Executive Summary

Is the hospital appropriately billing for inpatient status, but the payer insists only observation is needed? A growing number of claims denials involve disputes over the patient’s level of care.

“We review level of care daily for all of our patients,” says Lisa Adkins, MSN, RN, CPNP, CRCR, director of patient authorization at Nemours/Alfred I. duPont Hospital for Children in Wilmington, DE.

Most payers require a clinical update frequently throughout the patient’s admission, but the specifics vary. Some require a weekly review, others want it done twice a week, and still others want it every day.

This is a recent focus at Abington–Jefferson Health (PA), where the maternity unit has been working to reduce level of care claims denials for newborns.

“We are typically paid on a per diem basis for our babies, and the level of care determines the reimbursement amount,” explains Kim Roberts, MBA, RHIA, CRCS-I, vice president of revenue cycle at Abington–Jefferson Health. Neonatologists review the level of care assigned to the baby on a daily basis to be sure it matches the level of care approved by the payer. “This avoids denials and/or underpayments based on the level of care,” says Roberts.

Resolve It Right Away

When a level of care denial occurs at Nemours/Alfred I. duPont Hospital for Children, patient access typically can support the billed level of care by:

• demonstrating the patient met admission care guidelines for the billed level of care, using Interqual (San Francisco-based McKesson) or MCG (Seattle-based MCG Health);
• demonstrating the patient met medical necessity criteria by doing a clinical review of the case.

“Issues around level of care denials are usually discovered and resolved concurrently,” says Adkins.

Most of the denials are based on medical necessity. “We then have to prove that the child is meeting criteria for a continued stay at the acute level of care,” says Adkins.

Patient access is careful to give the payer all of the relevant clinical information to support the level of care the patient requires. This is done up-front. “Sometimes the best defense is a good offense,” says Adkins.

How often the child is requiring medical treatments, IV medications, and pain medications can become important when the payer is arguing for a lower level of care. How the child responds to treatment is another crucial piece of information. “It may be that there is a minimal response to treatment, requiring a change in the plan of care,” says Adkins.

Sometimes all this information is in the medical record, but that isn’t always the case. “The medical record may not have all of the information around the clinical issues, and progress — or lack thereof — for the patient, at the time of the clinical review,” notes Adkins.

In this case, the utilization or case management nurse looks at whether the available documentation meets the criteria for the level of care on its own. If it doesn’t, the nurse contacts the attending physician and the care team to determine if any additional information is available to present to the payer.

“There may be an imaging study that hasn’t been officially reviewed and documented, or lab results that would impact the continuation of a specific higher level of care vs. decreasing to a lower level,” says Adkins.

Ensure Appropriate Status

Preventing claims denials on the front end is an ongoing goal at Albany Medical Center in New York, says Joyelle Chrysostom, CHAM, manager of financial clearance operations. These changes were made to address level of care denials:

• Patient access staff asked for a field to be added to the hospital’s Admission/Discharge/Transfer system.

The new field indicates “Inpatient Only Code—YES” or “Inpatient Only Code—NO.”

“This field was incorporated into my team’s daily workflow,” says Chrysostom.

When financially securing a surgical outpatient encounter, the team reviews the Centers for Medicare & Medicaid Services’ Inpatient Only List.

“This ensures that the surgical encounter is in the appropriate status,” says Chrysostom.

• One or two denials are selected to review at every staff meeting.

Staff is asked to identify the reason for the denials.

“The staff has verbally expressed they enjoy the case studies and learn from them,” says Chrysostom.

SOURCES

• Lisa Adkins, MSN, RN, CPNP, CRCR, Director, Patient Authorization, Nemours/Alfred I. duPont Hospital for Children, Wilmington, DE. Phone: (302) 651-4548. Email: Lisa.Adkins@nemours.org.
• Joyelle Chrysostom, CHAM, Manager, Financial Clearance Operations, Albany Medical Center (NY). Phone: (518) 262-3644. Email: ChrysoJ@amc.edu.
• Kim Roberts, MBA, RHIA, CRCS-I, Vice-President, Revenue Cycle, Abington–Jefferson Health (PA). Email: Kim.Roberts@jefferson.edu.