OIG says Wisconsin Health System incorrectly billed for severe malnutrition

July 9, 2018

An Office of Inspector General (OIG) audit of the University of Wisconsin Hospitals and Clinics Authority revealed noncompliance with Medicare billing requirements when billing for nutritional marasmus and other/unspecified severe protein-calorie malnutrition.

In its audit of the health system, the OIG selected a sample of 100 claims for severe malnutrition diagnoses. Ninety of the 100 claims did not comply with Medicare billing requirements, which resulted in over $560,000 in overpayments. Based on the sample, the OIG estimated that the health system received more than $2.4 million in overpayments in 2014 through 2016.

According to the review, for two of the Medicare claims, medical record documentation supported a secondary diagnosis code other than a severe malnutrition diagnosis code, but the error did not affect the DRG or payment.

The remaining 88 claims were billed incorrectly because the hospital reported severe malnutrition diagnosis codes when it should have reported codes for other forms of malnutrition or no malnutrition diagnosis code at all, according to the review. For these claims, medical record documentation did not contain either:

  • Evidence that the patient had severe malnutrition
  • Evidence that a diagnosis of severe malnutrition influenced treatment or the length of the hospital stay

In their official response, OIG recommended that University of Wisconsin Health System refund Medicare more than $2.4 million, identify and return similar overpayments outside the audit period, and strengthen controls on their Medicare billing process. The hospital partially disagreed with the recommendation to refund Medicare and disagreed with the other two recommendations.

Chief Compliance Officer Troy Lepien criticized OIG’s sampling methodology and general standards for billing severe malnutrition diagnosis codes. According to Lepien, OIG has not specified any discernable, objective standard to apply in diagnosing severe malnutrition.

Comments from the University of Wisconsin Health System the can be found in Appendix D of the report.