All Entries Tagged With: "observation status"

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.

More Condition code 44 advice

This week’s tip, an “Ask the Expert”, was submitted by a Case Management Weekly reader, and answered by Kimberly Hoy, Esq, regulatory specialist for HCPro.

Q: The tip of the week in the April 15 issue of Case Management Weekly addressed use of condition code 44, which has specific guidelines. If the CM or utilization review (UR) nurse and the attending physician agree that the patient’s status should have been observation and the attending physician is ready to discharge that patient, there is insufficient time to process it through the UR committee to obtain another approval if we are trying to comply with code 44 guidelines by writing the order prior to discharge. How should we handle this?

A: Condition code 44 requires a UR committee determination that a patient’s status should be changed from inpatient to outpatient, even if the attending physician is in concurrence. A representative of the committee may make this determination. However, the CM and UR nursing staff are not considered members of the UR committee for purposes of the Conditions of Participation (CoPs) so they may not be considered representatives of the UR committee. That leaves you in a very difficult position in the scenario you describe in which CM/UR nursing staff determines very close to the time of discharge that the patient’s status should have been observation.

Even though the attending physician agrees, condition code 44 and the CoPs require that two physicians make this determination. One may be the attending physician, but at least one must be a representative of the UR committee. In this situation, you may not be able to meet requirements for condition code 44 to bill the case as an outpatient, but all is not lost. CMS states in MLN Matters Article SE0622 that the appropriate billing method when you don’t meet condition code 44 criteria but the UR committee finds lack of medical necessity upon review of the case using CoPs guidelines is submission of the claim on a 12X type of bill. This type of bill allows payment for certain limited services (i.e., diagnostics, implants, dressings) under Part B when the stay was not medically necessary under Part A. Refer to the Benefit Policy Manual, Chapter 6, Section 10 for more information, including the complete list of services paid under the 12X billing methodology. This will require good communication with your billing department to distinguish these cases from condition code 44 cases, but affords hospitals the opportunity to receive some payment instead of writing the entire stay off as not medically necessary.

Going forward, the hospital may wish to consider asking physicians such as hospitalists, who are more readily available in these time sensitive situations, to serve on the UR committee. Alternatively, some hospitals find that a paid physician advisor, who serves on the UR committee and is on-call for consultation, is helpful when time is an issue. Physician advisors can be internal physicians on your medical staff with an interest in the UR committee. Alternatively, some companies provide contracted physician advisor services.

Do you have a tip or tool you’d like to share, or perhaps a question for our experts? Contact editor Julie McGinley at jmcginley@hcpro.com. Your tip or question might be featured in the next issue of Case Management Weekly!

Condition Code 44 question

The following question comes from Debbie Love, RN, a Case Management Weekly reader.

Question regarding Condition Code 44:

Are you aware of anyone who already has a “Condition Code 44 form” prepared/template which outlines the requirements and signatures, and, once signed, would be provided to the patient?

We are considering either a patient instruction handout on what observation means that would be provided to the patient along with a signed document by UR MD, patient’s PMD, and another member of our UR Committee (such as our director of case management) or a combined “Condition Code 44 form” which includes a brief explanation of observation and its financial implications for the patient (along with all the signatures.)

We do not have a UR Case Manager in our ED, and are finding this difficult to explain once a patient has already been admitted to a bed on a clinical unit. Is there anyone else having this same issue, and if so, how are you handling this?

Thank you,

Debbie Love, RN
Compliance and Training, Project Specialist
Sibley Hospital
dlove@sibley.org

Observation with condition code 44 and physician supervision

By Kimberly Anderwood Hoy, director of Medicare and compliance for HCPro, Inc.

Last week the American Health Lawyers Association held their annual Institute on Medicare and Medicaid Payment Issues in Baltimore. After speaking about observation at a conference session, I had the opportunity to speak to a CMS representative informally about condition code 44 as it relates to observation and also about physician supervision in hospital outpatient departments.

I had mentioned during my presentation that I was unsure how inpatient care hours should be converted following the appropriate use of condition code 44. When the case is converted to outpatient under condition code 44, I indicated it was unclear if these hours should be converted to observation or if the observation time begins at the time the inpatient status is changed and the observation order is written. [more]

Inpatient or observation, now that is the question

Just as you get your processes and procedures in place and staff trained on what is Observation and what is Inpatient, along comes Medicare! For acute care hospitals, how do we know if a patient should be Inpatient or Observation? First, and most importantly, you must have consistent processes and criteria to appropriately and proactively establish the appropriate placement of patient.
Here are a few questions to ask when determining the Medical necessity and appropriate status placement: