All Entries in the "Access Q&A" Category

If a physician writes a clear admission or outpatient observation order and the patient is receiving the level of care ordered, but an error by the business office or other staff results in an incorrect level of care designation being noted in the billing system, can this type of clerical transcription or designation error be corrected?

Q: If a physician writes a clear admission or outpatient observation order and the patient is receiving the level of care ordered, but an error by the business office or other staff results in an incorrect level of care designation being noted in the billing system, can this type of clerical transcription or designation error be corrected?

A: Yes. A clerical error that involves only an incorrect level of care status being assigned, not a problem with the physician’s order or the level of care the patient is receiving, can be corrected so that it is in alignment with the patient’s status as ordered by the physician. This type of error correction should be documented and tracked in an administrative system to determine if patterns to the occurrences can be identified and processes corrected to prevent a recurrence.

Editor’s note: The Texas Medical Foundation answered this question.

Q: If a hospital determines within a short period of time, after admitting a patient, that although the patient was acute on admission he or she has responded rapidly to treatment and is no longer acute, should the hospital bill the stay as an outpatient observation in order to prevent denial of a short stay or medically unnecessary admission?

Q: If a hospital determines within a short period of time, after admitting a patient, that although the patient was acute on admission he or she has responded rapidly to treatment and is no longer acute, should the hospital bill the stay as an outpatient observation in order to prevent denial of a short stay or medically unnecessary admission?

A: No. Hospitals, peer review organizations, etc., should not apply “hindsight” in determining medical necessity of admission. If, in the judgment of the admitting physician, a patient has an acute condition that requires treatment in an inpatient setting at the time of admission, the physician should document this in the medical record. If the patient should respond more rapidly to treatment than was anticipated, this should also be documented. The medical record documentation will allow an outside reviewer to determine what the physician was thinking at the time of admission and understand that medical necessity for inpatient admission was present.

Editor’s note: The Texas Medical Foundation answered this question.

Observation

Q: If a hospital determines within a short period of time, after admitting a patient, that although the patient was acute on admission he or she has responded rapidly to treatment and is no longer acute, should the hospital bill the stay as an outpatient observation in order to prevent denial of a short stay or medically unnecessary admission?

A: No. Hospitals, peer review organizations, etc., should not apply “hindsight” in determining medical necessity of admission. If, in the judgment of the admitting physician, a patient has an acute condition that requires treatment in an inpatient setting at the time of admission, the physician should document this in the medical record. If the patient should respond more rapidly to treatment than was anticipated, this should also be documented. The medical record documentation will allow an outside reviewer to determine what the physician was thinking at the time of admission and understand that medical necessity for inpatient admission was present.

Editor’s note: The Texas Medical Foundation answered this question.

Q: When should observation orders be written?

Q: When should observation orders be written?

A: Physician orders for outpatient observation must be written prior to the initiation of observation services. Orders may not be backdated.

Editor’s note: The Texas Medical Foundation answered this question.

Routine care in outpatient observation?

Q: Would it be permissible for a hospital to routinely care for all patients in outpatient observation prior to making a decision about their need for inpatient admission?

A: No. It is the responsibility of the admitting physician to make a decision at the time of admission about the patient’s condition and the level of services required. When it is clear to the admitting physician that the patient requires an inpatient level of care, the provision of these services should not be delayed.

Editor’s note: The Texas Medical Foundation answered this question.

Would it be permissible for a hospital to routinely care for all patients in outpatient observation prior to making a decision about their need for inpatient admission?

Q: Would it be permissible for a hospital to routinely care for all patients in outpatient observation prior to making a decision about their need for inpatient admission?

A: No. It is the responsibility of the admitting physician to make a decision at the time of admission about the patient’s condition and the level of services required. When it is clear to the admitting physician that the patient requires an inpatient level of care, the provision of these services should not be delayed.

Editor’s note: The Texas Medical Foundation answered this question.

What types of services would/would not qualify for outpatient observation?

Q: What types of services would/would not qualify for outpatient observation?

A: Although the reimbursement for outpatient observation has changed, the rules for use of observation have not changed. There must be medical necessity of observation services and the medical necessity must be documented in the medical record. Routine stays following late surgery, diagnostic testing, or outpatient therapy/procedures may not be billed as observation unless there is documentation that the patient’s condition is unstable. Normal postoperative recovery time following surgery cannot be billed as an outpatient observation. Editor’s note: The Texas Medical Foundation answered this question.

Under what circumstances is use of outpatient observation appropriate?

Q: Under what circumstances is use of outpatient observation appropriate?

A: Use of outpatient observation is appropriate when:

Q&A: Alcohol & drug abuse

Q: Can a provider disclose information related to a patient’s alcohol and drug abuse or HIV status to an insurance company to obtain approval for admission, verify coverage, or submit a claim for payment purposes?

A: The privacy rule doesn’t offer special protections for sensitive information such as treatment for substance abuse, HIV/AIDS, or mental health conditions. However, there are other federal regulations (e.g., Confidentiality of Alcohol and Drug Abuse Patient Records, 42 CFR Part 2) that provide additional protections for treatment of alcohol or drug abuse. HIPAA doesn’t preempt these regulations.

42 CFR Part 2 doesn’t apply to most healthcare providers. It applies only to federally funded programs “that hold themselves out as providing alcohol or drug abuse diagnosis, treatment, or referral.” For example, this law doesn’t apply to an acute-care hospital that treats a patient in the ED or intensive care unit for the acute effects of a drug overdose.

To comply with 42 CFR Part 2, substance-abuse-treatment facilities can disclose information to third-party payers only with the written consent of the patient and must limit the information to the minimum necessary.

Some state laws/regulations might offer additional protections for sensitive information, and you should review them for additional restrictions.

Can you bill managed care as you’d bill Medicare for discontinued procedures?

Q: If we bill Medicare for a discontinued procedure, can we bill Managed Care the same way? Some consultants are telling us that commercial insurance must follow Medicare guidelines.

Other consultants are telling us that Medicare is allowing this billing practice to anyone who is paid under OPPS, that the ability to bill discontinued procedures is not a federal guideline that Managed Care must follow, but a contract with Medicare.

Managed Care does not pay under OPPS so we would not be able to bill Managed Care for discontinued procedures. Instead, we must follow each particular contract.

A: The modifiers you cited are to be used in the Outpatient PPS system for “discontinued procedures”-outpatient surgical or diagnostic procedures that were started but discontinued by the physician due to “extenuating circumstances or to circumstances that threatened the well being of the patient”.

Modifier 73 is used for a procedure that is discontinued AFTER the patient is prepared for the procedure but BEFORE anesthesia is administered or the procedure is started. Modifier 74 is used for a procedure that is discontinued AFTER the patient is prepared for the procedure and AFTER anesthesia is administered or the procedure is started.

Medicare pays the provider for the costs incurred in preparing the patient, even though the procedure was not completed. The modifiers for discontinued services MUST be used by providers billing the Medicare program for services to Medicare beneficiaries.

In addition, payors offering Medicare Advantage or Medicare supplemental products with benefits that mirror Medicare coverage must provide payment for discontinued services. If the patient is not enrolled in a Medicare Advantage or Medicare supplemental product, the payor MAY accept the 73 or 74 modifier, but because the payor is not required to cover the same benefits as Medicare, it may not.

Whether this modifier would be accepted (and the discontinued procedure reimbursed) would depend on the terms of the patient’s insurance coverage and the terms of the contract between the provider and payor. Some payor contracts expressly refuse to pay for procedures discontinued for reasons which the payor deems to be inefficiency on the part of the provider or practitioner, such as scheduling conflicts for practitioners, equipment or procedure rooms, failure to properly prepare the patient, etc.

If the patient is NOT enrolled in a product providing Medicare coverage, you would need to determine the payor’s coverage policies for discontinued procedures. For more information on Medicare’s rules regarding Modifiers 73 & 74, click here.

This question was answered by Robin Fisk, Esq., a lawyer from Ashland, NH. It is not intended as legal advice.