Audit of COVID-19 hospital stay uncovers unbundled services resulting in huge savings

ClaimDOC’ s comprehensive line-by-line auditing of claims uncovers errors that basic claim repricing and auto-adjudication does not catch, leading to greater savings to health plans and beneficiaries. Our audit team analyzes all types of healthcare claims for a variety of potential concerns including excessive usual and customary charges, duplication of claims, correct coding edits, unbundling of services, and others. Our claims review is not intended to impact care decisions or medical practice.

Case Scenario

Member was admitted to the hospital for severe infection, pneumonia, and COVID-19 resulting in a nineteen-day hospital stay. The hospital claim and charges submitted to insurance totaled $508,810.97. The primary diagnosis reported on the claim was A41.89, defined as, other specified sepsis.

In this case, high dollar charges included pharmacy charges for $149,547.97, room and board (ICU) for $129,884.00, laboratory services for $120,792.00, respiratory services for $45,832.00 and pulmonary services for $17,752.00. Our review of the hospital itemized bill identified unbundled services considered to be part/partial to other reported services reported and billed. Examples included charges for respiratory services, medical/surgical supplies, laboratory services, pulmonary services, and monitoring services.

The hospital’s cost-to-charge ratio (C-C/R) allowances for each Revenue Code reported/billed minus the identified unbundled services resulted in pricing falling below Medicare’s Diagnosis Related Group (DRG) 870. After C-C/R and DRG comparisons, the claim was priced using Medicare’s DRG 870 with markup. The claim was submitted with multiple diagnosis codes including ICD-10-CM diagnosis code U07.1, defined as, COVID-19.  The COVID-19 diagnosis code increased the DRG weight by 20%. (The inflated DRG payment is used in the operating outlier, operating DSH, and operating IME calculations. Per CMS regulations, the increased DRG weight is not used in the capital payment calculations).

Below is an overview of the hospital charges billed and related ClaimDOC pricing and savings:

  • Total billed charges: $508,810.97
  • ClaimDOC Allowed: $129,605.45
  • Plan Savings: $379,205.52
  • Percentage of Savings: 75%

The Takeaway

Unbundling of hospital services considered part and partial to other reported/billed services and over-inflated charges were observed on the itemized bill. While hospitals may charge any amount they choose for provided services, egregious fees and billing unbundled services can complicate matters for members to understand their bills and payments, impact the collection of patient balances, build a reputation of hospitals charging high fees, create burdens for patients having no insurance and a host of others.

Our goal at ClaimDOC is to use benchmark charges and costs nationally to negotiate fair and ethical payments. Employers rely on us to establish fair reimbursement rates for their plans allowing them to save money and provide richer benefits to their employees. A win-win for everyone.