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CMS issues guidance on hospital inpatient admission decisions

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Medical necessity determinations are not just a hot button issue with RACs, but also with the other ‘usual suspect’ government auditors: Medicare administrative contractors (MACs), fiscal intermediaries (FIs), and comprehensive error rate testing (CERT) contractors. So much, in fact, that CMS felt it prudent to release educational guidance to assist hospitals regarding inpatient admission decisions.

While many hospitals may in fact be utilizing proper screening criteria to analyze documentation and make medical necessity determinations, the fact remains that it’s an imperfect endeavor. And while Interqual and Milliman, as well as other additional systems, may assist facilities in specific jurisdictions, CMS issued a special edition MLN Matters article that points providers toward its own manuals for guidance.

Program Integrity Manual Guidance

In Chapter 6, section 6.5.1 of the Program Integrity Manual, CMS states that contractor review staff are required to use a screening tool as part of their medical review process for inpatient claims, but it does not require that the contractor use specific criteria nor endorse any particular brand of guidelines. In addition, “CMS contractors are not required to pay a claim even if screening criteria indicate inpatient admission is appropriate. Conversely, CMS contractors are not required to automatically deny a claim that does not meet admission guidelines of a screening tool.”

Most imperative, however, is the part of the manual that states, “In all cases, in addition to screening instruments, the reviewer shall apply his/her own clinical judgment to make a medical review determination based on the documentation in the medical record.” According to CMS, for every case, review staff is to utilize the following when making a medical necessity determination:

  • Admission criteria
  • Invasive procedure criteria
  • CMS coverage guidelines
  • Published CMS criteria
  • Other screens, criteria, and guidelines (e.g.; practice guidelines that are well accepted by the medical community).

In addition to providing general guidance to providers regarding medical necessity determinations, this release also places an emphasis on the responsibilities of certain professionals within the hospital setting, according to Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

“Providers should use this article to help educate physicians, case managers, and any other clinical staff involved in the decision to admit process,” she says.

In addition, Mackaman says coders and CDI specialists should be aware of the article to help identify potential documentation improvement areas in order to show that the inpatient admission was medically necessary and appropriate for the beneficiary. Auditors and compliance staff should also review the specific manual sections to assure compliance with the regulations.

Medicare Benefit Policy Guidance

In addition to the Program Integrity Manual, CMS points providers to the Medicare Benefit Policy Manual for guidance. Chapter 1, Section 10 states that “an inpatient is a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services,” and that the physician or practitioner is responsible for deciding whether that patient should or should not be admitted as an inpatient. According to the manual, 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 medical history, current medical needs, available facilities, hospital by-laws and policies, and appropriateness of treatment in each setting. Additional factors include:

  • 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
  • The availability of diagnostic procedures at the time when and at the location where the patient presents.

While the release provides additional clarification and information for providers, further action is also needed, according to Donna Wilson RHIA, CCS, CCDS, senior director at Compliance Concepts in Wexford, PA.

“The Guidelines on Hospital Inpatient Admission Decisions release is a valuable tool for providers to reference given the recent wave of medical necessity issues released by RACs nationwide. However, hospital providers have been using screening criteria as a guide all along in determining medical necessity.”

She continued, “Clinical judgment based on documentation in the medical record is the best defense. Providers should examine any and all medical necessity denials to determine when an appeal is warranted. Engage your medical staff in the review process—hospitalists, physician advisors, specialists, and of course, the attending physician—should all be actively involved.”

While the references may prove to be a convenient point of reference, the release may also pose a bit of a challenge for providers, according to Deborah Hale CCS, CCDS, president and CEO of Administrative Consultant Service, LLC, in Shawnee, OK.

“The list of factors for determining medical necessity provided in this article places hospitals in a difficult position regarding compliance with their statutory obligation to assure that services are provided economically and only when, and to the extent, they are medically necessary (42 CFR 1004.10(a)),” she says.

She continued, 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.”

Editor’s note: HCPro Associate Editor Ben Amirault contributed to this article.

To read the special edition MLN Matters article, click here:

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