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Clinical case management

Case Management Monthly, August 1, 2009

This is an excerpt from a member only article. To read the article in its entirety, please login or subscribe to Case Management Monthly.

The three-year Recovery Audit Contractor (RAC) demonstration project that concluded in March 2008 added fuel to an already contentious process by second-guessing hospitals and physicians in the determination of appropriate patient status for hospital admission. As of March 27, 2008, the RACs’ efforts at identifying alleged overpayments led to the following successes:
$391.3 million, medically unnecessary services (40%)
$331.8 million, incorrectly coded (35%)
$74.3 million, no/insufficient documentation (8%)
$160.2 million, other (17%)

The classification of medically unnecessary services as a measure and justification of improper payment setting hospital recoupments was unequivocally controversial in the demonstration project and will remain so in the permanent RAC program. Why? The determination of medical necessity for inpatient admission versus outpatient observation is challenging at best, incorporating by definition elements of subjectivity, clinical impression, and individualized medical decision-making.

The challenge
Although the language in the Medicare Benefit Policy Manual, Chapter 1, Section 10, appears to be straightforward, the practical application and individualization to a wide variety of clinical presentations to the ER are quite challenging.
Adding to the complexity is the common problem of physicians’ lack of understanding that observation status is strictly an administrative financial classification of patients seen in the ER, office, or outpatient clinic who are determined to have an unstable or uncertain condition potentially serious enough to warrant close observation, but are not serious enough to warrant admission to the hospital.

This is an excerpt from a member only article. To read the article in its entirety, please login or subscribe to Case Management Monthly.

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