Diagnosis Related Group (DRG) Fraud – hospitals are paid a specified rate for each Medicare in-patient treated, based upon the diagnosis related group (DRG) assigned to each patient. The hospital is charged with the responsibility of assigning the correct DRG to an in-patient based on that patient’s discharge or principal diagnosis. The principal diagnosis is defined as “that condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care.” Different DRGs pay different rates. The total reimbursement rate per in-patient is determined by the DRG assigned to each in-patient and other geographical and hospital specific factors and relative weights. The DRG system is vulnerable to fraud and through DRG upcoding, where a provider falsifies the DRG to increase reimbursement.
Disproportionate Share Payments Fraud – these are additional payments made to hospitals that treat a disproportionate share of low-income patients, to offset losses from treating these patients. A hospital meets the threshold for DSH payment if its low-income patient share exceeds 15%. The low-income patient share is calculated by adding: (i) the proportion of a hospital’s Medicare inpatient days to the number of patients eligible for Supplemental Security Income benefits to (ii) the proportion of a hospital’s total acute inpatient days furnished to Medicaid patients. The formulas and criteria to determine the adjustment factor are complex and subject to manipulation, and therefore ripe for fraud.
DME Fraud – See Durable Medical Equipment Fraud in this Glossary.
DMERC (Durable medical equipment regional carrier) – a Medicare carrier contracted to process and review claims for durable medical equipment, prosthetics, orthotics, and supplies including parental/enteral feeding supplies. See Durable Medical Equipment Fraud in this Glossary.