Medical necessity: Don’t let documentation get away

During a recent consulting project at, I had the opportunity to observe the facility’s transition to an electronic health record (EHR).

Naturally there was apprehension throughout the facility as the countdown to “going live” approached in early June. Some of the staff nurses were concerned about learning how to navigate and chart under a totally new computer system.  After all, they were comfortable charting with the current paper system.

The nurses underwent a very intensive training program in preparation for the go live date.  However their documentation suffered during the first week of implementation, probably because of the learning curve that exists with a new computer system.

By the end of the first week, most nurses were beginning to appreciate the EHR’s added efficiencies and prompts.  Initial apprehension transformed into general enthusiasm for the new charting system.

Case manager’s dilemma

While the nurses’ conversion to the EHR documentation module seemed to progress smoothly, there is always a chance that improving upon one area of the healthcare delivery process will impacts another key aspect of healthcare delivery. Like an automobile engine, the healthcare delivery system has countless components that depend upon each other for smooth operations.  If one component fails, another component is impacted.

There is one major limitation that surfaced one week after the go live date when a case manager experienced an unexpected challenge.

A patient was admitted through the emergency department (ED) for observation services. She had relentless nausea and vomiting that began the day before she arrived at the ED. She ate fried fish at a local restaurant the night before. The physician’s initial thought was the patient had caught a mild case of food poisoning and ordered bowel rest and hydration. The patient began receiving IV fluids and IV Zofran in the ED, which continued when she moved to the floor.

After the first day of hospitalization, the physician determined that the patient was not stable for discharge. He wrote an order to convert the patient to inpatient and consulted gastrointestinal specialists. Upon further questioning the patient reported similar nausea and vomiting over the course of the last three months. The gastrointestinal specialists recommended performing an esophagogastroduodenoscopy (EGD).

The attending physician was reluctant to discharge the patient because of her continued nausea and vomiting despite the current medical management, and he elected to have the EGD performed while the patient was in the hospital. The case manager notified the patient’s insurance carrier for of the inpatient status and provided the clinical documentation. The insurance company denied the inpatient stay due to lack of medical necessity and decided to reimburse the entire stay as observation.

The Missing Link

The case manager and I thoroughly reviewed the record and agreed with the payer’s assessment of the clinical documentation. When reviewing the clinical documentation available to the case manager, the patient appeared to be relatively stable despite the physician’s orders for continued IV fluids and IV Zofran.

Like most physicians who write an order to convert a patient from observation to inpatient, the physician overlooked the need to explicitly document his clinical judgment and medical decision making for changing the patient status (e.g., the clinical information, diagnostic results and abnormalities, or clinical concerns that lead him to his decision).

The recovery audit contractors (RAC) focused on observation cases that were converted to inpatient status during the RAC Demonstration Project and will continue that focus under the Permanent RAC program. In this scenario, RAC denials typically state “no medical necessity found for inpatient status, should have remained observation, overpayment made by Medicare”.

After a quick conversation with the patient’s nurse, we found that the patient was not able to keep any food down after eating. Initially, the patient was NPO and then advanced to a liquid diet. The patient also complained of abdominal pain in the left lower quadrant. On a scale of one to ten, she rated her pain level an eight.

Unfortunately, these details were not clear in the electronic record’s documentation.  The case manager relayed the new information to the payer’s case manager and the payer reversed its initial decision to deny the case as an inpatient stay.

Fortunately, the patient’s nurse was available to provide additional clinical information. In larger hospitals with higher patient census, the case manager may not have the luxury or opportunity to confer with the patient’s nurse for additional information. The facts may be limited to the clinical information appearing in the record. That can put the case manager at a disadvantage when attempting to authorize inpatient stays.

Take Home Message

Given the economic climate, case managers are consistently fighting an uphill battle in demonstrating medical necessity for inpatient stays and successfully negotiating with payers for initial inpatient authorizations and continued stays. The clinical information available to the case manager to support medical necessity, is vital to insuring efficient use of healthcare resources

Complete, accurate, specific, and detailed clinical documentation spans gamut from the ED to the discharge summary. Let’s not forget nursing clinical documentation as part of establishment of medical necessity. The nurse is involved in the patient’s care, being the eyes and ears for the physician in the management of the patient’s care. Consider the following Q&A from First Coast Service Options, the Medicare MAC contractor for Florida:

Q: Regarding medical necessity, is nursing documentation that isn’t reflected in the physician’s documentation sufficient to satisfy criteria that establishes inpatient status, or is physician documentation along with diagnostics the only elements taken into account?

A: The entire medical record is reviewed and taken into account. The medical review analyst considers any pre-existing medical problems or extenuating circumstances that would make the admission/treatment medically necessary or reasonable.

Hospitals that use EHR, should ensure that complete objective nursing clinical documentation can be readily found in the record. Hospitals that are moving toward an EHR should prepare and train nurses in the effective use of computerized nursing documentation.  Take advantage of the opportunity collaborate with clinical documentation improvement (CDI) specialists at your facility. CDI specialists appreciate the opportunity to work in tandem with case managers to affect a positive change in physician documentation patterns.

Good luck!