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Written by: Darlene D'Altorio-Jones (1959-2015) on Thursday, March 10, 2011 Posted in: Inpatient Rehab

On February 24, 2011, the Office of Inspector General (OIG) posted a final report, A-01-10-00518, stating that, “IRFs incorrectly coded 24 of the 53 claims reviewed with patient status code 05.” In PAI language, this translates to a “skilled nursing facility.” Unfortunately, the uniform bill is not encoded the same. This resulted in a $245,090 overpayment. An error rate of 45% should be alarming to IRFs. This report can be found on OIG’s website, and I strongly suggest IRFs and their coding departments take a closer look.

I can only propose that IRFs are a victim of confusion on this particular item and here is why. The PAI is encoded in field 44A, with a number that describes “Discharge to Living Setting.” It so happens that the number 05 is equivalent to a skilled nursing facility. However, the uniform billing document has a field locator number 17 that asks for the “Status Code” also defined as the discharge destination. The dichotomy unfolds here and I suspect is the real cause of error, not intended fraudulent practice. It seems like a set up for failure in that the uniform billing (UB) form defines number 05 as, “05 discharged/transferred to another type of institution not defined elsewhere in this code list (effective 2/23/05).” These instructions are from transmittal 1104, November 3, 2006 and can be found in the Hospital Billing Claims Processing Manual in Chapter 3.

Often IRF bills are not followed through in an audit process from a clinical picture captured on the PAI to the actual uniform bill which is released to the MAC/FI for payment. Even more alarming is the fact that PAIs must now be part of the medical record per CMS guidelines 2010. It seems harmless enough that a code represented on the PAI for the discharge destination would be identical on the UB; alarmingly this is not so. Coders read charts thoroughly. Innocently, they must ignore the PAI code for discharge destination.

What should you do? Run a report on all patients discharged to number 05 on the PAI for a given year. Ask the billing department to provide you with the FL number 17 code for those patients. Look for number 03 or 04 to correctly represent a PAI number 05 placement. Review the CMS Claims Processing Manual, Chapter 3,  Section 140.3 or page 255 if opened as a PDF from CMS’ website.

See what you find before your MAC or RAC finds it for you!

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