The passing of Oct. 1, 2008 marks the industry's official transition to MS-DRGs, and this blog's two-year anniversary of chronicling the development and implementation of the new reimbursement system. Ingenix is proud to have sponsored the SDRG Report blog during this time, and we'd like to thank our loyal readers who have frequently visited our site to stay up to date with the latest MS-DRG developments.

As the industry is well along in its journey to adopt MS-DRGs, Ingenix has made the decision to discontinue the SDRG Report so that it can focus on other issues that pose challenges for the industry. One of these new challenges is the industry’s transition to ICD-10. To address this issue, Ingenix has developed ICD-10 Prepared to provide the news, resources and tools that organizations will need in their adoption of the new reimbursement system. We hope that you will visit ICD-10 Prepared. As this will be the last post on the SDRG Report blog, we wanted to take the opportunity to highlight some of the issues that have taken place during the past two years.
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Providers appealed 19.6 percent of Recovery Audit Contractor (RAC) overpayment determinations, vs. the 14 percent that CMS stated in its July report of the three-year demonstration program. The difference in appeals was reported by CMS in an update to its July report. The update includes appeal statistics through June 30, 2008, and the initial report only included appeal statistics through March 27, 2008. The update can be accessed here.

Additional statistical changes within the report update include:
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CMS made several announcements in October related to the development its permanent Recovery Audit Contractor (RAC) program.

On Oct. 9, CMS announced that it has hired Provider Resources, Inc., Erie, Pa., to work as the RAC Validation Contractor, which provides additional oversight to ensure that RACs are making accurate claim determinations in the permanent program. The Validation Contractor works with CMS and RACs to approve new issues that the RACs want to pursue for improper payments. In addition, the Validation Contractor performs accuracy reviews on a sample of randomly selected claims where the RACs have already collected overpayments.
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Medicare's no-pay policy for specific hospital-acquired conditions (HACs) has prompted one organization to quantify the legal liabilities that these conditions represent. The study reports that HACs represented 12.2 percent of total legal liability costs incurred among health care facilities in 2007. In addition, one in six legal claims against health care facilities were associated with HACs, injuries, pressure ulcers and foreign objects left in the body after surgery in 2007.

These findings were reported in Aon's "2008 Hospital Professional Liability and Physician Liability Benchmark Analysis."
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Laurie Johnson, a senior health information management consultant for Ingenix, was featured in an Oct. 1, 2008 article published online by Health Data Management, called Preparing for Medicare Audits.

The article focuses on using various strategies to prepare for potential audits from Recovery Audit Contractors (RACs). These strategies include conducing self-assessments, forming RAC committees, and data mining.
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