Corporate Compliance

Note from the instructor: As the healthcare world turns...

Medicare Insider, April 1, 2014

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This week’s note from the instructor is written by Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.
While healthcare providers waited for the outcome of the Senate vote on H.R. 4302: Protecting Access to Medicare—which will impact Medicare payments to physicians and non-physician practitioners, as well as delay ICD-10 implementation until October 1, 2015 and extend the 2-Midnight Rule review period by an additional six months in FY2015—I thought I would take a few minutes to point out the highlights of the latest information from CMS regarding the latter topic.
On March 12, CMS posted two new documents to its Inpatient Hospital Reviews website. These documents were posted not long after the most recent version that was published on February 24.
In the document titled “Questions and Answers Related to Patient Status Reviews” there is some new information as well as updated or clarified questions that providers should review in greater detail. Here are some highlights that I think are worth mentioning: 
  • (A1.3) If a MAC identifies no issues (defined as 0–1 claim denials) during the probe review, the MAC will cease further such reviews for that hospital for dates of admission spanning October 2013 to September 2014, unless there are significant changes in billing patterns for admissions.

Comment: I have often wondered what “minor,” “moderate,” “significant,” or “major” concerns are when reviewing the document “Selecting Hospital Claims for Patient Status Reviews: Admissions On or After October 1, 2013.” There does not appear to be any written guidance to providers to know which category they clearly fall into and why. At least now providers will know that if they have one claim denied out of their sample of either 10 or 25 records, they will not have further reviews conducted unless their billing patterns change. I am not sure if this clarification will be very comforting to providers overall.

  • (A2.2) The receiving hospital is allowed to take into account the pre-transfer time and care provided to the beneficiary at the initial hospital. That is, the start clock for transfers begins when the care begins in the initial hospital.

Comment: If a hospital is going to use the outpatient time spent at a transferring hospital to count toward their 2-midnight benchmark time, clear documentation should be obtained and maintained in the receiving hospital’s medical record to support their claim.  

  • (A4.10) …Thus, CMS does not require the treating physician to admit the beneficiary as an inpatient in these or any other circumstances…Accordingly, where the treating physician expects a beneficiary to require medically necessary hospital care spanning 2 or more midnights, we encourage the physician to consider ordering an inpatient admission, with the understanding that such a claim will not be denied by a Medicare review contractor for inappropriate status if all other requirements are met. CMS may monitor hospital outpatient billing trends for the incidence of prolonged outpatient stays so that we can provide education on when an inpatient admission is generally appropriate under the 2-midnight rule.
Comment: Although CMS may not require admission as an inpatient, the fact that prolonged outpatient stays may be monitored by CMS should give pause to hospitals that continue to have more than 24 hours of observation services. Hospitals should consider reviewing these records in addition to their 0–1 midnight inpatient stays.
  • (A4.11) MACs will issue determinations for such claims based on the general 2-Midnight benchmark instruction. In other words, if the physician reasonably expects the beneficiary to require a hospital stay for 2 or more midnights at the time of the inpatient order and formal admission, and this expectation is documented in the medical record, the inpatient admission is generally appropriate for Medicare Part A payment.
Comment: This is a new Q&A and is referring to cancelled surgical procedures after inpatient admission. However, if an inpatient surgery is cancelled and the stay is no longer medically necessary, hospitals could fall into a trap similar to what hospitals experienced with OIG audits for cancelled inpatient-only procedures. In these scenarios, Condition Code 44 should be considered in a timely manner.
In the other document, titled “Reviewing Hospital Claims for Patient Status: Admissions On or After October 1, 2013,” there were two items that may be of interest to providers.
  • (III.D.1.) If an unforeseen circumstance results in a shorter beneficiary stay than the physician’s reasonable expectation of at least 2 midnights, the patient may be considered to be appropriately treated on an inpatient basis and hospital inpatient payment may be made under Medicare Part A…Examples include unforeseen: death, transfer to another hospital, departure against medical advice, clinical improvement, and election of hospice care in lieu of continued treatment in the hospital.
Comment: An unforeseen circumstance that was clarified in this section is the election of hospice care.
  • In the section titled Patient Status Reviews,hospitals need to be aware that the Medicare review contractors are also assessing compliance with the admission order and certification requirements. Specifically, hospitals should verify that the orders and all elements of the certification are appropriately signed prior to discharge. This may cause challenges for facilities that are using a variety of areas in the medical record for the certification elements (i.e., history and physical, progress notes, order, etc.).
One other nugget I wanted to point out to hospitals that may have skimmed over it comes from the “Hospital Inpatient Admission Order and Certification” document that came out on January 30. This excerpt is in regards to the responsible physician not countersigning an initial or verbal order when they are in disagreement with the admission order.
  • (B.2.d.) Inpatient status begins at the time of formal admission by the hospital pursuant to the physician order, including an initial order (under (B)(2)(a)) or a verbal order (under (B)(2)(b)) that is countersigned timely, by authorized individuals, as required in this section. If the physician or other practitioner responsible for countersigning an initial order or verbal order does not agree that inpatient admission was appropriate or valid (including an unauthorized verbal order), he or she should not countersign the order and the beneficiary is not considered to be an inpatient. The hospital stay may be billed to Part B as a hospital outpatient encounter.
Comment: When appropriate, hospitals should consider this guidance carefully as an option to using Condition Code 44 or Part B inpatient billing.
It is getting more and more difficult to keep an eye on these moving targets as CMS continues to clarify and add new information to the 2-midnight rule documents, although it does not appear that it is always indicated with red italic writing. All providers impacted by the regulations would be well served to monitor the CMS website and review any new posts with a fine tooth comb. Each time I read these documents I seem to discover something new.


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