Regulatory Bulletins

Bulletin 11 – April 2021 Livanta New Contract Announcement

 BFCC-QIO National Claim Review Contract Awarded for Short Stay and Higher-Weighted Diagnosis Related Group (HWDRG) Claims


Livanta, a Centers for Medicare & Medicaid Services’ (CMS) Beneficiary and Family Centered Care – Quality Improvement Organization (BFCC-QIO), announced this week that it was awarded the national contract for two types of reviews of claims paid under Medicare Part A:

  • hospital inpatient admissions of short duration; and
  • claims in which hospitals paid under the Prospective Payment System re-submitted inpatient claims for a higher payment than what they had billed initially.

Short Stays and HWDRG Reviews Background

Over the years, different Medicare auditors have performed these types of reviews. Two BFCC-QIO contractors, Livanta and Kepro, have conducted Short Stay reviews since 2015 and HWDRG reviews since 2014. Livanta will now re-initiate these Short Stay and HWDRG reviews across all jurisdictions, throughout the entire country.


Part A Claims Reviews[1]

Through Sept 2015

–       Medicare Administrative Contractors (MACs) performed initial patient status reviews.

Oct 2015 to May 2016

–       QIOs begin conducting initial patient status reviews of providers to determine the appropriateness of Part A payment for short stay inpatient hospital claims.

May 2016

–       CMS paused the BFCC-QIOs reviews to re-clarify the rules and to promote consistent application of medical review.

Sep 2016 to May 2019

–       BFCC-QIOs resumed initial patient status reviews of short stays in acute care inpatient hospitals, long-term care hospitals, and inpatient psychiatric facilities.

May 2019

–       CMS paused Short Stays and HWDRG reviews to procure a single BFCC-QIO contractor to perform reviews on a national basis.[2]

Livanta will continue to provide case review services on behalf of Medicare beneficiaries for Regions 2, 3, 5, 7, and 9, with Kepro continuing to work on the remainder of the regions.

I. What to Expect from Livanta’s BFCC-QIO Claim Review?

Livanta will begin performing two types of reviews:

  • Short Stays Reviews (formerly known as “2-Midnight Rule Reviews”): these reviews are for hospital inpatient stays of less than 2 midnights. Livanta will evaluate these cases “to ensure that the patient’s admission and discharge were medically appropriate based on the documentation of the patient’s condition and treatment rendered during the stay, and that the corresponding Part A Medicare claim submitted by the provider was appropriate.”[3]
  • HWDRG Reviews: Livanta will review inpatient stays claims where the hospital resubmits the claim with a higher weighted DRG code as a correction to the initial claim. The goal of these reviews is to help: “ensure that the patient’s diagnostic, procedural, and discharge information is coded and reported properly on the hospital’s claim and matches documentation in the medical record.”[4]

Among the various auditing activities it will perform, Livanta will be required to select case samples via claim analysis, issue determination notices, and issue demand notices and claim adjustments. Providers can also expect educational support regarding billing errors, as well as outreach by Livanta to providers in its efforts to safeguard against fraud, waste, and abuse of the Medicare Trust Fund.

II. How Long Will Livanta Hold this Contract and Across How Many Jurisdictions?

The new BFCC-QIO contract was awarded to Livanta for 4 ½yrs (54-months). While Livanta previously shared this contract with Kepro, splitting jurisdictions until 2019, the new contract awards Livanta sole responsibility across all 50 states, 5 United States territories, and the District of Columbia, allowing for the implementation of uniform review processes, as well as consistent oversight and protection of the Medicare Trust Fund.

III. How to Prepare?

Livanta will review claims for care provided in acute care facilities, psychiatric, and long-term acute care (LTAC) hospitals.

Preparing for a claim review of a Short Stay inpatient admission (i.e., 2-Midnight Rule Review):

  • Ensure the documentation is sufficient to support the medical necessity of the beneficiary’s inpatient stay based upon:
    • Documentation of the patient’s condition;
    • Treatment rendered during the stay;
    • Clear documentation of the beneficiary’s “start of service” as this may not be apparent to Livanta through the administrative data used to identify cases for review;
    • Clear documentation of the beneficiary’s “start of service” at the referring hospital if a beneficiary is received in transfer from another facility;
    • Clear evidence of “recovery faster than expected” if this applies to a case; and
    • Review of the corresponding Part A Medicare claim submitted to ensure accuracy.
  • Livanta may be aware of certain “exceptions” to the “time requirements,” including beneficiary death, transfer to another hospital, discharge Against Medical Advice (AMA), and hospice election, but it will require clear chart evidence to support the national exception of new onset mechanical ventilation.

Preparing for a HWDRG claim review:

Hospitals should review their CDI/Coding program processes and should:

  • Anticipate a request for medical records that focuses on the patient’s condition upon initial admission;
  • Ensure all supporting documentation of complicating conditions affecting the patient’s treatment is included, especially if omitted on the initial claim;
  • Review that the patient’s diagnostic, procedural, and discharge information coded and reported on the initial claim matches documentation in the medical record.

Note: Hospitals with post-billing CDI/Coding audit and re-billing programs may be at higher risk of audit.

Remember that effective October 2020, CMS required healthcare providers to send records electronically to the BFCC-QIO. Additional guidance regarding the electronic submission options available to providers can be found here: Livanta QIO TO3.

For detailed information regarding the scope of Livanta’s claim review, additional information is available via the Livanta QIO website as well as Livanta’s Provider FAQ.

IV. Recommendations

With the announcement of a new national contractor to perform Short Stay reviews, now both CMS and the OIG have initiated a new phase of oversight of the 2-Midnight Rule for short stay inpatient admissions.

Hospitals should ensure that they have a robust 2-Midnight admission review program in place that provides ongoing monitoring of compliance with the 2-Midnight Rule and revenue integrity and ensures accurate and appropriate coding by utilizing pre-bill DRG programs.

Versalus Health provides both a program to monitor compliance and revenue integrity and a pre-bill DRG program. Versalus Health can also help your organization assess your compliance with both these requirements.



[1] Centers for Medicare & Medicaid Services, Inpatient Hospital Reviews. Retrieved from: Access April 15, 2021.

[2] May 2019, Quality Improvement Organizations, QIO News. Retrieved from: Access April 15, 2019.

[3] Livanta, Short Stay Review. Retrieved from: (April 16, 2021)

[4] Livanta, Higher Weighted Diagnostic Review Group (HWDRG) Review. Retrieved from: (April 16, 2021)

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