The HHS Office of Inspector General has issued a report recommending CMS expand the DRG window.
The DRG window was created in 2011. The policy essentially says that outpatient services related to an inpatient admission are not reimbursed separately. Instead, they are lumped into the inpatient payment, or Medicare's diagnosis-related group payments. The DRG window only includes outpatient services that are delivered within three days of the admission, related to the admission and delivered in a setting "wholly owned or operated by the admitting hospital," according to the OIG report.
However, the settings included within the DRG window only include outpatient clinics and physician offices within the admitting hospital's structure. The DRG window does not include other affiliating hospitals that are owned by the same parent organization.
The OIG analyzed inpatient claims, outpatient claims and Medicare cost reports to find out how much money was spent on outpatient services related to inpatient admissions — but might have fallen out of the boundaries of the DRG window. Specifically, the OIG looked at outpatient services provided before three days of the admission and those provided at hospitals affiliated with, "but not owned by," the admitting hospitals.
Officials said the Medicare program could have saved more than $300 million in 2011 if the DRG window were expanded to include affiliated hospitals and more days prior to the admission.
The OIG recommended CMS expand the DRG window to include additional days prior to the inpatient admission and to include other hospital ownership arrangements. However, CMS disagreed with both of the recommendations. Officials said trying to change the legislation was not included in President Obama's budget for this year. In addition, CMS said the OIG did not specify how many days the DRG window should expand to, but the OIG said that would be up to CMS.
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