a six-year period, sparking concerns by the government about upcoding.

The OIG reviewed Medicare Part A claims for inpatient stays from fiscal years 2014 to 2019. It found that the number of inpatient stays billed at the highest severity level increased nearly 20%, while the number of stays billed at other severity levels decreased. Inpatient stays at the highest severity level accounted for nearly half of all Medicare spending on inpatient visits during the period.

Furthermore, the OIG found that the average length of stay decreased for high-level stays, while the average length of all stays remained largely the same.

“The increase in the number of stays billed at the highest severity level implies that beneficiaries were sicker overall,” OIG writes. “However, the decrease in the average length of stays at the highest severity level potentially undermines that idea because it is not consistent with sicker beneficiaries.”

These findings suggest that some high-level stays may have been inappropriately billed at a higher level than was warranted, according to the OIG. The agency recommends that CMS conduct targeted reviews of high-severity MS-DRGs (e.g., MS-DRGs 190 [chronic obstructive pulmonary disease], 193 [pneumonia], and 682 [renal failure]) and high-level inpatient stays, which are vulnerable to upcoding.