Just when you thought the stakes couldn’t be any higher when it comes to getting patient status right and medical necessity documented properly, the Centers for Medicare & Medicaid Services has raised the ante.
Beginning at the first of the year, hospital records are being subjected to review by a range of auditors, all of them looking for errors that could result in loss of reimbursement.
Quality improvement organizations (QIOs) are evaluating hospitals’ compliance with the two-midnight rule. Beginning Jan. 1, CMS shifted the enforcement of the rule from the Medicare Administrative Contractors to two Beneficiary and Family-Centered Care Quality Improvement Organizations, Livanta and KEPRO.
“The QIOs will conduct the first-line reviews of cases with short inpatient stay to evaluate whether they comply with the two-midnight rule and will refer hospitals with high denial rates to the Recovery Auditors for further review and corrective action,” says Deborah K. Hale, CCS, CCDS, president of Administrative Consultant Services, a Shawnee, OK-based healthcare consulting firm.
The Recovery Auditor program has cranked back up and the auditors are allowed to look at any issue that CMS has approved with the exception of patient status. So far, the RAs have been performing mostly DRG validation reviews, reports Steven Greenspan, JD, LLM, vice president of regulatory affairs for Executive Health Resources, a Newtown Square, PA, healthcare consulting firm.
“If a RA happens to pull a case for review and find patient status issues, it can still end up denying the case for patient status. Once the claim is reopened, the entire claim is vulnerable to review,” Greenspan says.
The Medicare Administrative Contractors (MACs) continue to conduct prepayment reviews.
CMS has reined in the RAs somewhat with changes in the auditors’ scope of work, and plans more changes when it issues new contracts, possibly in mid-year. (For details, see related article later in this issue.) For instance, effective Jan. 1, additional documentation requests (ADRs) from RAs are restricted to 0.5% of a provider’s total number of paid bills for all types of claims in the previous year.
“Providers should note that, also effective Jan. 1, CMS can adjust the number of additional documentation requests hospitals can receive depending on the hospital’s denial rates,” says Elizabeth Lamkin, MHA, chief executive officer and partner in PACE Healthcare Consulting, LLC, based in Bluffton, SC. As a provider’s denial rates decrease, so may the number of files the RAs can request. On the other hand, if your hospital has a high rate of denials, the RAs will be allowed to request the maximum number of records allowed to review, she adds. “This alone should be an added incentive to ensure systems and resources in care management to screen and monitor continued care in order to get medical necessity right concurrently and avoid denials,” she says.
The consequences for getting patient status wrong are equally troubling under today’s rules, Greenspan says. For instance, if the QIO or RA believes a hospital may be gaming the system, they are required to alert the Office of Inspector General (OIG) or the Zoned Program Integrity Contractors (ZPIC) to investigate for fraud and abuse and possibly bring criminal charges.
What does all of this mean for case managers?
“It is critical for hospital staff members who are responsible for case management and for utilization review to have comprehensive knowledge of CMS requirements. As CMS modifies the audit programs, providers have to be aware of the changes and make sure they comply with them,” Hale says.
Because case managers — along with their physician advisors — are the bridge between the financial piece and the clinical piece, they should have a system to keep up with what is going on with CMS and other regulators so they can share it with the rest of the clinical and revenue cycle staff, Lamkin adds.
“Today’s healthcare environment has so many moving parts and CMS is moving so quickly and being so aggressive that it’s almost impossible to keep up with everything that is happening. By the time providers hear what is going on with other providers, it’s almost too late to react. That is why care managers proactively seek out the most current rules and changes directly from CMS and give feedback to physicians on what they need to do to avoid denials,” Lamkin says. Avoiding denials means getting the patient status right at the onset and documenting thoroughly to support medical necessity, she adds.
The best thing that today’s case managers can do is to stay informed about what is going on with CMS and other payers, Greenspan says. “CMS is not the most transparent organization. They sometimes update their requirements but don’t always alert the provider community that they have issued another edict,” Greenspan says. He recommends checking the CMS website as well as the Recovery Auditor’s and QIO’s websites and reaching out to your compliance partners to see if there are any updates.
All of the fast-paced changes make it a confusing time for everyone in the healthcare arena, adds Donna Hopkins, MS, RN, CMAC, vice president at Novia Strategies, a national healthcare consulting firm. “CMS has shortened the timelines for review and is adding new layers and efficiencies to the appeals process to improve responses to providers. All discussions and appeals will need to be done more efficiently and within a shorter timeframe,” Hopkins says.
“There are multiple cooks in the kitchen now. The QIOs are reviewing for patient status and the RAs are reviewing for everything else. As the audits stretch beyond the inpatient setting into home health services, durable medical equipment providers, acute rehab and skilled nursing facilities, it will become essential for appeals and response management to become interconnected. This is particularly the case within more integrated organizations,” Hopkins adds.
To survive in today’s healthcare environment, hospitals need to eliminate the walls that exist between various departments and make sure everyone on the staff understands the current healthcare environment and how it is rapidly changing, Lamkin says.
“Think about the healthcare process as a team endeavor with many different players. Everybody has to play their part perfectly and collaborate with all the other players,” she says.
Hospitals need an entire operational focus just to manage the appeals, Hopkins says. “The databases hospitals created to keep track of the RAC requests won’t be sufficient when you have reviews by the QIOs, the RAs, and the MACs, all with different timetables and all looking at different issues,” she says. Hospitals may need to create a new division or department to manage all the changes, she adds.
Lamkin suggests that the case management department partner with its physician advisors to help the admitting physicians understand the CMS regulations, including the difference between an inpatient admission and observation services as well as the level of detail that must be included in the documentation.
“Case managers can give advice, but the physician makes the ultimate decision unless there is a dispute and the case is referred to the utilization management committee,” she says.
Work closely with the admitting physicians and your physician advisor, Greenspan suggests.
“Developing relationships with physicians is more important than ever. Case managers should be talking with the physicians, reminding them about properly documenting medical necessity, and should be involved with the utilization review committee,” he says.
Lamkin recommends that hospitals create a joint billing and audit compliance committee that includes representatives from finance, administration, clinical departments, and case management to review what is happening and make sure that everyone is trained and up to date on the regulations. “The committee should review auditor activity, reasons from denials, bill holds, and other problem areas and give feedback to the front-end providers to correct any problems,” she says.
The case management department needs to have a seat at the table and be involved in all aspects of the revenue cycle, she adds. “Case managers are one of the hospital’s most important assets, but not everyone recognizes this. It’s very important that case managers be involved in all aspects of the revenue cycle,” she says.