Vidant Medical Center Incorrectly Billed Medicare Inpatient Claims with Severe Malnutrition

Vidant Medical Center (the Hospital), in Greenville, North Carolina, complied with Medicare billing requirements for diagnosis codes 261 and 262 for 11 of the 100 claims that we reviewed. However, the Hospital did not comply with Medicare billing requirements for the remaining 89 claims. For two of these claims, the medical record documentation supported a secondary diagnosis code other than 261 or 262, but the error resulted in no change to the diagnosis-related group or payment. For the remaining 87 claims, the billing errors resulted in net overpayments of $402,000. These errors occurred because the Hospital used diagnosis code 261 or 262 when it should have used codes for other forms of malnutrition or no malnutrition diagnosis code at all. On the basis of our sample results, we estimated that the Hospital received overpayments of at least $1.4 million over 2 1/2 years.