Flawed OIG report on trauma “overpayments” raises key issues

Authored by: 

Angie Chisolm, MBA/HCM, BSN, RN, CFRN, TCRN
President, Optimal Healthcare Advisors 

Gretchen Case, MPH, CPC
Founder and Managing Partner, The Wilshire Group 

The big news in trauma is the recent release of a long-awaited report from the U.S. Office of Inspector General (OIG) on improper billing for trauma team activations. The title of the report says it all: 

Hospitals Charged CMS for Trauma Team Activations
That Did Not Comply With Federal Requirements

In fact, the OIG’s headline finding is that hospitals billed Medicare approximately $2.4 billion in unallowable charges for trauma team activations over a 2.5-year-period. That’s close to $1 million dollars per designated trauma center. 

Trauma program leaders are understandably concerned. The payment regulations governing trauma care in the U.S. are complex, and most trauma programs are eager to make sure their coding and billing practices are fully compliant. 

On the other hand, given the under-funding of trauma in general, it is hard to accept the idea that the average trauma center is receiving hundreds of thousands of unearned reimbursement every year.

So what are trauma program leaders supposed to make of the OIG report?

First, we think it makes sense to thank the OIG for digging into this important issue. Trauma coding and billing are complicated, and nationwide there is a high variability in trauma team activation (TTA) fees. Setting TTA fees based on the actual cost of care is essential for ensuring fairness, sustainability and alignment with the realities of trauma system operations. Costs vary widely by region and a flat national fee would overcompensate some hospitals while underfunding others. Aligning fees with local costs ensures that trauma centers are reimbursed fairly for the resources they must maintain to meet verification standards. So any effort to shine a light on the gaps in the system is welcome. 

Having said that, we should also be clear that the OIG analysis is based on a number of misconceptions about trauma care and misinterpretations of the trauma payment requirements of the Centers for Medicare & Medicaid Services (CMS). 

Below, we’ll show where the OIG report provides helpful reminders, where it stumbles with the facts, and where it spotlights critical issues that need to be addressed by the entire trauma community. 

Read the full article on Trauma System News.