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Common Minimum Data Set coding mistakes can lead to financial peril

This statement will come as no shock to skilled nursing facility (SNF) billers: Inaccurate Minimum Data Set (MDS) coding may result in a significant loss of revenue to your organization. But if you don't know the most common MDS errors, you may be throwing away reimbursement that your facility earned without even realizing it.


Common coding errors on the MDS definitely affect a SNF's reimbursement, said Ronald A. Orth, RN, NHA, RAC-C, owner and president of Clinical Reimbursement Solutions, LLC, in Milwaukee.


And not only does it affect your Medicare reimbursement, more than half of the states in the country base Medicaid reimbursement on the MDS, Orth told an audience during the National Association of Directors of Nursing Administration annual conference in St. Louis in June.


What are the most common MDS errors that billers and staff who complete resident assessments should be aware of? Audits conducted by CMS as part of the Data Assessment and Verification (DAVE) project pointed to the following four problem areas:


1. Activities of daily living (ADLs). "That's the number one area they found. It's probably the area that affects you the most in terms of reimbursement," said Orth. The audits point to the following problems:


  • Lack of documentation to support the coding
  • MDS coding that is not supported by documentation in the medical record
  • Undercoding of the ADLs

2. Therapy days/minutes. "We need to look at how we get the therapy minutes from the therapy logs to the MDS, and [we] need to be sure that they are correct," Orth said. According to the audits, SNFs need to


  • review the process of how staff communicate therapy time
  • ensure good MDS coordinator/rehabilitation manager communication
  • require the rehab manager to sign the MDS as accurate

It's particularly important that facilities look at how well the MDS coordinator and rehab manager communicate. "I always say [that] they need to be married," Orth said. Because it's important to ensure that this section of the MDS is accurate, "my recommendation is that the rehab manager sign the MDS" to verify the days/minutes of therapy, he said.


3. IV fluids. Coding of this item on the MDS changed in August 2005 and will most likely result in a decrease of extensive services counts, Orth said. Facilities need to code this item only if residents receive IV fluids for nutrition or hydration.


4. Physician visits and orders. Many SNFs confuse the directions in the Resident Assessment Instrument User's Manual, Orth said. Keep in mind the following when it comes to this area of the MDS:


  • The lookback period is 14 days
  • You must count actual days, not the number of physician orders or visits
  • It has the potential to greatly affect the Resource Utilization Group (RUG) level and reimbursement

An extensive problem

Just how big a problem is inaccurate MDS coding? A February audit report by the Office of Inspector General (OIG), A Review of Nursing Facility Resource Utilization Groups, provided some data. The audit looked at a random sample of 272 Medicare claims and found that 26% of the RUGs listed on the claims were different from the ones generated by reviewers based on evidence in the medical records. "That means one-quarter of the claims were inaccurately billed," Orth said.


Orth was surprised that the OIG found that 22% of the claims had RUGs higher than what the OIG reviewers determined, indicating that they were overcoded or overreimbursed. Orth saw more undercoding than upcoding when he audited facility MDSs. The OIG report indicated that 4% of the claims had RUGs lower than the OIG reviewers determined.


The OIG report concurred with the findings of the DAVE audits that therapy days and minutes and the ADLs are the biggest MDS coding problems for SNFs, said Orth. The OIG report listed the following contributors to assessment troubles:


  • MDS items that require a lookback period in which staff observe a resident over time
  • Instances in which multiple assessors (e.g., two or more staff) assess a resident
  • Instances in which staff make calculations

The financial impact

It is also the case that the MDS items most often inaccurately coded are some of the items with the most financial impact on a facility, Orth said. The MDS items with the most financial impact include the following:


  • ADLs (Section G)
  • Therapy services (Sections P and T)
  • Depression indicators (Section E)
  • Other items, such as



-respiratory therapy


Consider aphasia-the absence or impairment of the ability to communicate due to dysfunction of the brain. For example, say Mr. Jones receives tube feedings and has a diagnosis of aphasia, but MDS coding reveals that staff did not check aphasia on the MDS. Mr. Jones' RUG is clinically complex B1 (CB1), for which Medicare pays the facility $209.08 per day.


If staff check the aphasia diagnosis on the MDS, along with the tube feeding, Mr. Jones is now qualified for special care, assuming that he met the ADL requirement. The RUG score is special care B, and the facility receives $239.35 per day. Coding aphasia under Section I, Disease diagnoses of the MDS, has a significant effect on residents who are tube-fed-a difference of about $30 per day, Orth said.


Here's another example of how coding correctly for fever has a significant effect on reimbursement. Your facility treats Mrs. Yan for pneumonia. If she has a fever, she falls into the special care category, assuming that the ADL requirement is also met. Without a fever, Mrs. Yan is in the clinically complex RUG category. The difference in rates is $41.28 per day, which translates to $577.92 over a 14-day period.


Billers are often the last chance for a facility to detect miscoding or undercoding that can cost an organization revenue. In checking for mistakes, staff need to look at whether the MDS is accurate. Key areas to check include the most commonly miscoded MDS items and those that are the most costly if coded incorrectly.


The 11 most frequent MDS errors

The Office of Inspector General (OIG) identified the following 11 most common MDS errors:


1. Item P1bbB, occupational therapy, minutes

2. Item P1bcB, physical therapy, minutes

3. Item P1bbA, occupational therapy, days

4. Item P1bcA, physical therapy, days

5. Item G1aA, bed mobility, self-performance

6. Item G1aB, bed mobility, support provided

7. Item G1bB, transfer, support provided

8. Item G1iA, toilet use, self-performance

9. Item G1bA, transfer, self-performance 

10. Item G1iB, toilet use, support provided

11. Item G1hA, eating self-performance


Source: OIG report, A Review of Nursing Facility Resource Utilization Groups, February 2006.


Editor's note: This article was adapted from the August 2006 issue of Billing Alert for Long-Term Care.

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