OIG work plan puts spotlight on discharge and transfer patterns

Responsibility for proper documentation falling on case managers

The Health and Human Services Office of Inspector General’s (OIG) newly released work plan for FY 2002 signals that the fraud enforcement agency will focus much of its attention in the coming year on discharge and transfer patterns at acute care facilities.

Robert Homchick, JD, a partner with the law firm Davis Wright Tremaine in Seattle, says that transfers and discharges are a predominant theme throughout the new work plan. Not only are areas such as one-day stays targeted for scrutiny, but so are transfers within related parts of the system, such as transfers from an acute care hospital to a rehab hospital or a skilled nursing facility, he points out.

Case managers have different responsibilities at different hospitals, says Deborah Hale, CCS, president of Administrative Consultant Service Inc. in Shawnee, OK. But typically, case managers are responsible for at least overseeing the discharge planning activity.

The OIG’s work plan and a recent Centers for Medicare and Medicaid Services (CMS) transmittal have made it clear that the OIG and the U.S. Department of Justice intend to identify hospitals that inaccurately report discharge disposition codes, Hale says. "It is very important that their documentation is very clear about the level of care to which the patient is being transferred," she cautions.

Physicians seldom provide as much detail about the types of services for which the patient is being referred, Hale says. Instead, the case manager’s documentation typically is relied upon. "We deal with this on a daily basis when we perform audits," she asserts.

According to Hale, the problem has its roots in several areas. When CMS changed the definition of a transfer in 1998, it reduced the DRG payment for the short-stay admissions for 10 DRGs, she explains. In addition, a number of hospitals have been targeted for inappropriately reporting transfers to other acute care facilities as discharges to home in order to collect the full DRG.

In a study by Health Economics Research Inc., the original discharge disposition code accuracy rate of 74% prior to the change in transfer definition has improved to 79% in 1999, but that still falls short of expectations, according to Hale. As a result, CMS is pressuring fiscal intermediaries to identify claims that were inappropriately paid as discharges rather than transfers, and to aggressively seek to recoup those funds, she says.

Typically, it is the coders’ responsibility to determine the discharge disposition code, Hale says. Often, however, coders are unable to determine where the patient went at the time of discharge because the case management planning is not specific enough to indicate whether a patient was discharged to a skilled facility vs. an intermediate care facility nursing home.

"Those are the two most difficult to pick out," says Hale. "But the difference there is the difference between the full DRG or the reduced DRG."

Case managers also are held accountable for discharges to home health when those services are received within three days of discharge. "It is very difficult to determine in some instances if they were referred to home health," says Hale. In some cases, patients may not receive a referral for home health services, only to have family members determine those services are needed. The original publication of the transfer definition change makes it very clear that it is the hospital’s responsibility, she says.

One area that the OIG is targeting is one-day hospital stays. The OIG says it plans to evaluate controls designed to ensure the reasonableness of Medicare payments for beneficiaries discharged after only one day in the hospital.

It notes that recent data show that 10% of all Medicare patients are admitted the following day and says it plans to concentrate on the ability of hospitals to detect and deny inappropriate payments for one-day stays.

Hale says this poses a major problem for hospitals already struggling over whether to admit a patient to observation status or to admit him or her to inpatient status, even though it may only take one day to provide the necessary care.

"There is a lot of confusion among hospitals about which one is the appropriate level of care," she says.

Caught between two rules

On the one hand, Hale says, CMS’s payment error prevention program (PEPP) scrutinizes the medical necessity of a one-day stay. However, the outpatient prospective payment system (OPPS) does not include a separate payment for observation status. As a result, if the hospital does not admit patients who require just one day of care, there is no payment aside from the patient’s diagnostic tests, emergency department (ED), or ambulatory surgery services.

"Hospitals are caught between the new rules for OPPS and the PEPP program focused on one-day stays," she asserts. "It’s a Catch-22." That situation should be eased somewhat in January, because the OPPS proposed rules provide for a separate payment for observation for congestive heart failure, asthma, and chest pain, she adds.

However, that will still leave hospitals with a dilemma, attempting to determine where the risk is greatest. "It generally falls to case managers to help physicians make those judgement calls," Hale says.

According to Beverly Cunningham, MS, RN, president of Case Management Consultants in Toledo, OH, the solution to that dilemma is for case managers to review the history for one-day stays in order to determine if patients met the requisite criteria. If the documentation shows that on admission the patient met the requisite criteria but that his or her clinical course changed after being discharged to the home, there should be no problem, she says.

A five-hospital system Cunningham was affiliated with addressed this problem by examining individual cases and uncovered several scenarios that followed that pattern.

For example, a patient comes in suffering from pain and dehydration associated with a kidney stone and requires an IV and pain medication. Clinicians initially may believe the patient will be in the hospital overnight with a study the next day, followed by an intervention to dissolve kidney stones. In some cases, however, the patient may pass the stone and be released the same day. "If the documentation supports those facts, it will not present a problem," Cunningham says.

Often, however, there is no case manager at the point of entry in the system to help monitor that type of situation, and hospitals run into trouble. "The OIG is collecting literally millions of dollars for this," she asserts.

A point-of-entry case manager in the ED or elsewhere in the system can help to determine the appropriate status and avoid that type of problem.

The OIG also plans to look at the extent to which Medicare beneficiaries receive acute care and post-acute care through sequential stays in different settings, such as skilled nursing facilities, long-term care facilities, and PPS-exempt units. It notes that inpatient services may be denied based on peer review organization review for patients admitted unnecessarily for one stay or multiple stays.

"Case managers must have an awareness of the criteria for transferring the patient," Cunningham says. But they also must have a good relationship with parties accepting those patients and communicate with them effectively. "That puts the burden of responsibility on case managers to know their patients," she asserts.

According to Cunningham, that requires more than just a chart review. It requires a visual assessment of the patient or direct communication with him or her. Problems arise when case managers "manage by the charts," she says. "Case managers perform many useful functions, but they are challenged by their case load and the lack of focus they are sometimes given."

According to Cunningham, even transfers to psychiatric units in the same integrated system can pose problems.

"It goes back to documentation to support what is taking place." And responsibility for ensuring proper documentation increasingly is falling on case managers, she explains. "It is not that they must do the documentation, but they must be sure that it supports the transition from area to area in the continuum of care."

The OIG also plans to scrutinize hospital discharges and subsequent readmissions through a series of reviews that will examine Medicare claims for beneficiaries who were discharged and shortly thereafter readmitted to the same or another acute care PPS hospital.

At one hospital system that Cunningham was affiliated with, the hospital looked at readmissions for the same diagnosis. One such review turned up a readmission for a patient who refused to go to a nursing home, only to return to the ED a week later.

While there is no way to prevent every such case, case managers can take certain steps, such as ensuring that a family conference takes place. Likewise, patients may not be receiving the necessary education, she says.

"When we find that we get readmissions for the same diagnosis, it behooves us to start studying why those readmissions occurred," Cunningham concludes.

"Is it because the patients can’t afford their medications? Is it because we did not give them proper education? Did they meet discharge criteria? Those are the kinds of things that as case managers we have to look at when we see readmissions," she adds.