OIG to Look For Additional Kwashiorkor Fraudulent Billing in 2014

The 2014 Office of Inspector General (OIG) Workplan promises that the agency will look for more cases of hospitals miscoding malnutrition cases in Medicare patients as cases of kwashiorkor. Already this year, the agency has reached settlements with Mercy Medical Center, in Des Moines, Iowa, and Christus Saint Vincent Regional Medical Center, in Santa Fe, N.M., over incorrect billing for kwashiorkor in a combined total of 217 patients who actually did not have the disease.

Kwashiorkor a form of severe malnutrition most often seen in children in developing nations during times of famine. It is very rare to see a case of Kwashiorkor in the United States, and especially in a Medicare patient, who is typically 65 or older. However, the adoption of electronic medical records has made it easier to up-code a protein deficiency diagnosis to code 260 for kwashiorkor, and this triggers a larger Medicare reimbursement than other forms of malnutrition.

Both Mercy Medical and Christus Saint Vincent deny that there was a financial motive to the coding mistakes, and in fact, for most of the claims, correcting the diagnosis code resulted in no change in the diagnosis-related group payment because the patients had other co-morbidities besides protein deficiency. Of the 115 claims Christus Saint Vincent miscoded as kwashiorkor, only 29 claims resulted in overpayments and the hospital is returning the $147,000 in overpayments to the government. Of the 102 claims Mercy Medical miscoded, only 14 claims resulted in overpayments, and it too is returning the overpayment amount of $89,000.

However, with Medicare paying more than $700 million in 2010 and 2011 for patients diagnosed with kwashiorkor, the OIG has made reviewing claims for kwashiorkor an official part of its 2014 workplan.