All Entries Tagged With: "inpatient status"

MAC settles long-running inpatient billing debate

Noridian Administrative Services LLC, Medicare administrative contractor (MAC) for Montana, North Dakota, South Dakota, Colorado, Utah, and Arizona, has put to rest the question of how hospitals should bill for patients who are improperly referred for observation services when they actually met inpatient criteria.

Noridian provided the answer as part of a list of inappropriate admission orders in a May 6 announcement. The example is as follows:

Initial observation order was determined at later point in time to have been inappropriate as patient should have been admitted as an inpatient. Order is written for inpatient care on different date than referral to observation. Since orders cannot be retroactive, the admission date is the date the inpatient order is written, even if patient could have been inpatient when the observation order was written.

Note: When an admission order is written but the patient status no longer supports the need for inpatient admission, the claim cannot be billed as an inpatient claim.

The statement not only confirms that hospitals cannot backdate inpatient orders, but also answers a longstanding question among hospital utilization review (UR) staff, says Kimberly Anderwood Hoy, Esq., CPC, director of Medicare and compliance at HCPro, Inc., in Danvers, MA.

Some believe that if a hospital discovers that a patient met inpatient criteria on admission but was referred to observation, an inpatient order can be written at later date, even if the patient does not meet inpatient criteria at the time. The hospital would then bill the charges incurred during observation as part of the inpatient stay, under the three-day rule.

For example, a patient admits to the hospital on Friday night. The patient meets inpatient criteria, but the attending physician refers the patient to observation. The patient remains an outpatient until Monday, when the case manager reviews the case and realizes that the patient would have met inpatient criteria on Friday night; however, the patient is now ready for discharge and doesn’t meet inpatient criteria. In this scenario, the Noridian memo indicates the hospital cannot write an inpatient order on Monday and bill the services performed over the weekend on an inpatient claim under the three-day rule, Hoy says.

“I think people have the backdating thing down, but I have had many people ask about this issue,” Hoy says. “They will say they only want to make the patient an inpatient as of Monday, but this is saying they can’t do that if the patient no longer meets inpatient criteria.”

CMS issues guidance on hospital inpatient admission decisions

Despite the loads of guidance CMS offers about proper inpatient admission decisions, it appears that hospitals still cannot get it right. In order to clear up any confusion CMS issued a special edition MLN Matters article that includes excerpts from several CMS manuals for guidance.

The release is timely. Medical necessity determinations have become a hot button for government auditors such as recovery audit contractors (RAC), Medicare administrative contractors (MAC), fiscal intermediaries (FI), and comprehensive error rate testing (CERT) contractors. Facilities that do not assign appropriate patient status risk losing reimbursement.

Commercial screening criteria

While commercial screening products such as Interqual and Milliman, may assist facilities in making patient status determinations, CMS explains in the release that such products are just one of several tools providers can use to make the call. The release includes an excerpt from the Medicare Benefit Policy Manual, which states, “The physician or other practitioner responsible for a patient’s care at the hospital is also responsible for deciding whether the patient should be admitted as an inpatient.” It further states:

The decision to admit a patient is a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient’s medical history and current medical needs, the types of facilities available to inpatients and to outpatients, the hospital’s by-laws and admissions policies, and the relative appropriateness of treatment in each setting. Factors to be considered when making the decision to admit include such things as:

• The severity of the signs and symptoms exhibited by the patient;
• The medical predictability of something adverse happening to the patient;
• The need for diagnostic studies that appropriately are outpatient services (i.e., their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more) to assist in assessing whether the patient should be admitted; and
• The availability of diagnostic procedures at the time when and at the location where the patient presents.

Staff education

Providers should use the Special Edition MLN Matters article to help educate physicians, case managers, and any other clinical staff involved in the decision-to-admit process, says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

In addition, Mackaman says coders and CDI specialists should use the article to identify potential documentation improvement areas. Auditors and compliance staff should also review the specific manual sections to ensure compliance with the regulations.

The release may also pose a challenge for providers that rely heavily on screening criteria, according to Deborah Hale CCS, CCDS, president and CEO of Administrative Consultant Service, LLC, in Shawnee, OK.

“Certainly one can understand the need for physician judgment to determine that an admission is unnecessary but to say that a hospital can’t depend upon screening criteria to determine that an admission is necessary becomes a challenge.”

To read the special edition MLN Matters article, click here: http://www.cms.gov/MLNMattersArticles/Downloads/SE1037.pdf

Editor’s note: HCPro Associate Editor Jimmy Carroll contributed to this article.

A 24-hour stay does not equal observation

After years of discussion and attention given to observation services and inpatient status, there are still those who believe all 24-hour hospitals stays should be observation. However, examples of legitimate 24-hour inpatient stays exist. Consider the following.

James presents to the emergency department (ED) with persistent nausea and vomiting that is unresolved with antiemetics administered in the ED. He also has tachycardia with occasional premature ventricular contractions, a serum potassium level of 7.8, and a history of end stage renal disease. James also missed his last dialysis appointment. This patient meets inpatient criteria because his potassium level is critically high and his nausea and vomiting are unresolved.

The physician orders IV fluids, telemetry monitoring, vital signs monitored every four hours, and dialysis. The patient undergoes dialysis later that day, and by the next afternoon his potassium level is 5.1 and his nausea and vomiting have subsided. The physician discharges James that afternoon. Just because James was in the hospital for only 24 hours doesn’t mean he did not need inpatient care. Based on the signs and symptoms presented, the severity of James’ illness, and the intensity of services he received, inpatient admission is appropriate.

I believe the confusion comes with the Centers for Medicare and Medicaid Services’ (CMS) definition of observation. CMS defines observation as specific, clinically appropriate services, which include ongoing short-term treatment, assessment, and reassessment, before a decision can be made regarding whether patients will require further treatment as hospital inpatients or whether they can be discharged from the hospital.  Physicians have taken this definition to mean that they need to try to predict if the patient will get better within 24 hours. Even if a patient meets inpatient criteria, physicians will make order observation services if they think he or she will get better in 24 hours. This is why so many hospitals end up with observation stays greater than 48 hours.

Communication from case management to the physicians is going to be the best method of clarifying this misconception for physicians. If your hospital has a physician liaison have him or her educate the physicians on the real definition of observation. We need to focus the patient’s clinical signs and symptoms and the physician’s documentation. Remember we cannot predict the future. Inpatient admissions are based on if the patient presents to the hospital with signs and symptoms and severity of illness that require the intensive services at that level.

It is time again to revisit this discussion with your physicians, administration, and your case management team. Do not be afraid to have these discussions with your physicians. Most physicians just want to take care of the patients and will admit that they do not really know when a patient should be observation versus inpatient, but is should not be based on hours in the hospital.

Remember it is the appropriate care, in the appropriate setting, in the most cost-effective manner.

Inpatient admissions decision fuels RAC uncertainty

Editor’s Note: This post originally appeared on the HCPro’s Revenue Cycle Institute website.

Recent approval of a RAC issue for inpatient hospital claims review has initiated uncertainty, thus putting an emphasized onus on providers to lean on CMS guidance and policy manuals.

The issue, “inpatient admissions without a physician’s inpatient admit order,” can be referenced in the Medicare Claims Processing Manual, Section 50.3 where it states that “patients are admitted to the hospital as inpatients only on the recommendation of a physician or licensed practitioner permitted by the State to admit patients to a hospital.” While the posting of this issue may have come as a bit of surprise, it has always been one of the basic premises of accurate billing, according to Deborah Hale, CCS, CCDS, president and CEO of Administrative Consulting Service, LLC in Shawnee, OK.

“There’s so much written in the Medicare Benefit Policy Manual stating that the decision to admit as inpatient is a complex medical judgment that can only be made after a physician has  taken into consideration a number of  clinical and safety factors,” she says. “It [the manual] stresses the importance of the physician making a conscious decision to admit as inpatient, and that is the foundation for everything in this process.”

One of the things that may confound facilities is the fact that many have dubbed it the first official medical necessity issue approved by CMS. While technically it may not be, and though some may argue this point, this new RAC issue is in fact consistent with establishing medical necessity for services provided, according to Hale.

“While this is technically not a medical necessity issue as most hospitals define medical necessity (i.e., the case may meet necessity for inpatient admission), if they don’t have an order, they don’t have a billable inpatient admission,” she says.

In addition to the medical necessity argument, a number of MACs have been providing information that is contrary and inconsistent to CMS guidance, according to Hale. One example of this is telling providers that the admit order can be rolled back if the patient was in observation first. Yet Hale points out that this is not in compliance with CMS. In fact, a CMS representative addressed the issue of rolling back an admit order during an Open Door Forum last fall, stating that: “The hospital cannot “roll back” the time or date of admission. If the inpatient stay began with the physician’s order at 8:00 a.m. on Tuesday and the patient was admitted directly from observation, the observation charges are included on the inpatient bill. Since the observation is included on the inpatient bill and paid as part of the DRG, there is no separate payment for observation.”

Providers receiving inaccurate or contrary information should contact their MAC in writing, and give them the appropriate references from CMS, the Benefit Policy Manual, or the Claims Processing Manual, and ask why their instruction is contradictory to CMS. “This will at least call for some accountability,” according to Hale.

“The number one thing I would say to providers is to be sure that you’ve got a properly worded order for admission, and number two, be sure that you’re not rolling the date of admission back” she says. “Also, be sure to have an internal process set up for looking at presence of a properly worded admission order and documented medical necessity of admission from the beginning of the stay, not just based on screening criteria, but also physician advisor review if screening criteria are not met.”

Using condition code 44 when physicians don’t agree

Soon after I read Transmittal 299, CR 3444, I spoke with the hospital’s medical director about creating a process to use Condition Code 44. He was intrigued, but as a physician he knew it would cause challenges for our medical staff.

We educated the medical staff about Condition Code 44’s meaning and carefully implemented a successful protocol. I won’t say that admitting physicians were happy when we approached them about changing patient status, but at least they understood why.

When I mention Condition Code 44 to compliance colleagues, they generally cringe and try to avoid discussing it. The culture in their institutions can evoke empathy. However, with increased scrutiny by Recovery Audit Contractors (RAC), Medicare Administrative Contractors (MAC), and Medicaid Integrity Contractors (MIC), we should revisit Condition Code 44 requirements.

Revision to Condition Code 44 instructions

During August 2009, CMS updated information (Medicare Claims Processing Manual, Chapter 1-General Billing Requirements, 50.3.1, Rev. 1803, Issued: 08-28-09, Effective: 10-01-09, Implementation 10-05-09) to help providers understand appropriate application of Condition Code 44:

“The conditions for the use of Condition Code 44, as stated in section 50.3.2 below, require physician concurrence with the UR committee decision. For Condition Code 44 decisions, in accordance with 42 CFR §482.30(d)(1), one physician member of the UR committee may make the determination for the committee that the inpatient admission is not medically necessary. This physician member of the UR committee must be a different person from the concurring physician, who is the physician responsible for the care of the patient”

Accurate use of Condition Code 44 assumes that a hospital has a utilization review (UR) plan. CMS reminds providers that:

“The hospital must ensure that all the UR activities, including the review of medical necessity of hospital admissions and continued stays are fulfilled as described in 42 CFR §482.30. The CoP standards in 42 C.F.R. §482.30 of the regulations are comprehensive and broadly applicable with regard to the medical necessity of admissions to the hospital and continued inpatient stays.”

Condition code 44 is a gift from CMS. Providers use it weekends, late at night, and other times when case management can’t review an admission in a timely fashion. CMS assumes that all Medicare admissions are reviewed before discharge and that Condition Code 44 is invoked when an admission doesn’t meet inpatient criteria.

Documenting disagreements

In order to use condition code 44, a UR physician must determine that an inpatient admission does not meet hospital criteria. The attending physician must agree that the patient status can be changed to outpatient while the patient is still in-house and before a claim is submitted.

If the attending physician does not agree with the change, the hospital may submit a 12x bill for covered ‘Part B Only’ services. Medicare may still pay for certain Part B services when an inpatient admission is not medically necessary.

When creating your Condition Code 44 protocol, consider how to proceed when the attending and UR physician do not agree on patient status. In my experience, a Part B claim for medically unnecessary admission that does not include the condition code 44 assignment may trigger an audit. In these instances, it is important that the UR physician and the attending physician clearly document their findings during the review process. CMS warns:

“Entries in the medical record cannot be expunged or deleted and must be retained in their original form. Therefore, all orders and all entries related to the inpatient admission must be retained in the record in their original form. If a patient’s status changes in accordance with the requirements for use of Condition Code 44, the change must be fully documented in the medical record, complete with orders and notes that indicate why the change was made, the care that was furnished to the beneficiary, and the participants in making the decision to change the patient’s status.”

It may be advantageous for your UR physician to document the specific criteria used to inform his or her decision. The UR physician should also be available to answer any questions the attending physician may have. The attending physician should note in the chart that UR physician offered the criteria and that the attending physician reviewed it. The attending physician should then document the outcome of that act.

It may also be useful to review your observation services policies with the attending physician who may not be as familiar with patient status assignment.

New Jersey QIO signs deal with Milliman

Healthcare Quality Strategies, Inc. (HQSI), the quality improvement organization (QIO) for New Jersey, is using Milliman Care Guidelines® or Medicare reviews, according to a Milliman press release.

HQSI is signed a five-year licensing deal with Milliman to use all of the Care Guidelines products for quality of care reviews:

• Ambulatory Care
• Inpatient and Surgical Care
• General Recovery Guidelines
• Recovery Facility Care
• Home Care
• Chronic Care Guidelines
• Behavioral Health Guidelines

CMS does not require QIOs to use any specific set of care guidelines for reviews.

Amy Kenter, director of case review at HQSI said that Milliman criteria will be applied to Medicare cases with admission dates on or after March 1, 2010. InterQual will be used for cases with an admission date prior to March 1.

According to Kenter, there are no circumstances in which both sets of criteria will be applied. Milliman will only be used for Medicare. InterQual will be used for Medicaid reviews.

Medicare helps beneficiaries understand level of care

In December 2009, CMS released an informative pamphlet for Medicare beneficiaries that explains how level of care determinations affect Medicare reimbursement.

The document, titled Are You a Hospital Inpatient or Outpatient? If You Have Medicare – Ask!, provides basic level of care information. The document uses common hospital scenarios to show the difference inpatient status and outpatient status and what that means to the patient’s wallet. The pamphlet also explains how level of care determination can affect the patient’s SNF coverage.

Beneficiaries also learn about their guaranteed rights and who they can contact if they have questions, concerns, or grievances.

The information may seem basic to most seasoned case managers, but it could be a useful educational tool for those who frequently explain level of care to patients.

Milliman is gaining popularity

The number of facilities using Milliman Care Guidelines® has grown eightfold from 116 in 2002 to more than 950 in 2009, according to a press release from Milliman, Inc.

The company to enhancements since 2002 including mproved care pathway tables xpanded patient education materials and integrated quality measures nhanced search, documentation and customization features in CareWebQI® interactive software.

Even with this uptick in popularity, Milliman remains in the shadow of a giant. InterQual is still the more popular screening criteria software. A recent HCPro survey revealed that, 82% of respondent facilities use InterQual. The survey also revealed that 10% of responding facilities have developed their own screening criteria, but that only 8% use Milliman.

On its Web site, Milliman describes itself as one of the world’s largest independent actuarial and consulting firms.

According to the American Hospital Association’s October 6, RAC Report, CMS said the RACs will try to evaluate a hospital’s claim by using the same product that the hospital used to make its decision.

The vendors for the commercial screening tools Interqual and Milliman have both provided their tools to the RACs at no cost. The RACs indicate that they may try to use both tools by matching a particular tool used for a RAC audit to the tool used by the corresponding FI, MAC or other claims processing contractor that processed the claim.

It seems unlikely that the RAC will take on such a tedious task of changing screening criteria according to a given hospital. However, the message that RACs are not exclusively using one product rings true. It appears that hospitals are listening, and have begun to stray from exclusively using InterQual.

Some facilities are following the RAC lead and use both InterQual and Milliman to validate medical decisions. Because of the limited options on the survey question, it is plausible that participants chose “Our facility has developed its own screening criteria” to express their facility uses both.

Medicare deductibles and coinsurance for CY 2010

Editor’s note: Judith Kares, JD, CPC, regulatory specialist for HCPro, Inc., wrote the following post. It was originally published on the MedicareMentor blog. Read the original post here.

CMS recently published the Part A deductible and coinsurance and Part B deductible amounts for CY 2010.  For most covered inpatient stays, as well as covered outpatient services, Medicare does not pay the entire Medicare allowable for those stays or outpatient services.  Beneficiaries generally are responsible for a portion of the Medicare allowable in the form of deductibles and/or coinsurance.

Under Part A, Medicare beneficiaries are entitled to 90 regular benefit days per benefit period. Regular benefit days renew whenever a new benefit period begins.  That is, a patient once again has 90 covered inpatient days every time a new benefit period begins.  Medicare beneficiaries are also entitled to 60 lifetime reserve days, which may be used after regular benefit days for that benefit period have been exhausted.  Lifetime reserve days do not renew.  Once used, they are gone forever.

A benefit period begins with the first day on which a patient is admitted to an inpatient hospital or a SNF to receive services.  That benefit period continues until there is a 60-consecutive-day period during which the patient is not an inpatient in either a hospital or a SNF.  (With respect to the latter, the benefit period does not close as long as the patient is receiving skilled care as an inpatient in the SNF.)

For the first 60 covered inpatient days during a benefit period, the beneficiary is responsible for one inpatient deductible.  The applicable inpatient deductible is the one in effect during the calendar year in which that benefit period begins.  For inpatient covered days 61-90, the beneficiary is responsible for a daily coinsurance amount equal to 25% of the applicable inpatient deductible.  If a beneficiary exhausts (uses up) his regular benefit days, he may then draw upon any remaining lifetime reserve days.  For each lifetime reserve day, the beneficiary is responsible for a daily coinsurance amount equal to 50% of the applicable inpatient deductible. With respect to the coinsurance calculation, the coinsurance amount is based on the deductible applicable for the calendar year in which the coinsurance days occur.

The following is an example of how these rules would apply to an inpatient stay that begins in December of one year (2009) and ends during the following year (2010):

Assume that this was the first inpatient admission during the benefit period and that the beneficiary remained in the hospital for 61 covered days.  Because the benefit period began in 2009, the deductible for 2009 (the year in which the benefit period began) would be applied, in the amount of $1068.00.  This is the only amount for which the beneficiary would be liable for the first 60 covered days.  He would then be responsible for an additional single day’s coinsurance for day 61, in the amount of $275.00, which is the coinsurance amount for covered days occurring during 2010.  Thus the beneficiary’s total liability for this stay would be $1343.00.

Hospitals are advised to assure that applicable deductible and coinsurance amounts are applied to each inpatient stay, particularly those that cross over from one calendar year to another.

Possible MIC audit issues that involve case management

Editor’s Note: This post was excerpted an article on the Revenue Cycle Institute Web site.

There’s no question that audit activity is escalating.

It’s no longer just RAC, MAC, CERT, and ZPIC audits looking to ensure the accuracy of Medicare payments. Providers are also subject to increased scrutiny on the Medicaid side, as states are working with the federal government to help reduce payment error rates and recoup overpayments.

The scrutiny comes in the form of Medicaid Integrity Contractors (MICs), who will begin auditing providers in all states by the end of 2009.

What will MICs be auditing? It will vary from state to state, of course. But James G. Sheehan, the Medicaid Inspector General for New York, listed several issues he expects the MICs will audit during the October 15 HCPro audio conference, “Medicaid Integrity Contractor Audits: Know What to Expect and How to Prepare.”

The following are some of the potential MIC audit issues Sheehan listed that case management staff members should be aware of:

• Heart failure and shock. For this issue, MICs will look for failure to meet InterQual criteria for inpatient care.
• Ambulatory surgery with no complications to justify inpatient stay. “Commonwealth Fund just came out with a ranking of the states on this issue, and some states are better than others. It may not be a bad idea to find out where your state stands and whether this will be an issue,” Sheehan says.
• Observation beds. This is always a popular issue because Medicaid rules differ by state and also differ from Medicare in most states, explains Sheehan.

Editor’s note: Sheehan and Sarah Kay Wheeler, partner at King & Spaulding LLP in Atlanta spoke during the October 15 HCPro audio conference, “Medicaid Integrity Contractor Audits: Know What to Expect and How to Prepare.”

For additional background information view the April 22, 2009 GAO report “Improper Payments: Progress Made but Challenges Remain in Estimating and Reducing Improper Payments,” visit the GAO Web site.