Presented below is an analysis of new and ongoing initiatives under the Office of the Inspector General (OIG) Work Plan [1] and Centers for Medicare & Medicaid Services (CMS) approved Recovery Audit Contractor (RAC) reviews [2] as of January 2026. The focus is on inpatient initiatives related to HIM coding and documentation requirements and is not intended to review every active work plan item. For each relevant initiative, a summary of the compliance concern, the month and year of the initiative and related coding and documentation requirements is included. More importantly, for each inpatient initiative presented, UASI has included specific suggested compliance activities to assist our clients with their ongoing compliance efforts.

The Office of the Inspector General’s (OIG) work plan process is dynamic and changes are made throughout the year. This allows the OIG to meet priorities and react to emerging issues. The OIG work plan website is updated monthly. While there are many topics on the work plan, the majority do not apply to coding and documentation.

The information below includes an analysis of the following active inpatient topics:

• Inpatient Claims for Neurostimulator Implantation Surgeries (OIG)
• Vitamin D Assay Testing: Medical Necessity and Documentation Requirements (RAC)
• Inpatient Hospital MS - DRG Coding Validation (RAC)

Inpatient Claims for Neurostimulator Implantation Surgeries

Certain medical devices such as neurostimulators may be implanted during an inpatient procedure. Medicare covers the initial implantation and replacements or revisions to the device. Hospitals must meet Federal requirements for neurostimulator implantation surgeries to be covered by Medicare.

Currently, CMS requires prior authorization for outpatient neurostimulator implantation surgeries, but not for inpatient neurostimulator implantation surgeries. Prior authorization helps CMS ensure that applicable requirements are met before the services are provided. CMS’s lack of prior authorization for inpatient neurostimulator implantation surgeries may leave this area vulnerable to potential improper payments.

CMS covers certain inpatient neurostimulator implantations under its National Coverage Determination (NCD) 160.7 for Electrical Nerve Stimulators, with specific conditions central nervous system devices.

The implantation of central nervous system stimulators may be covered as therapies for the relief of chronic intractable pain, subject to the following conditions:

1. Types of Implantations

There are two types of implantations covered by this instruction:

• Dorsal Column (Spinal Cord) Neurostimulation - The surgical implantation of neurostimulator electrodes within the dura mater (endodural) or the percutaneous insertion of electrodes in the epidural space is covered.
• Depth Brain Neurostimulation - The stereotactic implantation of electrodes in the deep brain (e.g., thalamus and periaqueductal gray matter) is covered.

2. Conditions for Coverage

No payment may be made for the implantation of dorsal column or depth brain stimulators or services and supplies related to such implantation, unless all of the conditions listed below have been met:

• The implantation of the stimulator is used only as a late resort (if not a last resort) for patients with chronic intractable pain;
• With respect to item a, other treatment modalities (pharmacological, surgical, physical, or psychological therapies) have been tried and did not prove satisfactory, or are judged to be unsuitable or contraindicated for the given patient;
• Patients have undergone careful screening, evaluation and diagnosis by a multidisciplinary team prior to implantation. (Such screening must include psychological, as well as physical evaluation);
• All the facilities, equipment, and professional and support personnel required for the proper diagnosis, treatment training, and follow up of the patient (including that required to satisfy item c) must be available; and
• Demonstration of pain relief with a temporarily implanted electrode precedes permanent implantation.

UASI Suggested Compliance Activities

• Develop policies and procedures related to medical necessity verification, pre-service eligibility checks and ABN (Advanced Beneficiary Notice) workflows.
• Work with CDI (Clinical Documentation Improvement) to ensure that documentation supports medical necessity.

Vitamin D Assay Testing: Medical Necessity and Documentation Requirements

Although it is not the active form of the hormone, 25-OH vitamin D is much more commonly measured because it better reflects the sum total of vitamin D produced endogenously and absorbed from the diet than does the level of the active hormone 1,25-dihydroxy vitamin. 25-hydroxyvitamin D [25(OH)D] testing will be considered medically reasonable and necessary for individuals at risk for deficiency with the following conditions:

• Chronic kidney disease (CKD) stage III or greater
• Cystic Fibrosis (CF)
• Cirrhosis
• Crohn’s disease
• Gastric bypass/bariatric surgery
• Granuloma forming diseases
• Hyperalimentation
• Hypocalcemia
• Hypercalcemia
• Hypercalciuria
• Hypervitaminosis D
• Hypovitaminosis D
• Inflammatory bowel disease
• Long term use of medications known to lower vitamin d levels: anticonvulsants, antiretroviral therapy, glucocorticoids, antifungals, and cholestyramine
• Parathyroid disorders
• Paget’s disease of bone
• Obesity, if Body Mass Index (BMI) ≥ 30 kg/m2
• Obstructive jaundice
• Osteomalacia
• Osteopenia
• Osteoporosis
• Osteosclerosis/petrosis
• Pregnant and lactating women
• Radiation enteritis
• Rickets
• Vitamin D deficiency on replacement therapy related to a condition listed above, to monitor the efficacy of treatment

Deficiency of 1,25-dihydroxy vitamin D, which is present at much lower concentrations, does not necessarily reflect deficiency of 25-OH vitamin D and its measurement should be limited to specific clinical situations. It will be considered reasonable and necessary for patients with the following conditions:

• Unexplained hypercalcemia
• Unexplained hypercalciuria
• Suspected genetic childhood rickets
• Suspected tumor induced osteomalacia
• Nephrolithiasis
• Renal osteodystrophy
• Sarcoidosis

Once a beneficiary has been shown to be vitamin D deficient with a serum level of <30 ng/ml, a repeat test after 12 weeks of supplementation will be considered reasonable and necessary to ensure adequate replacement has been accomplished. The medical record must reflect that the beneficiary has been compliant with supplementation. A serum level of ≥30 ng/ml will be considered evidence of adequate replacement, and no further testing is necessary.

If, after a 12-week period of supplementation and documentation of compliance with the prescribed supplementation, the serum level is still <30 ng/ml 1 additional repeat testing within a rolling 12-month period of the initial test, may be performed.

Thereafter, annual testing may be appropriate depending upon the indication and other mitigating factors. The documentation must support the need for annual testing. Annual testing should be rare.

UASI Suggested Compliance Activities

Collaborate with CDI (Clinical Documentation Improvement) to ensure that documentation support medical necessity

Inpatient Hospital MS-DRG Coding Validation, February 2017

This topic remains on the UASI analysis as it is still an active RAC audit topic and there are ongoing audits related to MS-DRG Coding Validation. The background associated with this ongoing audit is noted below.

The OIG analyzed paid Medicare Part A claims for inpatient hospital stays from FY 2014 through FY 2019 and identified trends in hospital billing and Medicare payments for stays at the highest MS-DRG severity level. The number of stays at the highest severity level increased almost 20 percent from FY 2014 through FY 2019, ultimately accounting for nearly half of all Medicare spending on inpatient hospital stays. The number of stays billed at each of the other severity levels decreased. At the same time, the average length of stay decreased for stays at the highest severity level, while the average length of all stays remained largely the same. Specifically, nearly a third of these stays lasted a particularly short amount of time and over half of the stays billed at the highest severity level had only one diagnosis qualifying them for payment at that level. Shorter stays are not inherently problematic, but the number of these stays raises questions about the accuracy and appropriateness of the complications billed by the hospital.

Although the complications billed suggest sicker beneficiaries, the shorter lengths of stay point to beneficiaries who are less sick. Excluded from this analysis are certain stays that could be expected to be shorter, such as stays during which the beneficiary died. Furthermore, over half of the stays billed at the highest severity level in FY 2019 (54%) reached that level because of just one diagnosis. In total, nearly 2 million stays had just 1 diagnosis (i.e., 1 major complication/comorbidity) that qualified the stay for the highest severity level. The rest of the submitted diagnoses for these stays were either minor complications or not complications.

As a result of this analysis, CMS continues to conduct targeted reviews of MS-DRGs and hospital stays that are vulnerable to up-coding (i.e., those that are billed at the highest severity level) and the hospitals that frequently bill for them. Specifically, CMS targets stays at the highest severity level with certain characteristics, such as those that are particularly short lengths of stay or that have only one major complication. CMS also focuses on MS-DRGs that have a high proportion of stays with these characteristics and on the hospitals that frequently bill them. CMS’s RACs currently conduct coding validation reviews that incorporate some of these targeting strategies. [7]

In evaluating current audit plans, consider focusing on short stays, especially those with a single CC or MCC or a complex principal diagnosis (e.g., Sepsis, AKI, ARF). UASI also suggests targeting some of the following MS-DRGs for audit depending on your case mix and volume:

• MS-DRGs 064 – 066 Intracranial Hemorrhage or Cerebral Infarction
• MS-DRGs 193 – 195 Simple Pneumonia and Pleurisy
• MS-DRGs 280 – 282 Acute MI Discharged Alive
• MS-DRGs 291 – 293 Heart Failure and Shock
• MS-DRGs 308 – 310 Cardiac Arrhythmias and Conduction Disorders
• MS-DRGs 377 – 379 Gastrointestinal Hemorrhage
• MS-DRGs 637 – 639 Diabetes
• MS-DRGs 689 – 690 Kidney & Urinary Tract Infections
• MS-DRGs 870 – 872 Septicemia or Severe Sepsis
• MS-DRGs 981 – 983 Extensive OR Procedures Unrelated to Principal Diagnosis

Suggested Compliance Activities for All Initiatives

Select targeted MS-DRGs

• Evaluate the data for the top 20-25 MS-DRGs and review for any of the above indicators plus any additional MS-DRGs with high volume.
• Review the most recent PEPPER reports for MS-DRGs that may be at risk of improper payment. [8]
• Establish a prioritized list of MS-DRGs for review. If possible, review cases with short lengths of stay and one MCC/CC.

Develop an Audit Plan

• Establish an audit plan for concurrent and/or retrospective audits.
• Retrospective audits can be conducted in part or wholly by incorporating selected MS-DRGs into your audit plan. Problem MS-DRGs can then be incorporated into a concurrent review work queue, if warranted.
• Concurrent coding audits should be limited in scope to address specific areas impacting quality reporting and reimbursement. Timeliness is critical as these accounts are held for additional review prior to releasing the bill. Turnaround time to release cases should be short, 24 to 48 hours, to minimize the impact to DNFB (discharged not final billed) daily/weekly goals.
• Audits can be conducted either internally or externally. Internal audits should be conducted based on the availability of staff with appropriate technical expertise (in coding and clinical documentation) and proficiency in communicating feedback through written reports and educational sessions.
• Determine the audit scope, considering opportunities for cross-departmental collaboration to address multiple risk factors. For example, clinical documentation improvement (CDI) staff may collaborate with coding staff to conduct an audit on sepsis DRGs, addressing both coding and clinical documentation compliance perspectives.

At a minimum inpatient audit should measure and validate the following:

• Accurate identification of principal and secondary diagnosis and procedure codes in accordance with official and facility-specific coding guidelines
• Accurate MS-DRG or APR-DRG assignment
• Accurate POA indicator assigned for all non-exempt diagnosis codes
• Accurate Discharge Disposition assignment

Develop corrective action plans, including physician and coder education, based on audit findings.

Works Cited:

Office of Inspector General (OIG). (2026). Work Plan. U.S. Department of Health and Human Services. Available at: https://oig.hhs.gov/reports-andpublications/workplan/index.asp

Centers for Medicare & Medicaid Services. (2026). Approved Recovery Audit Contractor (RAC) Topics. Last revised March 15, 2026; accessed April 1, 2026. Available at: https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/Recovery-Audit-Program/Approved-RAC-Topics

Centers for Medicare & Medicaid Services. National Coverage Determination (NCD) for Electrical Nerve Stimulators (160.7). Available at: https://www.cms.gov/medicare-coverage-database/view/ncd.aspx? ncdid=240&ncdver=1&keywordtype=starts&keyword=Electrical%20Nerve%20st &bc=0

Centers for Medicare & Medicaid Services. Local Coverage Determination (LCD) for Vitamin D Assay Testing (L34658). Effective October 1, 2015; revised August 28, 2025. Available at: https://www.cms.gov/medicare-coveragedatabase/view/lcd.aspx? lcdid=34658&ver=36&keyword=Vitamin%20D&keywordType=starts&areaId=all& docType=NCA,CAL,NCD,MEDCAC,TA,MCD,6,3,5,1,F,P&contractOption=all&sortBy= relevance&bc=1