IPPS DRG Adjustment

Under Inpatient Prospective Payment System (IPPS), adjustment requests are required from the hospital where errors occur in diagnoses and procedure coding that change the Diagnosis Related Grouper (DRG) or where the deductible or utilization is affected. If diagnostic or procedure coding errors are identified, a hospital is allowed 60 days from the payment notice date to submit adjustment bill(s). Adjustments reported by the Quality Improvement Organization (QIO) have no corresponding time limit and are adjusted automatically by Noridian without requiring the hospital to submit an adjustment bill. If diagnostic and procedure coding errors have no effect on the DRG, adjustment bills are not required.

If an adjustment to correct coding errors and to increase DRG payment is not received within 60 days from the payment date, no adjustment may be submitted. If the adjustment is to decrease the DRG payment and the 60 day timeframe has passed, providers must submit the claim with detailed remarks indicating the adjustment was created to repay Medicare a DRG overpayment.

Under IPPS, for long-stay cases, hospitals may bill 60 days after an admission and every 60 days thereafter, if they choose. For subsequent services, past the first 60 days, a provider must submit an adjustment to the original interim bill(s) to correct the from date indicated on the claim. In this case, the 60-day requirement for correction does not apply.

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Last Updated Dec 27, 2019