Health Information Management

Inpatient-only procedures: Accuracy helps avoid denials, ensure compliance

JustCoding News: Inpatient, October 10, 2012

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Inpatient-only procedures are those that CMS has determined providers must perform on an inpatient basis because they are invasive and require at least 24 hours of postoperative recovery time or monitoring.

These procedures are also performed on patients with serious underlying conditions.
“[CMS] wants Medicare patients admitted for procedures that are more serious and that require inpatient care,” says Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro, Inc., in Danvers, Mass.
The complete list of inpatient-only procedures is available in the OPPS final rule and is updated annually. The calendar year (CY) 2012 list includes more than 1,700 codes. CMS proposes removing the following two procedures from the list for CY 2013:
  • CPT® code 22856, total disc arthroplasty (artificial disc), single cervical interspace  
  • CPT code 27447, total knee arthroplasty
Providers should monitor the CY 2013 OPPS final rule in case CMS decides to remove more procedures, says Hoy. In 2012, CMS removed 10 procedures instead of two as first proposed, she says.
Confusion complicates compliance
The inpatient-only list is counterintuitive because it includes HCPCS codes, not ICD-9-CM procedure codes, says Beverly Cunningham, MS, RN, vice president of clinical performance improvement at ­Medical City Dallas Hospital. Complicating matters, no  crosswalk between HCPCS and ICD-9-CM procedure codes exists, making it difficult to monitor denials and audits that reference inpatient procedure codes, principal diagnoses, and MS-DRGs.
Some Recovery Auditors are rejecting one-day stays that include inpatient-only procedures, claiming the procedures are medically unnecessary, says Cunningham. ­Hospitals must always ensure thorough documentation that describes the necessity for inpatient admission, she says. This includes documentation of a medical history that discusses:
  • Patients needs
  • Signs and symptoms
  • Previous treatments
  • Necessity for inpatient care
Providers have been successful in overturning Recovery Auditor denials when the provider documents medical necessity, she says.
“None of these procedures are cheap, so we can’t ­afford any of these denials,” says Cunningham.
Payment implications
Coders must understand that ­inpatient-only procedures have significant payment ­implications for hospitals.
“If you perform an inpatient-only procedure on an outpatient basis, then in most circumstances, there’s going to be no payment for that procedure and also no payment for any other service provided at the same time,” says Hoy.
This includes any other ancillary services provided on the same date of service, such as:
  • ED visit
  • X-rays
  • Any other diagnostic and therapeutic services
“It’s really interesting that [CMS] doesn’t deny the surgeon’s reimbursement,” says Hoy. “This really makes the point that it’s more of a payment rule than a quality rule. CMS has been asked whether it intends to change this, and it has said no, it doesn’t intend to change it or make any kind of payment adjustment for the physicians.”
How does CMS know when to reject an inpatient-only procedure? CMS doesn’t pay for these procedures when hospitals bill them in the following circumstances:
  • The patient is an outpatient prior to performance of the procedure (billed on a type of bill 013X)
  • Edits 18 (inpatient procedure) and 49 (service on the same day as an inpatient procedure) are triggered in the Outpatient Code Editor (OCE)
Exceptions to the rule
However, coders should be aware of two ­exceptions in which CMS will make payment; both are ­addressed in the Medicare Claims Processing Manual, ­Chapter 4, §180.7.
The first exception occurs when coders report an inpatient-only procedure that’s also on the separate procedures list in conjunction with a separate surgical procedure with a status indicator T (significant procedure, multiple reduction applies).
In this case, CMS rejects the inpatient-only procedure, but processes payment for the status indicator T procedure. For example, an outpatient undergoes a laparoscopic hysterectomy (a surgical procedure with a status indicator T) plus an add-on appendectomy due to an inflamed appendix. The appendectomy is an inpatient-only procedure on the separate procedures list, so hospitals will receive payment for the hysterectomy but not for the appendectomy, says Hoy. CMS will also pay for any other services (e.g., drug infusions) the patient receives the same day.
“There isn’t a good list of [separate procedures] available publicly. You can get them through purchasing an OCE data file,” says Hoy. “Some claims editors have the list built into them. It’s a little difficult to identify them, and for that reason, I says just bill it all … You might fit under this exception … and find that you get paid after all.”
The second exception applies when a provider performs an inpatient-only procedure on an emergency basis, and the patient expires before the physician can write an inpatient order.
If hospitals report an inpatient-only procedure with modifier -CA (procedure payable only in the inpatient setting when performed emergently on an outpatient who expires before admission), CMS will make a single payment for all services provided that day, including the inpatient-only procedure, Hoy explains. Hospitals will receive one unit of APC 0375 (approximately $6,000 in CY 2012). Coders should report modifier -CA on the inpatient-only procedure and bill services on an outpatient bill type 0131 as covered charges. Use patient discharge status code 20 to indicate the patient expired, Hoy says.
A patient who survives an inpatient-only procedure begun on an emergency basis may be admitted for inpatient care or admitted and then transferred to another facility. In both cases, a physician must write an admission order immediately after the procedure.
“Normally, CMS has said that this would be a retroactive admission, but they [approve] it under these circumstances,” says Hoy. Coders should report an inpatient-­only procedure on an inpatient claim as a covered service. If a hospital transfers a patient, it will receive a per diem payment rather than a full MS-DRG payment, she says.
Elective or scheduled outpatient procedures that convert to unplanned inpatient-only procedures are challenging and occur frequently, says Hoy. Surgeons can’t stop procedures to write admission orders, she says.
CMS has provided conflicting guidance. In December 2007, a CMS representative said during an Open Door Forum call that an order written immediately after a procedure wouldn’t be considered backdated or retroactive. However, a representative said during an August 2011 call that no such grace period exists and told providers to seek guidance from their contractors.
Noridian Administrative Services, LLC, said during Web-based training March 27-28 that physicians don’t need to stop surgery and may write orders when procedures are completed.  
Noridian sometimes reconsiders and updates its guidance, and other MACs may not follow this policy, says Hoy. If you haven’t received guidance, ask your MAC about Noridian’s policy and ask it to post information on its website, says Hoy.
Editor’s note: The information in this article was originally presented during HCPro’s audio conferenceInpatient-Only Procedures: Master the Rules and Exceptions in 90 Minutes.” This article was originally published in the October issue of Briefings on Coding Compliance Strategies.
Access the inpatient-only list at­Medicare/Medicare-Fee-for-Service-Payment/­HospitalOutpatientPPS (Addendum E).
Access Addendum E via the left navigation bar, ‘­Hospital Outpatient Regulations and Notices,’ and then select ‘­CMS-1525-FC for 2012’ and then ‘CY2012 OPPS ­Addenda.’ ­Alternatively, access the inpatient-only procedures in ­Addendum B by sorting them according to status indicator C (inpatient-only procedure).

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