CMS Observation vs. Inpatient Admission Big Impacts of January Changes

Transcription

1 CMS Observation vs. Inpatient Admission Big Impacts of January Changes Linda Corley, BS, MBA, CPC Vice President Compliance and Quality Assurance Cellular Ext Office

2 Agenda To Observe or to Admit as Inpatient Identify why Observation versus Inpatient has been a national concern. How has CMS solved the problem? Define OBSERVATION according to CMS. Determine the appropriate use of Observation vs. Inpatient hospital admissions. Discuss the good, the bad and the ugly reimbursement methodologies for 2016! Focus on Two-Midnight Rule for Inpatient criteria. Recommendations for success! 2

3 CMS Inpatient Admission Reports CMS paid $19.9 billion in error for Medicare fee-for-service inpatient claims in 2010.* 17.2% were due to medically unnecessary services.* 43.7% were due to insufficient documentation.* 41% of admission errors were associated with one-day stays that were billed as Inpatient. DRG 313 (chest pain) is one of the most common admission errors. Per CMS, because the payment error rates are increasing, there will be more auditing in the future. * Improper Medicare FFS Payments Report 2010, 3

4 Specific State Concerns In FY 2010 over 4,500 claims were submitted for DRG 143 (chest pain) in Arizona: One-day stays accounted for 52% of the claims. Of those one-day-stay claims, InterQual (IQ) admission criteria were applied to a random sample and 93.5% failed. Of those same claims, a further sample of DRG 143 was requested of the hospitals with the highest number of claims. 97% failed to meet IQ admission criteria. Since each inappropriate admission cost $2,376, Medicare overpaid $5,393,520 for these admissions. Arizona is #2 in the nation for one-day-stay claims (only one state has more than AZ). 4

5 Causes of Inpatient Denials Per CMS Physician documentation does not support medical necessity of admission, no authenticated (signed) Physician order, or documentation illegible When queried, Physicians unaware of specific Inpatient Admission / Outpatient Observation criteria Physician habit, Admit defaults to Inpatient per CMS Poor patient care management LOS abuses Unnecessary Inpatient admissions Social and / or patient family convenience Before surgery or after surgical recovery Inappropriate site of care 5

6 Per CMS: Confusion About Observation? Misunderstanding of the roles of Physicians and facilities in determining patient status. Confusion over the Medicare rules for appropriate selection of status. Distinction between Inpatient and extended Outpatient Observation is blurred by various payors It is difficult to correct admission errors after-the-fact (i.e., after discharge). Difficult to convince Physicians that the difference is one of billing not medical treatment. 6

7 Per CMS, Now What? Reimbursement Environment in 2013: After Recovery Audit Contractors (RACs) begin denying and recouping payment for Inpatient short-stays, hospitals began admitting more patients to Observation. However, Observation services result in higher patient responsibility for Medicare beneficiaries. Patient complaints registered with CMS, which clarified Inpatient criteria with the Two-Midnight Rule! The Inpatient Rule has been revised for 2015 and Now, for 2016, the definition of Observation services has been revised; and a new payment methodology under OPPS has been established. 7

8 Purpose of Medicare Observation Per CMS Observation is used to evaluate a patient s condition in order to determine the need for acute Inpatient admission. The patient may improve and can be safely discharged, or deteriorate and can be upgraded to Inpatient. 8

9 Definition: Observation Services CMS Manual System, Pub Medicare Benefit Policy says Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short-term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital Inpatients or if they are able to be discharged from the hospital. (up to 48 hours for Medicare FFS beneficiaries until FY 2014) ***Note that managed Medicare and private insurance companies admission status rules may vary from those of FFS Medicare (often 23 hours or 24 hours). 9

10 Use of Observation Status If Physician writes Rule Out = Remember Observation Outpatient Observation is a payment designation, but does recognize that a patient is being evaluated. Observation is NOT a PLACE like Med/Surg, ICU, etc. Can be anywhere convenient in the hospital Patient is placed in a bed for monitoring services, but not admitted to Inpatient status Is paid by Outpatient payment system, ( Part B just like the ED visit) if patient not converted to Inpatient Is rolled into the MS-DRG payment if admitted to Inpatient status (Medicare 72-hour Rule) 10

11 Observation Status* Consider if patient does not meet acute care (now Two-Midnight) criteria and any one of the following apply: Diagnosis, treatment, stabilization, discharge expected <24 hours Treatment, procedure, requires less than 6 hours Clinical condition changing and discharge expected <24h Unsafe to discharge patient to home Complications of Outpatient procedure Extended recovery needed (documented) from anesthesia Symptoms not responsive to at least 4 hr ER treatment Psych crisis requires every 15 minute Observation *Interqual 11

12 Order to Place in Observation Must have Physician order; dated, timed and signed Physician should write place in Observation Physician should not write admit to Observation Medicare will interpret as Inpatient admission Physician should document the purpose of monitoring, and Frequency / type of checks needed to observe and to decide on the status of the presenting medical condition Physician can convert to Inpatient admission status if condition deteriorates Important Note: Beginning FY 2014 with Two-Midnight Rule Medicare beneficiary should be admitted as an Inpatient if physician requests second day of Observation! 12

13 Observation Changes Condition Code 44 Changing Inpatient admission to outpatient Observation status Represents a lower level of care for lesser acuity or reduced intensity of services to be provided Must be prior to discharge date Caution: Changing IP to OBS on discharge date raises a red flag with Medicare UR Committee meets to agree on change of status Physician concurs with UR decision Both processes documented in medical record No claim for Inpatient admission submitted *CMS Manual Pub , transmittal 299, Sep 10, 2004, change Request

14 2016 Observation Comprehensive APC Prior Years Observation Payment CMS has made a single payment for non-surgical encounters with a high-level visit and 8 or more hours of Observation. Also made separate payment for most other services reported on the claim. For 2016, CMS created a C-APC to provide comprehensive payment for all services furnished during a non-surgical Outpatient encounter where the patient receives 8 or more hours of Observation with a high level Outpatient hospital (ED or Clinic) visit. 14

15 2016 Observation Comprehensive APC 2016 Observation Payment CMS finalized the C-APC for Comprehensive Observation Services, but will exclude all surgical procedures from being bundled into the Observation C-APC, regardless of date of service. This means that if a surgical procedure code appears on a claim that would otherwise qualify for the Comprehensive Observation C-APC, the surgical APC payment will be made in lieu of the Observation C-APC payment. CMS will also include all Emergency Department visits, not just high-level ED visits, in the criteria used to qualify for the Observation C-APC, as this is more consistent with a comprehensive payment policy. 15

16 2016 Comprehensive Observation APC C-APC for Observation Stays APC APC 8011 Compre- APC 8009 Extended hensive Observation Assessment and Services Management Services Payment $2,261 $1,234 Criteria Revised for 2016: No surgical procedure (SI = T) on the same day or one (1) day prior, or J1 C-APC 8 or more units of G0378 (OBS services, per hour) OBS services in conjunction with any ED visit level (change from only high level ED visits), clinic visit level, or direct referral to OBS 16

17 Medicare Payment for Inpatient Stays Inpatient Prospective Payment System (IPPS) IPPS pays on the patient status defined by medical condition acuity and intensity of services required to be provided Represents average resource use -- not specific cost of care as indicated by total dollar amount of charges or LOS Each MS-DRG is assigned a relative weight (RW) Each hospital has its own blended rate (BR) the $ payment / DRG, set annually, based on Case Mix, location, % indigent patients, teaching roles, etc. DRG payment = RW x BR. Example: MS-DRG 127 CHF: BR (e.g., $4,159) x RW (1.0239) = $4, payment 17

18 2014 Initial Two-Midnight Rule Admission and Medical Review Criteria for Inpatient Services The FY 2014 IPPS Final Rule modifies and clarifies CMS s longstanding policy on how Medicare contractors review Inpatient hospital admissions for payment purposes. A beneficiary is considered an Inpatient of an acute care hospital and a CAH if formally admitted as an Inpatient pursuant to an order for Inpatient admission by a physician. The order must be furnished by a qualified and licensed practitioner who has admitting privileges at the hospital, who is knowledgeable about the patient s hospital course, medical plan of care, and current condition. 18

19 Two-Midnight Inpatient Benchmark We (CMS) provided hospital inpatient admission guidance specifying that a physician, or other qualified practitioner (herein we will refer to the physician, with the understanding that this can also pertain to another qualified practitioner) should order inpatient admission if he or she expects that the beneficiary s length of stay will exceed a 2- midnight benchmark or if the beneficiary requires a procedure specified as inpatient-only under Page 50944, IPPS Rule 19

20 Two-Midnight Benchmark (con t) Our (CMS) proposed 2-midnight benchmark simply modifies our previous guidance to specify that the relevant 24 hours are those encompassed by 2 midnights. Page 50945, IPPS Rule The benchmark used in determining the expectation of a stay of at least 2-midnights begins when the beneficiary starts receiving services in the hospital. We (CMS) do not believe beneficiaries treated in an Intensive Care Unit should be an exception to this standard, as our 2- midnight benchmark policy is not contingent on the level of care required, or the placement of the beneficiary within the hospital. Page 50946, IPPS Rule 20

21 Benchmark vs. Presumption Benchmark of 2 midnights The decision to admit the beneficiary should be based on the cumulative time spent at the hospital beginning with the initial Outpatient service. In other words, if the physician makes the decision to admit after the beneficiary arrived at the hospital and began receiving services, he or she should consider the time already spent receiving those services in estimating the beneficiary s total expected length of stay. Page 50946, IPPS Rule The time a beneficiary spends as an Outpatient before the formal Inpatient admission does not count as Inpatient time, but may be considered by the physician when determining if the expectation of a stay lasting at least 2-midnights in the hospital is reasonable and generally appropriate for inpatient admission. 21

22 Benchmark vs. Presumption This will enable CMS to identify claims in which the beneficiary received care as an Outpatient for 1 or more midnights, and was subsequently admitted as an Inpatient based on the expectation that the beneficiary would require 2 or more midnights of hospital care. Example: Medicare beneficiary evaluated in ED on 05/01/16 at 11:10 PM; placed in Observation at 2:14 AM on 05/02/16; then admitted as Inpatient at 5:43 AM on 05/03/16 = Occurrence Span Code 72 (in FL35 and 36 ) reflecting dates 05/01/16 05/02/16 22

23 Two-Midnight Benchmark Requires change in thinking about Observation! CMS has responded to a question regarding when a patient is admitted for Observation for one day, and on the second or even third day, the patient s condition deteriorates; and then the patient is admitted as an Inpatient who is discharged one day after admission. The RACs previously would review this as a 1-day stay even though the patient was actually in the hospital for three days. How would this scenario be reviewed under the new 2-Midnight Rule? Per CMS, as soon as the physician believes that a second day of Observation will be needed, an Inpatient order should be written! One CMS rep stated: Under this application of the 2- Midnight Rule, there should be no Medicare Observation stays of more than 1 day! 23

24 Two-Midnight Benchmark What about InterQual or Milliman medical necessity criteria for Inpatient admission? Per CMS, the 2-Midnight Rule will apply even if an admission failed InterQual or Milliman criteria The only (medical review) question will be whether there was a medically documented reason (diagnosis) that required the patient to receive hospital services for at least 2 midnights. even if that reason is that the patient must remain under Observation for at least 2 days. physician may document patient not medically stable to be discharged or patient monitoring should be continued for patient safety 24

25 FY 2016 Revisions 2016 changes to the Two Midnight Rule: If physician expects stay to be less than two midnights: Admission payable on a case-by-case basis based on the clinical judgment of the admitting physician. Documentation in the medical record must support an Inpatient admission is necessary, and is subject to medical review. 25

26 FY 2016 Revisions 2016 changes to the Two Midnight Rule: Per CMS, the following factors (among others) will be relevant: The severity of the signs and symptoms exhibited by the patient. The medical predictability of adverse occurrence to the patient. The need for diagnostic studies that are more appropriately Outpatient services (i.e., do not ordinarily require the patient to remain at the hospital for 24 hours or more) will not meet medical necessity criteria! 26

27 2016 Two-Midnight Rule Good News! RAC Short Stay Moratorium Ending Ended September 30, 2015 After this date, RAC will focus on referrals from QIOs and hospitals with high denial rates 27

28 2016 Two-Midnight Rule Inpatient Reviews for Medical Necessity will be carried out by QIOs CMS expressed confidence in Quality Improvement Organizations (QIOs) reviews instead of the RACs Not all stays of less than 2 midnights will be audited QIOs to review sample of post-payment claims and determine appropriateness of inpatient admission Stays less than 1 midnight prioritized for medical review If sample shows problems, review will be expanded Review process to begin 10/01/15, but review regulation changes effective 01/01/16 28

29 2016 Two-Midnight Rule The QIO may be authorized to refer a provider to the RAC if: Pattern of practices are uncovered such as: High inpatient stay denial rates Consistent failure to appropriately follow 2 Midnight Rule Failure to improve after educational interventions Caution follow your resolution of Medicare Additional Development Requests (ADRs) for Inpatient stays to determine if they are being paid by MAC May want to hold Inpatient stays of less than 2 Midnights for clinical review of documented medical criteria before filing claim 29

30 2016 Two-Midnight Rule Recovery Auditor Contractor (RAC) Reforms: For upcoming contract award period... Look back period for patient status reviews: 6 months from date of service, if hospital submits claim within 3 months of DOS provided Changes in ADR limits: compliance with Medicare rules; diversified limits across all types of claims for a certain provider RAC has 30 days to complete Complex Review, or lose contingency fee There will also be a 30 day wait before sending claims to the MAC to allow for discussion period request to the RAC. 30

31 Impacts on CM Review Process Q: What should the utilization review (UR) committee look for when an Inpatient stay is less than two midnights? A: If there are fewer than two midnights of care after the Inpatient order is written (i.e., less than a 2-midnight stay), the reviewer should determine if one of the following situations applies to the patient s stay: An inpatient-only procedure One or more medically necessary midnights of Outpatient care resulting in at least a 2-midnight stay One or more medically necessary midnights of care at another hospital prior to transfer resulting in at least a 2-midnight stay Unforeseen death, transfer, departure against medical advice, or election of hospice Unexpected medical condition improvement (documented) 31

32 Impacts on CM Review Process New Payment Consideration! Outpatients whose LOS extends beyond 2 midnights will require additional review. Don t lose valid Inpatient admissions because of poor work flow processes; or poor follow-through. Ask patient care management to track every initial status order, compare the patient status at discharge, and analyze if optimum payment methodology carried out. Some Inpatients spanning 2 midnights may be pulled by contractors for medical necessity and efficiency of care review! 32

33 Documentation Efficiency of Care For cases with > 2 midnight stay, review to ensure appropriateness. Was the care provided in a timely and efficient manner? Was there a delay in service that resulted in prolonging the hospital stay? Why was the Cardiac Catheterization performed on day 3 and not on day 2? Was there a weekend delay in Stress test, PET scan, or other specialized service, or in the initiation of therapy services? For social / personal discharge challenges, provide HINN and ensure stay is charged and billed appropriately. 33

34 Implementation of Two-Midnight Rule Most hospitals still implementing or improving Two-Midnight process and/or work flow in 2016: What is your facility s PLAN? Written procedures for Observation vs. Inpatient Status: Case Managers / Utilization Review / Discharge Planners Physicians Patient Access (Registration) Reps PFS Medicare Billers Consider CM Physician team for Inpatient documentation! Involve Inpatient Coder for concurrent review / same day coding Develop checklist for Discharge Planner or Nurse Auditor PRIOR to patient discharge. 34

35 Implementation of Two-Midnight Rule What is your facility s PLAN? Consider pre-bill edit to hold Medicare Inpatient claims that are one-day stays. True one-day stays; no OP services provided prior to Inpatient admission Case Manager or Nurse Auditor Review prior to billing Ensure Part A to Part B billing is carried out if Inpatient admission cannot be medically supported as discussed for Do not want Inpatient less than two-midnight stays denied since QIO may pass on high denial rate to RAC for further reviews! Take specific deficiencies in physician order, documentation and LOS back to physician for review (ideally, back to CM Phys team) 35

36 Observation Services KEY Questions to ASK In what condition will the patient most likely be tomorrow? Better = Observation Is it risky to send the patient home today? Yes = Observation Is it likely I will know whether to admit or send the patient home by tomorrow? Yes = Observation Are vital signs stable? Yes = Observation Will a diagnosis likely be made in 24 hours? Yes = Observation Will treatment, such as IV fluids, require standard monitoring and be complete within 24 hours? Yes = Observation 36

37 Observation Services KEY Questions to ASK Is the patient presenting with a symptom(s) (e.g., chest pain, abdominal pain, TIA) Yes = Observation Is the patient having an unusually long recovery period following outpatient procedure (e.g., pain management issues, cardiopulmonary concerns, urinary retention) Yes = Observation 37

38 Medicare Observation or Inpatient? Admission Decision Test Yes Observation is appropriate. Yes Can condition be evaluated / treated / improved within 48 hours? No Inpatient admission is appropriate. Does condition require hospital Treatment?* No Alternate level of care is appropriate Unsure Additional time is needed to determine if inpatient admission is medically necessary. Observation is appropriate. * The decision to admit a patient as an inpatient requires complex medical judgment, including consideration of the patient s medical history and current medical needs, the medical predictability of something adverse happening to the patient, and the availability of diagnostic services/procedures when and where the patient presents. 38

39 Big Impacts of 2016 Changes Questions?? Linda Corley Xtend Healthcare Ext Office Mobile 39

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