HFMA WEBINAR. CMS s Two-Midnight Rule: How Will It Impact Short-Stay Cases?

Transcription

1 HFMA WEBINAR CMS s Two-Midnight Rule: How Will It Impact Short-Stay Cases? Date: September 24, 2013 Time: 2:00 3:30 p.m. Central (12:00 1:30 pm Pacific/1:00 2:30 pm Mountain/3:00 4:30 pm Eastern) Follow this link (or paste it into a browser) to connect: Please log in 10 minutes early and test your computer as this is a new platform: Enter platform where it says guest type in your first and last name only it is very important especially if you need CPE credit so that your attendance is accounted for You will Not be using your telephone, but will hear the audio via your computer speaker Online live seminars are broadcast over the web via Adobe Connect. You'll need a computer with a browser, Adobe Flash Player 10.1, and Internet connection. Test your connection to Adobe Connect: Login issues to check first: Are you connected to the Internet? Disable popup blocker software. Clear the browser's cache. Try connecting from another computer. Are you accessing the correct URL? Audio Issues: Close all Microsoft Applications, especially Outlook and Messenger. Having Outlook open absorbs almost 50% of the bandwidth which may cause intermittent audio interruptions. If you have questions regarding registration or connection please call HFMA Member Services at ( , ext 2). CPE Information: To receive CPE Credits for this webinar you must participate in online polling during the webinar and complete the online program evaluation within 2 working days. After 2 working days online programs will be inactive and you will not receive CPE Credit. The URL below will take you to our on-line evaluation form. You will need to enter your HFMA I.D. # (found in your confirmation ) You will also need to enter this Meeting Code: 13AT52 URL: You may also connect directly from the last slide of the live webinar Your comments are very important and enable us to bring you the highest quality Programs! To review your CPE information, please visit the HFMA web site at log into your profile, and retrieve all CPE information (by date) within your "CPE Center.

2 CMS s Two-Midnight Rule: How Will It Impact Short-Stay Cases? Joe Becht, MBA, CPA Executive Vice-President, Client Services Hugh Aaron, MHA, JD Executive Vice-President, Training Randy Ferrance, DC, MD Chief Medical Officer Joe McMenamin, MD, JD Chief Executive Officer Clinical Advisory Services, LLC (804) Copyright 2013 Clinical Advisory Services, LLC. All rights reserved. About the Speakers The speakers are all co-founders and principals with Clinical Advisory Services, LLC (CAS). CAS provides training and advisory services for hospitals and physicians relating to the correct assignment of patient status (i.e., observation versus inpatient) for Medicare billing purposes. 2 1

3 Before We Get Started... This program is provided for educational purposes only. Clinical Advisory Services, LLC (CAS) is not a law firm and cannot give legal advice. Please address to hospital counsel all questions regarding application of CMS s rules to specific cases. This program is based on CMS policy published as of mid- August 2013, and on MLN SE1333, published September, We anticipate that CMS may issue additional subregulatory guidance on these issues. That additional guidance may change some of the content in this presentation. 3 So What s the Big Deal? In 2012, the CERT contractor found that Medicare Part A inpatient hospital admissions for 1-day stays or less had an improper payment rate of 36.1 percent.... the RAs have recovered more than $1.6 billion in improper payments because of inappropriate beneficiary patient status IPPS Final Rule 4 2

4 Polling Question 1: Over the past year or so, approximately what percentage of your hospital s RA (formerly, RAC) denials have been based on a determination by the RA that the patient did not qualify for inpatient status or did not meet inpatient admission criteria? a) 75% or greater b) 50% to 74% c) 25% to 49% d) 24% or less Big Change #1 New Method of Determining Whether a Case Qualifies for Part A (i.e., DRG) Payment 6 3

5 The Current Way (Before October 1, 2013) Whether a case qualifies for Part A payment is based on whether the patient s clinical condition justified an inpatient level of care In theory, the decision is up to the physician based on his/her complex medical judgment In reality, CMS auditors (particularly the Recovery Auditors) frequently challenge those decisions using relatively subjective inpatient admission criteria 7 Polling Question 2: Over the past year or so, approximately what percentage of your hospital s observation patients spent two or more midnights in the hospital receiving observation services? a) 75% or greater b) 50% to 74% c) 25% to 49% d) 24% or less 8 4

6 The New Way CMS will presume that a case qualifies for Part A (i.e., DRG) payment if (1) The admission was for an inpatient-only procedure OR (2) The physician wrote an inpatient admission order and certification based on the expectation that the beneficiary would require care spanning at least 2 midnights AND The patient actually spent at least 2 midnights in the hospital 9 The New Way (cont d) [Medicare] review contractors are instructed in the final rule that inpatient hospital claims with lengths of stay greater than 2 midnights after the formal admission following the order will be presumed generally appropriate for Part A payment and will not be the focus of medical review efforts absent evidence of systematic gaming, abuse, or delays in the provision of care in an attempt to qualify for the 2-midnight presumption IPPS Final Rule 10 5

7 The New Way (cont d) If a hospital is found to be abusing this 2-midnight presumption for nonmedically necessary inpatient hospital admissions and payment (in other words, the hospital is systematically prolonging the provision of care to surpass the 2-midnight timeframe), CMS review contractors would disregard the 2-midnight presumption when conducting review of that hospital IPPS Final Rule 11 The New Way (cont d) If... the beneficiary is in the hospital for less than 2 midnights after the [inpatient admission] order is written, CMS and its medical review contractors will not presume that the inpatient hospital status was reasonable and necessary for payment purposes IPPS Final Rule 12 6

8 The New Way (cont d) For inpatient stays of fewer than 2 midnights... Medicare review contractors will (a) evaluate the physician order for inpatient admission to the hospital, along with the other required elements of the physician certification, (b) the medical documentation supporting the expectation that care would span at least 2 midnights, and (c) the medical documentation supporting a decision that it was reasonable and necessary to keep the patient at the hospital to receive such care IPPS Final Rule 13 The New Way (cont d) Inpatient-only procedures will automatically qualify for Part A payment Under detailed billing instructions issued September, 2013, this automatic qualification will not apply if the procedure was performed before the patient was admitted as an inpatient MLN SE1333, Temporary Instructions for Implementation of Final Rule 1599-F for Part A to Part B Billing of Denied Hospital Inpatient Claims, Network-MLN/MLNMattersArticles/downloads/SE1333.pdf 14 7

9 Potential Implications Where the patient actually spent at least 2 midnights in the hospital, it appears that hospitals may not have to continue to deal with having their physicians admission decisions second-guessed by auditors Although the auditors will continue to perform other types of reviews (e.g., coding reviews, medical necessity reviews for certain tests and procedures, etc.) 15 Potential Implications (cont d) Where the patient spent fewer than 2 midnights in the hospital and the case was billed as inpatient Part A (bill type 011x), it appears that CMS auditors will be free to review the appropriateness of the inpatient admission and potentially disallow the Part A payment 16 8

10 Potential Implications (cont d) CMS anticipates that, under the new 2 midnight policy, there will be an increase in the number of cases paid under Part A To keep the change budget neutral, CMS is making a 0.2% reduction in the 2014 operating standardized amounts 17 Operational Ramifications Hospitals may need to educate their physicians about these changes so the physicians understand the impact of the new rule on the observation versus inpatient admission decision If a physician anticipates a stay of at least 2 midnights, she may want to consider ordering an inpatient admission rather than observation care even if that is counter to way she did things in the past 18 9

11 Operational Ramifications (cont d) The inpatient order will become even more important the hospital may need to work with its medical staff (and administrative team) to augment the formality of the inpatient order and certification process In particular, the hospital may need to take additional steps to ensure documentation of compliance with CMS's new enhanced order and certification requirements 19 Operational Ramifications (cont d) Through its UR Committee, the hospital may need to implement a formal internal review process of all inpatient cases where the patient did not actually spend 2 midnights in the hospital Presumably, the UR Committee would need to complete this review before billing the case as inpatient bill type (i.e., bill type 11x) 20 10

12 Operational Ramifications (cont d) [U]nder this revised policy, CMS's medical review efforts will focus on inpatient hospital admissions with lengths of stay crossing only 1 midnight or less after admission IPPS Final Rule 21 Big Change #2 Application of the Timely Filing Deadline to Inpatient Part A Denials 22 11

13 #2: Timely Filing Deadline The Current Way (per March 2013 CMS Ruling) If a case is denied for inpatient Part A payment and the hospital appeals and loses, the hospital can rebill the case and receive full Part B payment (including separate payment for preadmission services) even if more than one year has passed since the date of service This is consistent with the position that some ALJs have taken 23 Polling Question 3: If a hospital bills a one midnight stay after October 1, 2013 as an inpatient case, the RA denies the admission, the hospital appeals and loses, and it has been more than one year from the date of service; the Medicare payment for the case will be: a) An inpatient Part A (bill type 11x) DRG payment b) An outpatient Part B (bill type 13x) payment c) An inpatient Part B (bill type 12x) payment for ancillary services only d) None of the above 24 12

14 #2: Timely Filing Deadline The New Way (Admissions After October 1, 2013) If a case is denied for inpatient Part A payment and the hospital appeals and loses, and it has been more than one year since the date of service, the hospital will receive $0 25 #2: Timely Filing Deadline Potential Implications Hospitals must ensure that all cases billed using an inpatient Part A bill type (i.e., 11X) qualify for Part A payment 26 13

15 #2: Timely Filing Deadline Operational Ramifications Hospitals may want to implement 100% pre-billing review of inpatient cases with a length of stay of fewer than 2 midnights 27 Big Change #3 Payment for Inpatient Admissions That Do Not Qualify for Payment Under Part A 28 14

16 #3: Payment for Admissions that Do Not Qualify for Part A Payment The Current Way The cases are paid at a reduced, so-called ancillaries only, rate unless the hospital is able to take advantage of the Condition Code 44 process This ancillaries only rate is typically far less than the corresponding DRG rate and is typically even less than the amount the hospital would have received had the patient been treated as an outpatient 29 Polling Question 4: Over the past year or so, approximately what percentage of your hospital s Medicare inpatient admissions were paid under Medicare s inpatient Part B (bill type 12x) "ancillaries only" payment methodology? a) 1% or less b) 2% to 5% c) 6% to 10% d) 10% or greater 30 15

17 #3: Payment for Admissions that Do Not Qualify for Part A Payment The New Way If an inpatient case is determined to not qualify for inpatient Part A payment (either pursuant to an internal self-audit or a contractor denial), the hospital will receive full outpatient Part B payment for (i) all services furnished during the inpatient stay that would have been payable on an outpatient claim 1 and (ii) preadmission services furnished during the so-called three day payment window 1 Except for services that specifically require outpatient status (e.g., observation) that were furnished during the inpatient stay 31 #3: Payment for Admissions that Do Not Qualify for Part A Payment Potential Implications This allows hospitals to generally receive higher payment than was formally available for inpatient admissions that are determined after discharge to not qualify for Part A payment The difference could be $1,000s per case, particularly for surgical patients 32 16

18 #3: Payment for Admissions that Do Not Qualify for Part A Payment Operational Ramifications The decision to convert a case from inpatient to outpatient will presumably still require a decision of the hospital s UR committee 33 Potential Next Steps For Hospitals 17

19 Polling Question 5: Our hospital s physicians understand the coming change in how to determine patient status: a) All of them b) Most of them c) Some of them d) Very few of them e) I wonder sometimes if our physicians even understand the old process 35 Potential Next Steps #1 May need to retrain physicians and case managers to focus on expected length of stay rather than the inpatient admission criteria they are accustomed to using #2 May need to train physicians and case managers on CMS's enhanced order and certification requirements #3 May need to train physicians on documenting rationale supporting expected length of stay and the need for the patient to be in the hospital for services 36 18

20 Potential Next Steps (continued) #4 May need to develop a strategy/policy with respect to how inpatient admissions with an actual length of stay of fewer than 2 midnights are going to be billed #5 May need to implement 100% UR/billing review of all cases to be billed under Part A with an actual length of stay of fewer than 2 midnights 37 Potential Next Steps (continued) #6 May need to develop a formal process for converting inpatient Part A cases with a length of stay of fewer than 2 midnights to inpatient Part B (don t overlook need to follow CMS's UR committee requirements and beneficiary notice requirements) #7 May need to make sure that everyone understands that if you lose appeals of Part A payment denials, you may get $

21 Questions 39 Special CMS Address for Questions Relating to the New Patient Status Regulations 40 20

22 To Complete the Program Evaluation The URL below will take you to HFMA on-line evaluation form. You will need to enter your member I.D. # (can be found in your confirmation when you registered) Enter this Meeting Code: 13AT52 URL: Your comments are very important and enables us to bring you the highest quality programs! 41 21