The big news in trauma is the recent release of a long-awaited report from the U.S. Office of Inspector General (OIG) on improper billing for trauma team activations. The title of the report says it all:

Hospitals Charged CMS for Trauma Team Activations That Did Not Comply With Federal Requirements

In fact, the OIG’s headline finding is that hospitals billed Medicare approximately $2.4 billion in unallowable charges for trauma team activations over a 2.5-year-period. That’s close to $1 million dollars per designated trauma center.

Trauma program leaders are understandably concerned. The payment regulations governing trauma care in the U.S. are complex, and most trauma programs are eager to make sure their coding and billing practices are fully compliant.

On the other hand, given the under-funding of trauma in general, it is hard to accept the idea that the average trauma center is receiving hundreds of thousands of unearned reimbursement every year.

So what are trauma program leaders supposed to make of the OIG report?

First, we think it makes sense to thank the OIG for digging into this important issue. Trauma coding and billing are complicated, and nationwide there is a high variability in trauma team activation (TTA) fees. Setting TTA fees based on the actual cost of care is essential for ensuring fairness, sustainability and alignment with the realities of trauma system operations. Costs vary widely by region and a flat national fee would overcompensate some hospitals while underfunding others. Aligning fees with local costs ensures that trauma centers are reimbursed fairly for the resources they must maintain to meet verification standards. So any effort to shine a light on the gaps in the system is welcome.

Having said that, we should also be clear that the OIG analysis is based on a number of misconceptions about trauma care and misinterpretations of the trauma payment requirements of the Centers for Medicare & Medicaid Services (CMS).

Below, we’ll show where the OIG report provides helpful reminders, where it stumbles with the facts, and where it spotlights critical issues that need to be addressed by the entire trauma community.

The OIG’s six-point analysis

The main goal of the OIG investigation was to determine whether CMS paid hospitals for trauma team activations (TTAs) in compliance with federal requirements. To do this, the OIG conducted an audit of TTA claims with dates of service from January 1, 2020, through June 30, 2022.

According to the OIG report, the audit “covered 303,903 claims for trauma team activation”. However, it is important to note that only 125 claims were reviewed as part of this investigation. This limited sample size is insufficient to support statistically valid or generalizable conclusions.

The audit itself focused on six points:

“Was prior notification received by the hospital?” The OIG report correctly notes that in order to bill for a TTA using the revenue category 068X, a trauma center must receive prehospital notification of patient arrival.

“Did the hospital activate the trauma team?” The report also notes correctly that in order to bill using the 068X revenue category, the trauma team must be activated.

“Did the hospital activate the trauma team prior to patient arrival?” Covering another important requirement, the report notes that in order to bill under 068X, the trauma team must be activated before the patient arrives. While this is true, the report does not take into account an alternative, and fully compliant, method for capturing trauma activation charges. (More on that below.)

“Was the patient given treatment from the trauma team?” The OIG report frames this as a federal requirement, but in fact CMS regulations do not state that a patient who receives a TTA must ultimately be treated by a trauma team. In our opinion, this point gets to the heart of what a trauma activation actually is — the mobilization of specialized trauma resources in response to the reasonable expectation that a seriously injured patient will soon arrive. The TTA payment is reimbursement for the expense of maintaining these resources in readiness and mobilizing them when indicated.

“Did the patient require care from the trauma team?” Here, the report cites the principle that medical services must be reasonable and necessary, which is a general principle of CMS payment regulations. However, the nature of a trauma activation and TTA reimbursement is again misconstrued. A patient does not need to present with a life-threatening physical injury to warrant trauma team activation. Clinical evidence supports that a high index of suspicion alone is sufficient justification for initiating a trauma response.

“Did the hospital submit the claim with correct codes?” The OIG report rightly asserts the importance of correct coding and claims submission. This is a general requirement for all CMS claim submissions, not a unique requirement of trauma team activation billing. However, correct trauma billing is a common problem for hospital revenue cycle management teams.

Report identifies gaps in CMS trauma policy

While the intention of the OIG report was to put trauma center billing practices under the microscope, it actually shines a light on critical gaps in CMS trauma payment regulations.

For example, the report did not address instances where hospitals must activate trauma teams without prior notification — for instance, when critically injured patients arrive by private vehicle or are brought in by law enforcement. A common example is the pediatric patient brought directly to the ED by parents rather than through EMS. The patient arrives without advance field communication, but they still require an immediate trauma team response.

In these cases, the hospital must immediately mobilize the trauma team, consuming substantial resources, yet current billing guidance prevents appropriate charge capture for these unanticipated activations.

The OIG report also asserts that unallowable TTA charges “may have caused CMS to make incorrect outlier payments”.

As a bit of background, CMS provides hospitals with a mechanism to account for exceptionally high-cost cases through outlier payments, which apply when the cost of care exceeds a fixed threshold. In these cases, hospitals receive additional reimbursement beyond the standard DRG payment, reflecting the unusually high level of resources required for complex or critically ill patients.

It is common for trauma patients — who often require intensive procedures, prolonged hospitalizations, and multidisciplinary interventions — to exceed these cost thresholds and qualify for outlier adjustments. While the OIG acknowledged this pattern, it concluded that some cases receiving outlier payments were paid in error because they did not meet all CMS trauma charging criteria. This finding underscores an important policy and operational gap rather than evidence of provider error or intent.

In many such cases, hospitals appropriately activated full trauma response teams in accordance with their state-designated trauma protocols and incurred significant costs in delivering high-acuity, time-sensitive care. However, because current CMS guidance does not explicitly address these scenarios, hospitals lack clear direction on how to appropriately code, charge or reconcile these cases when a trauma activation occurs outside the narrow definitions of CMS billing criteria.

What trauma leaders should focus on now

In our opinion, the overall value of the OIG report is that it underscores the importance of complying with stated CMS guidance on trauma team activation and billing. Right now, we encourage trauma program leaders to:

Ensure trauma center designation. This point is so basic that it doesn’t seem to be worth repeating. However, there do seem to be a small number of hospitals without a trauma center designation that are nonetheless billing for trauma team activations. To be clear, a hospital can only bill for TTA if it has been designated as a trauma center by its state.

Master the “manageable complexity” of CMS billing. While trauma billing is complex, it is no more complicated than the average trauma patient. If you can master the complexities of a trauma resuscitation, you can understand CMS trauma payment requirements. The key points are:

Use your trauma flowsheets to ensure compliance. The findings of the OIG report underscore the importance of documenting compliance with CMS requirements. The easiest way to demonstrate compliance is through effective utilization of the trauma flowsheet.

Several trauma centers utilize the trauma flowsheet only for the highest level of activation, not for lower-tier trauma responses. We recommend that centers use a trauma flowsheet for each level of response. In addition, make sure your trauma program policies specify the team members and response requirements of each level of trauma activation/response. Clear policies will support accurate documentation and strong compliance.

Review and adjust TTA criteria annually. Above, we pointed out that there is no CMS regulation that says patients who receive a trauma activation must ultimately require care from the trauma team. It is often appropriate to both (a) activate the trauma team based on a high index of suspicion for serious injury and (b) downgrade the response once it becomes clear that the trauma team is not needed.

Having said that, trauma centers should conduct annual reviews of overtriage and undertriage rates. These reviews help ensure that your TTA policies align with clinical necessity. We suggest aiming for an undertriage rate of less than 5% and an overtriage rate of 25% to 50%.

This review can help ensure injured patients receive the care they need while also helping to reduce avoidable waste in the form of unnecessary imaging, labs and specialist involvement. It also supports compliance with billing requirements, since it helps ensure that TTAs meet clinical criteria to be considered medically necessary.

Institute a claim audit process. In addition to ensuring thorough documentation to support trauma billing, it is essential to institute a regular claim audit process. This practice helps verify that submitted claims align with billing guidelines, coding standards and payer requirements.

In addition to helping trauma programs maintain billing compliance, a robust claim audit process plays a critical role in minimizing denials and identifying patterns of error or missed revenue opportunities. By routinely reviewing trauma-related claims, organizations can proactively address discrepancies, reinforce staff education and enhance overall billing accuracy. This not only safeguards reimbursement but also strengthens the integrity of clinical and financial operations.

Support efforts to clarify trauma billing requirements. Since their inception in 2008, CMS coding guidelines for TTAs have remained unchanged, with no indication of imminent revisions. The scenarios discussed above and in the OIG report illustrate the disconnect between CMS billing policy and real-world trauma operations, leaving hospitals to absorb unreimbursed costs associated with maintaining readiness and providing rapid, multidisciplinary care.

Hospitals and trauma system leaders should continue to seek collaborative engagement with CMS to develop consistent, transparent billing and documentation standards that recognize the legitimate costs of trauma care while maintaining compliance with federal guidelines. The involvement of trauma leaders is essential to advocating for changes that balance compliance requirements with the operational realities of emergency care.

Here to help

We recently covered these and other issues during a special webinar on the trauma revenue cycle. To view that webinar on demand, visit:

Trauma Program Leaders: How to Talk So Revenue Cycle Will Listen

If you have any questions at all about trauma coding, billing and payment, please contact us any time. We are more than happy to provide any clarifications you may need.