Confusion ahead as CMS changes inpatient criteria
Two midnights is now benchmark for a stay
The Inpatient Prospective Payment System (IPPS) final rule for fiscal 2014 makes it more important than ever for case managers to develop a close working relationship with physicians and to review every admission to ensure that the documentation is complete and meets the requirements in the rule, says Linda Sallee, MS, RN, CMAC, ACM, IQCI, director for Huron Healthcare with headquarters in Chicago.
In the final rule, the Centers for Medicare & Medicaid Services (CMS) establishes a benchmark of two midnights for an appropriate inpatient admission and sets out a series of documentation requirements to support the admission. The rule emphasizes the need for a formal, written admission order by a physician or another practitioner who has admitting privileges in the hospital and mandates that the medical record must include the reasons the physician believes the patient should be admitted, the anticipated length of stay, and the plan of care, Sallee adds. Admissions on or after Oct. 1, 2013, are affected by the rule.
Patients should be admitted as inpatients if physicians expect the length of stay to span two midnights based on medical factors, such as patient history, comorbidities, the severity of signs and symptoms, and risk of adverse events, she adds. The physician documentation must certify that the services the patient requires must be provided on an inpatient basis. There are some exceptions to the rule. Procedures on the inpatient-only list are exempt from the two-midnight rule as are incidents when patients leave against medical advice, die, or are transferred to another facility, Sallee says.
Physicians can take the time patients have spent being treated as outpatients into consideration when they apply the two-midnight benchmark, says Adele Merenstein, JD, an attorney at Hall Render, a law firm specializing in health law with headquarters in Indianapolis. However, the time before the formal order is written cannot be counted as inpatient care to make the patient eligible for a skilled nursing stay, she adds.
The final rule doesn’t eliminate instances when a one-day inpatient stay is medically necessary, says Ralph Wuebker, MD, MBA, chief medical officer for Executive Health Resources, a Newtown Square, PA, healthcare consulting firm. "There are always going to be patients who recover more quickly than expected or than normal according to standards of care. In those cases, the documentation in the medical record must clearly show that the admitting physician believed that the patient would need care for at least two midnights and an unforeseen circumstance resulted in a shorter stay than the physician expected," he says.
In the short term, hospitals need to set up a triage team to develop a process to make sure the medical record contains all of the elements required by the final rule, including an order, the expected length of stay, and the documentation that supports the physician’s decision to admit the patient, says Brian Flood, CHC, CIG, AHFI, CFS, an attorney specializing in healthcare issues and partner with Brown McCarroll, LLP, in Austin, TX. "Case managers immediately should begin to work with physicians to improve documentation," Flood says. "Once physicians make the decision to admit patients, they have to put it in writing and document the reason and the expected length of stay," he says.
The best way for hospitals to make sure that admissions are appropriate and the medical record contains the required documentation is to have case managers in the emergency department reviewing patient admissions, Sallee says. "Once patients get in a bed, it gets harder to make sure they are in the proper status. It’s more important than ever for case managers to see every patient in person within 24 hours of admission. Case managers should be reviewing 100% of Medicare cases and getting them 100% correct before discharge, she says.
CMS says the final rule is intended to provide additional guidance as to when patients are appropriately treated and how hospitals are reimbursed for inpatient care as well as helping patients who in recent years have been receiving lengthy observation services when an inpatient admission may have been medically justifiable, Merenstein says.
"In recent years, physicians have been hesitant to order an inpatient admission early in the patient’s episode of care for fear of a costly inpatient admission denial. The beneficiaries may have incurred greater financial liability in the form of Medicare Part B copayments, charges for self-administered drugs, and in some cases, charges for post-hospital skilled nursing facility care," she adds.
CMS stated its intentions to make the inpatient versus outpatient question clearer but the IPPS final rule makes is more complicated, Flood says. The Centers for Medicare & Medicaid Services intends to issue guidance to providers and auditors on how to implement the inpatient admission guidelines, but that could take six months or longer, Flood points out. In the meantime, hospitals will struggle to make sure they are in compliance with the final rule, he adds.
"To say the rule is confusing would be an understatement. It puts traditional, relied-upon guidance on its head and ignores decades of experience basing admissions on InterQual and Milliman guidance," he says. Instead of relying on medical necessity criteria, physicians are being asked to base the decision to admit on the expected length of stay, he adds.
In an Open Door Forum on the two-day rule, CMS officials pointed out that InterQual and Milliman criteria sets have always been tools to guide hospitals but have never been Medicare policy.
Case managers still need to use InterQual and Milliman to assist physicians regarding needed documentation and to make sure patients meet criteria for continuing stays, Sallee adds.
Wuebker emphasizes that the two-midnight rule in no way substitutes for the utilization review process. "Case managers still need to review the charts, make sure that there are admission orders and sufficient and appropriate documentation in the medical record to support the physician’s judgment to admit the patient or order observation services," he says.
Case managers will still have the flexibility to use Condition Code 44 to change inpatient to outpatient if a review determines that patients don’t meet inpatient criteria, she says. But it’s still better to get the majority of cases right up front, Sallee says.
The final rule includes two distinct two-midnight policies in the final rule, according to Merenstein. One is the two-midnight benchmark which gives guidance to admitting physicians and reviewers when determining whether it is appropriate to admit on an inpatient basis. The other is the two-midnight presumption which states that claims for inpatient services with a length of stay spanning two midnights after an admission order will generally be presumed to be appropriate for payment under Medicare Part A, she says.
The rule states that an external review contractor, such as a Recovery Auditor (RA) or Medicare Administrative Contractor (MAC) should presume that an inpatient hospital admission is reasonable and necessary if the patient requires a stay that spans two midnights and receives medically necessary services, including surgical procedures or diagnostic tests after the inpatient admission, she adds.
CMS is asking physicians to look forward and determine if the patient is expected to stay in the hospital for two midnights and if so, order an inpatient admission, Wuebker points out. At the same time, CMS says that when auditors look on the back end of the process, if patients are in the hospital for two midnights, the auditors should presume that the case is appropriate for inpatient admissions, if adequate documentation is in place, Wuebker says.
CMS is requiring the auditors to look at the entire chart from the beginning, rather than after the inpatient order, Wuebker says. "This is a big victory for hospitals because it eliminates penalties for hospitals when there are artificial one-midnight stays," he adds. For instance, a physician orders observation services for a patient at 9 p.m., but when the case manager reviews the case the next morning, it is determined that the patient meets inpatient criteria; then, the patient stays another night. In the past, by looking at the claims data, an auditor might conclude that the patient was in the hospital just one midnight and deny the case when in fact he or she was in the hospital receiving treatment for two midnights and inpatient is appropriate.
- Brian Flood, CHC, CIG, AHFI, CFS, partner with Brown McCarroll, LLP, in Austin, TX. email:BFlood@brownmccarroll.com
- Adele Merenstein, JD, attorney at Hall Render, Indianapolis. email:firstname.lastname@example.org.
- Linda Sallee, MS, RN, CMAC, ACM, IQCI, Director, Huron Healthcare with headquarters, Chicago. email: email@example.com
- Ralph Wuebker, MD, MBA, Chief Medical Officer, Executive Health Resources, Newtown Square, PA. email: firstname.lastname@example.org