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What is a DRG downgrade?

What is a DRG downgrade?

EDITOR’S NOTE: During a recent Talk Ten Tuesday broadcast, listeners were asked “what percent of your claims are downgraded by third-party payers?” Downgrading by third-party payers occurs when the hospital-billed DRG is changed upon review by health insurance auditors to a lower-paying DRG.

What is a downgraded claim?

A downgrade or dental insurance downgrade occurs when insurance companies elect to pay for the least expensive procedure if there is more than one acceptable option.

What does downgrade mean in a hospital?

Status downgrades—which occur when a managed Medicare payer determines that a patient’s hospital visit doesn’t meet the medical necessity requirements for how it was billed—come in many forms, but there’s one kind that’s particularly troublesome for revenue cycles.

What is a DRG audit?

[2] DRG audits are performed by coding professionals who follow official coding guidelines as they evaluate the hospital claim against the medical record to substantiate coded elements such as principal and secondary diagnoses, surgical procedures, present on admission indicators and discharge disposition as documented …

What does coordination of benefits allow?

Coordination of benefits (COB) allows plans that provide health and/or prescription coverage for a person with Medicare to determine their respective payment responsibilities (i.e., determine which insurance plan has the primary payment responsibility and the extent to which the other plans will contribute when an …

How is the DRG determined?

DRGs are defined based on the principal diagnosis, secondary diagnoses, surgical procedures, age, sex and discharge status of the patients treated. Through DRGs, hospitals can gain an understanding of the patients being treated, the costs incurred and within reasonable limits, the services expected to be required.

What is the difference between clinical validation and DRG validation?

According to the Centers for Medicare and Medicaid Services’ (CMS) 2011 Recovery Audit Contractor (RAC) Statement of Work, “Clinical validation is a separate process [from DRG validation], which involves a clinical review of the case to see whether or not the patient truly possesses the conditions that were documented. …

Will secondary pay if primary denies?

If your primary insurance denies coverage, secondary insurance may or may not pay some part of the cost, depending on the insurance. If you do not have primary insurance, your secondary insurance may make little or no payment for your health care costs.

How do insurance companies determine coordination of benefits?

Health insurance plans have a coordination of benefits system when the member has multiple health plans. The health plan that pays first depends on the type of plan, size of the company and location. The two insurers pay their portions of the claim and then the member pays the rest of the bill.

What are the 3 DRG options?

There are currently three major versions of the DRG in use: basic DRGs, All Patient DRGs, and All Patient Refined DRGs. The basic DRGs are used by the Centers for Medicare and Medicaid Services (CMS) for hospital payment for Medicare beneficiaries.

What does DRG rate mean?

Diagnosis-Related Group Reimbursement. Diagnosis-related group reimbursement (DRG) is a reimbursement system for inpatient charges from facilities. This system assigns payment levels to each DRG based on the average cost of treating all TRICARE beneficiaries in a given DRG.

What are DRG audits?