Ensuring Compliance in Case Management Is Critical
By Jeni Miller
Many compliance issues in the CMS Conditions of Participation for utilization review (UR) and discharge planning need attention. Ensuring compliance is critical for improving patient care, preventing financial penalties or sanctions, and avoiding trouble with governmental authorities by identifying and correcting compliance issues early.
“Compliance is a core concept in healthcare delivery,” says Toni Cesta, PhD, RN, FAAN, partner and consultant with Case Management Concepts. “It defines appropriate conduct and is used to train staff and to monitor adherence to the processes, policies, and procedures required.” One definition of compliance is that it is “the ongoing process of meeting or exceeding the legal, ethical, and professional standards applicable to a particular healthcare organization or provider,”1 Cesta notes.
Compliance requirements of case managers were more limited in the past, but regulatory bodies have created standards pertinent to the work of hospital case management, Cesta explains. The goal is to improve quality and availability of healthcare while simultaneously controlling the costs of care. It is likely that as government and third-party payers strengthen quality-based requirements, there also will be stricter governmental regulation and oversight.
RN and social work case managers must follow the rules and regulations that define compliance for them, their employment, their basic licensure, and their advanced practice as case managers. There are several entities that require compliance, including:
- Office of Inspector General;
- Department of Health and Human Resources;
- National and state agencies;
- Hospital accreditation bodies;
- Third-party payers;
- The hospital;
- The patients.
If a hospital participates in Medicare and Medicaid programs, they are required to follow the CMS Conditions of Participation for Hospitals. There are 13 conditions with which hospitals and staff must comply. Relevant to case managers are the sections on discharge planning (sub-section 482.43) and UR (sub-section 482.30.).
Compliance with Discharge Planning
To be fully compliant, case managers must ensure these steps are followed:
- Creating a discharge plan if requested by the patient’s physician, even if the hospital determines the patient does not need one;
- Making arrangements to implement the discharge plan;
- Reassessing the discharge plan if continuing care needs or appropriateness of the plan change;
- Counseling the patient and family members/caregivers to prepare them for post-hospital care;
- Transferring or referring patients and their medical records to appropriate facilities, agencies, or outpatient services for follow-up or ancillary care;
- Ongoing reassessment of the discharge process, including review of discharge plans to ensure they are responsive to discharge needs.
Discharge Planning Final Rule
In November 2019, CMS updated its final rule for discharge planning.2 The updates include:
- Identify at-risk patients and provide a timely discharge planning evaluation;
- Include the likelihood of the patient needing appropriate post-hospital services, including skilled nursing facilities (SNFs), home health aides (HHAs), inpatient rehabilitation facilities (IRFs), and long-term care hospitals (LTCH). Availability and access to these services must be included;
- Document whether a patient prefers not to participate in or refuses discharge planning;
- Provide patients and their caregivers information, including quality measures, to assist them in selecting post-acute providers;
- Provide patients and caregivers a choice list of Medicare-participating SNFs, HHAs, IRFs, or LTCHs serving the geographic area of the hospital or area requested by patient;
- Ensure the information is aligned with the patient’s treatment goals and preferences;
- Discharge patients with all necessary information to appropriate post-acute providers to ensure the patient’s current course of illness and treatment, goals of care, and treatment preferences.
Giving a Compliant Choice List
Case managers must ensure patients and their caregivers have the freedom to choose a Medicare-participating post-acute provider. They also should respect these preferences. “The hospital must not specify or otherwise limit the qualified providers that are available to the patient, and they also must identify if the hospital has any disclosable financial interest in any HHA, SNF, IRF or LTCH to which the patient is referred, as well as any HHA, SNF, IRF or LTCH that has disclosable financial interest in a hospital under Medicare,” Cesta adds.
Compliance in Utilization Review
Likewise, hospital case managers should be familiar with the requirements for compliance relating to UR, says Beverly Cunningham, RN, MS, partner and consultant with Case Management Concepts. “Hospitals must have a plan to review services furnished by the institution and by members of the medical staff to patients entitled to benefits under the Medicare and Medicaid programs,” she says.
For compliance purposes, all hospitals must create a utilization review committee, consisting of medical staff with two or more practitioners, that reviews lengths of stay and professional services. The committee only needs to review length of stay and professional service cases that are outliers based on extended length of stay or extraordinarily high costs.
“The committee needs to ensure that medical necessity reviews may not be conducted by any individual who has direct financial interest in the hospital,” Cunningham notes. “They also must ensure the reviewer was professionally involved in the care of the patient whose case is being reviewed.”
The hospital also must ensure all UR activities are fulfilled, including review of medical necessity and continued stays.
When an admission order does not meet medical necessity, case managers should use this process to review billing:
- Include a member of the UR committee, most often a physician advisor;
- Include a discussion with the physician of record when the patient remains hospitalized;
- If the physician of record agrees with the UR committee physician, that physician must include documentation of agreement with the UR physician in the medical record. This is the only time that an inpatient order may be reversed to outpatient by a physician order;
- If the patient has been discharged, then a discussion with the physician of record is not required;
- If the order is changed to observation and the patient is still in the hospital, the Medicare Outpatient Observation Notice (MOON) must be delivered to the patient.
This process allows billing for Medicare Part B for these patients with an initial inpatient order. Condition Code 44 indicates the patient remained in the hospital and the regulations were followed for the order change to observation service. Condition Code 121, often called Provider Liable, indicates the patient did not remain in the hospital.
There are more regulations for UR than those from the Conditions of Participation, including the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act.3 This act “notifies Medicare beneficiaries, including original Medicare and Medicare Advantage, receiving observation services as outpatient for more than 24 hours of status as outpatient,” Cunningham says.
This includes critical access hospitals, Cunningham notes. The NOTICE Act explains the implication of outpatient status on treatment provided, including treatment provided to inpatients. It also details implications for cost-sharing requirements and coverage for SNF services.
The document must be signed by the patient or his or her representative. Refusal to acknowledge receipt requires a signature by the hospital staff member who presented the MOON, Cunningham says.
“This rule has been challenging for case managers and physicians alike to understand and implement,” Cunningham explains. “It pertains to traditional Medicare patients and any Medicare Advantage plan patient when there is no contract for that plan’s patients.”
To comply with the Two-Midnight Rule, case managers must ensure the following:
- Include defined physician documentation to ensure payment;
- Include the expectation of the patient stay to be one midnight, with accompanying observation service order;
- Include the reason for hospital services for any stay longer than one midnight with accompanying inpatient order;
- Reassess after one midnight if observation service and patient will remain in the hospital (with presumed inpatient order), and include the reason;
- Inpatient-only procedures are the exception.4
Other exceptions to the Two-Midnight Rule include unforeseen circumstances resulting in a shorter stay than the physician’s expectation of at least a two-midnight stay, death, transfer, departure against medical advice, unforeseen recovery, election of hospice care, and new-onset mechanical ventilation.
“Such claims may be considered appropriate for hospital inpatient payment,” Cunningham says. “Physician expectation and any unforeseen interruptions in care must be documented in the medical record.”
Important Message from Medicare
Cunningham also notes the Important Message from Medicare, which is a notice presented from the hospital on behalf of Medicare that must be signed within two days of inpatient admission. The notice “explains the rights as a patient to appeal discharge,” she says. A second copy of the notice must be presented up to two days, and no later than four hours, before discharge.
“Case managers play a central role in helping their patients achieve better compliance and adherence to their care plans, which can lead to improved health, reduced hospitalizations, and stronger health systems,” Cesta says. “Accurate assessment can uncover barriers to compliance, and asking questions if you do not understand a compliance rule or regulation can help as well. As issues are discovered, consider addressing them in your discharge plan and sharing them with the next level of care providers. Compliance not only helps to secure the best care for the patient, but often a payer’s contract requires compliance for payment.”
- Smith ML. Healthcare compliance: An overview of the basics for organizations and providers. The Health Law Firm. 2017.
- Centers for Medicare & Medicaid Services. Medicare and Medicaid programs; revisions to requirements for discharge planning for hospitals, critical access hospitals, and home health agencies, and hospital and critical access hospital changes to promote innovation, flexibility, and improvement in patient care. Fed Regist. Sept. 30, 2019.
- Center for Medicare Advocacy. Hospitals must give patients notice of their observation status, beginning March 8, 2017. Dec. 14, 2016.
- Centers for Medicare & Medicaid Services. Fact sheet: Two-Midnight Rule. Oct. 30, 2015.
Many compliance issues in the CMS Conditions of Participation for utilization review and discharge planning need attention. Ensuring compliance is critical for improving patient care, preventing financial penalties or sanctions, and avoiding trouble with governmental authorities by identifying and correcting compliance issues early.
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