All Entries Tagged With: "observation status"

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.

Bill will allow observation time to count towards three-day SNF requirement

Joe Courtney (D-CT) has introduced a bill (HR 5950) in the House of Representatives that will allow observation stays that exceed 24 hours count towards the three-day inpatient hospital stay required for Medicare coverage in a SNF. A similar bill will be introduced in the Senate

In support of the new legislation, Rick Pollack, American Hospital Association (AHA) executive vice president sent a letter to CMS which highlights changes to the Medicare inpatient only list, Medicare billing policy, and Medicare audits, that have led to the increase in extended observation stays.

Improvements in medical technology have allowed more procedures to be performed in the outpatient setting, and as a result CMS has removed many medical services from the inpatient only list. This means that more patients require observation services to ensure that they are stable and safe to discharge, the letter states.

The AHA also cited a change in CMS’ billing edits as a reason for more extended observation cases. In 2006 CMS eliminated a claims-processing edit that rejected outpatient claims containing more than 48 hours of observation services. According to the AHA, many hospitals eliminated their internal edits which allowed the claims to be submitted.

Hospital leaders also use observation services to avoid jumping through Medicare policy hoops. The AHA noted that the process required to change an inpatient admission to observation services using condition code 44, is too elaborate and many physicians will err on the side of assigning observation services to avoid it. “The administrative burdens and financial consequences associated with [recovery audit contractor] audits, and subsequent appeals, have caused hospitals and physicians to exercise greater caution when admitting patients for inpatient stays.”

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.

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.

Listen to expert interpretation of Condition Code 44 regulations

Condition code 44 is one of those topics that never goes away.

• Can we use condition code 44 if the physician has already written the discharge order?
• Can we use condition code 44 if the attending physician doesn’t concur with the utilization review committee?
• Can we use condition code 44 to change inpatient time to observation services?

For whatever reason questions like these continue to come up. Perhaps it’s the vaguely-worded regulation or the conflicting advice found on the internet. Whatever it is, people are confused.

We at HCPro were thinking that because condition code 44 is such a contentious and confusing topic perhaps a written article is not the best way to explain it. That’s why we decided to call in the experts (Kimberly Anderwood Hoy, JD, CPC, the director of Medicare and compliance for HCPro, Inc and Sandra McCune BSN, RN utilization management specialist) for a 90-minute audioconference that will hopefully put all your condition code 44 concerns to bed.

How and McCune will share their interpretation of the rule using the official guidance provided by CMS. The program includes a 30-minute question and answer portion that will give you the chance to get your burning condition code 44 question addressed by our experts.

Take a listen to the following audio clip I recorded with Kimberly Hoy. In it, she explains why it is important for folks to listen to the program and highlights some of the important information the audience will take away.

If you like what you hear head over to the HCMarketplace and sign up for the program, Condition Code 44 and the Utilization Review Committee: Ensure Process and Documentation Compliance.

Condition code 44 – The continuing saga

On August 28, CMS issued Medicare Claims Processing Manual (MCPM) transmittal 1803, which is the October 2009 update to the Outpatient Prospective Payment System (OPPS). CMS included minor revisions to those sections of Chapter 1 of the MCPM that relate to condition code 44.

As you will recall, condition code 44 is used when a patient’s initial inpatient status is successfully changed to outpatient for purposes of billing and payment. This generally occurs when case management and other utilization review personnel were not available (weekends and holidays) at the time that the admission decision was made, and it is later determined that the patient does not meet Medicare’s inpatient guidelines. Condition code 44 is reported on the subsequent outpatient (013X) type of bill that is submitted to recover for the services provided in the inpatient setting.

Those inpatient services are covered and reimbursed on the same terms and conditions as if they actually had been provided in the outpatient setting, so long as all of the following criteria are met:

• The decision to change status must be made by the hospital’s “utilization review committee” (UR committee). One “member” of the UR committee can make the decision, with the attending physician’s agreement; in all other cases, the decision must be made by at least two “members.” The change in status must be made prior to discharge or release of the patient and before the hospital has submitted a claim for the inpatient admission;
• A physician must concur with the decision;
• The physician’s concurrence must be documented in the patient’s medical record; and
• The UR committee must provide written notice to the hospital, the patient and the patient’s physician within two days (but not later than the patient’s discharge or release from the hospital) of the change and its impact on the patient, including financial liability for applicable deductible and coinsurance amounts.

In the transmittal issued on August 28, CMS stated that although one physician member of the UR committee is empowered to make the decision to change status, the physician member who makes the decision must be different from the concurring physician, who is the physician responsible for the care of the patient. Based upon this most recent statement, it is not clear what the effect would be if the physician responsible for the care of the patient did not concur with the change in status.

The regulations that set out the hospital’s conditions of participation (CoP), which call for the establishment of a UR committee, along with the scope of its responsibility and authority (including change of status), indicate that, in all other circumstances, the change in status decision must be made by two members of the UR committee. Presumably, this is the procedure that a hospital should follow if it were unable to obtain the agreement of the patient’s physician to change the status of care from inpatient to outpatient.

Hospitals are encouraged to have at least two signatures on the documentation for the change in status: (1) when the attending physician concurs, signatures of both the attending physician and the physician member of the UR committee who made the change in status decision; or (2) when the attending physician does not concur, signatures of the two physician members of the UR committee who made the decision to change status.

Hospitals are also encouraged to confirm with their FI/MAC that the process as outlined above, particularly when the patient’s physician does not concur, meets the requirements of a condition code 44 change in status.

Editor’s note: This article was written by Judith Kares, an, instructor for HCPro’s Medicare Boot Camp – Hospital Version. It was originally published on the MedicareMentor blog. Read the original post here.

NGS statement on billing condition code 44

We have received many questions on the articles we have published on the counting of hours of observation in cases where condition code 44 is used to convert an inpatient to an outpatient after UR review.  A couple weeks ago I wrote about this issue following contact by a National Government Services representative, encouraging providers to contact their local MAC for more information.

I recently received some further clarification from National Government Services and wanted to update you.  As you know, I’ve advised that hospitals should not be counting the time between the inpatient order and the change to outpatient status as observation – rather, I said, the observation time should begin with the change in status to outpatient when the observation order is written (assuming the appropriate level of care). NGS’ recent clarification, confirmed to me in an email exchange, is as follows:

As you are aware, the recent regulation changes resulted in many questions.  We received confirmation from our CMS representative that indeed, a written order for observation status is required and that the inpatient stay can not be converted to observation time when CC 44 is applicable.  If the physician (or UR committee in conjunction with the physician) deems the patient meets observation criteria after conversion to outpatient status, then observation time may be billed if the level of care is met.  But observation time would begin when the order is written; and the previous (although incorrect) inpatient time could not be billed as observation. The services rendered while the patient was placed in inpatient status would be billed as outpatient services, but no observation time could be billed.

NGS is relying on their CMS central office contact for this clarification and not just their individual interpretation.  Therefore, if any of you have received conflicting advice from your MAC, I would encourage you to provide them with this information and continue to use caution in billing any hours of observation without a proper order for observation services.

Editor’s note: This article was written by Kimberly Anderwood Hoy, the director of Medicare and regulatory compliance for HCPro. It was originally published on the MedicareMentor blog. Read the original post here.

Manual changes related to condition code 44

I’d like to turn my attention to the manual changes related to condition code 44, as promised. Overall, the changes were designed to incorporate discussion and FAQs that were previously published in MLN Matters Article SE0622. In this respect, the changes to the manual have very few surprises. Almost everything added came directly from SE0622 and nothing added was really anything new. With that said, however, I do think that hospital case managers and anyone involved in condition code 44 cases or billing for cases with changed status should review the changes carefully to be sure they are following all the guidance provided.

One of the disappointing things about the changes is that they did not address the issue of whether the period of time from the inpatient order up to the time the patient is changed to outpatient and the observation order is written can be billed as observation time. The language stating that the entire episode of care should be billed as outpatient remains unchanged and nothing was added to clarify it. However, if we carefully consider the other changes made to the observation sections, I think we can discern that CMS does not mean for these hours of care to be billed as observation.

The statement that the entire episode be billed as outpatient would seem to be saying that any service that was rendered during the episode of care should be billed under the outpatient billing, coding and coverage rules. For instance, if the patient had an x-ray during the time prior to being changed to an outpatient, this x-ray would be billed on a revenue code line with a HCPCS code, in accordance with any outpatient edits and policies that might exist. An order for the x-ray would be required and it would be subject to the outpatient medical necessity coverage rules like any other outpatient x-ray.

Applying this same analysis to the observation services, they would be billed as outpatient services on a revenue code line for observation with the appropriate observation HCPCS code. To be billed to Medicare they would have to meet all the coverage and billing requirements, just like the x-ray. This is where the new changes to the observation section of the manual perhaps add a bit of clarity, though the issue is still not crystal clear. The revisions to Claims Processing Manual, Chapter 4 § 290.4.1, indicate that G0378 is used when observation services are “ordered and provided”, with the word “ordered” added. Additionally, revisions to Claims Processing Manual, Chapter 4 § 290.2.2 indicates that time is calculated from when the services are initiated in accordance with the physician’s order. Both of these changes emphasize that an order is required for the observation services to be billed, and seem to indicate that order must be received before time for the services can be counted. [more]

Update on case management protocol

In our last post on case management protocol, we said we were trying to reach CMS for a definitive answer as to whether case management protocol is an acceptable practice.

Since then, National Government Services (NGS), one of the largest Medicare contractors in the country, has released a statement in response to several providers asking it to sign off on a specific case management protocol.

The statement, dated April 22, 2009, states that CMS does not require NGS to approve of individual providers’ specific protocols, as approval by Contractors of individual policies might imply a predetermination of payment. NGS also says that RACs do not require a signed statement of approval or allowance of case management protocol, and this has been verified by CMS.

In regard to the compliance of a case management protocol, the statement cites CMS Publication 100-2, Chapter 6, Section 20.6, which states:

“Observation services are covered only when provided by the order of a physician or another individual authorized by state licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient tests.”

CMS Publication 100-2 Chapter 1, Section 10 states:

“An inpatient is a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services. Generally, a patient is considered an inpatient if formally admitted as inpatient with the expectation that he or she will remain at least overnight and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight. 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.”

NGS points out that a patient cannot be considered an inpatient until a physician has signed off on the admission order. Even if a standing order is written “admit to case management protocol”, patients will not receive inpatient status until the physician signs off on it. An example given by NGS is a patient admitted on a Sunday via case management protocol, but the physician doesn’t sign off on the order until Monday morning. In the example, the patient is not considered admitted as an inpatient until Monday morning.

This is something to keep in mind for facilities that have these types of written standing orders. If the patient admission is delayed until the physician signs off, it could have unplanned effects, such as the patient not qualifying for skilled nursing facility care due to the three-day qualifying stay rule.

However, there are some facilities that have made this protocol work for them. Keep an eye out for future stories in our monthly publication, Case Management Monthly.

Let us know how your facility successfully handles admissions and level of care status, whether with a case management protocol or other process.