I am climbing back on my soapbox today to try to get the Centers for Medicare & Medicaid Services (CMS) to listen to me regarding a very important beneficiary rights issue.

When guidance for the two-midnight rule came out, CMS established a new condition of payment, requiring the admission order to be authenticated prior to discharge. Many protested this, but CMS was unwavering. But the agency also took it to another level, noting in its Jan. 30, 2014 sub-regulatory guidance that “if the physician or other practitioner responsible for countersigning an initial order or verbal order does not agree that inpatient admission was appropriate or valid, he or she should not countersign the order and the beneficiary is not considered to be an inpatient. The hospital stay may be billed to Part B as a hospital outpatient encounter.”

This is a good thing. If a doctor is called at 3 a.m. and gives an admission order while half-asleep and comes to the hospital in the morning only to realize that it should have been observation, the doctor simply has to order observation and not cosign the verbal order. If this situation occurs, the registration staff simply would change the patient’s status to outpatient and ignore the original admission order.

But is that right? When CMS established the condition code 44 process, CMS required the process of changing an inpatient to outpatient to occur prior to discharge in order to ensure that the beneficiary was fully informed.

So, is CMS now throwing the beneficiary’s rights out the window? When that 3 a.m. verbal order is given, the patient is formally admitted and given a copy of the Important Message from Medicare. The patient now thinks he or she is an inpatient and now responsible for Part A financial obligations. When the physician chooses not to sign the verbal admission order, CMS does not require the patient to be informed that they are now responsible for Part B financial obligations.

This is probably not a big deal with short stays, but what if the inpatient spends four days in the hospital and goes to a skilled nursing facility (SNF), and after discharge the hospital realizes that the admit order was not signed? They will bill outpatient part B and now the patient would be responsible for the SNF cost.

To go further, if that patient felt that he or she was being discharged from the hospital prematurely and contacted the quality improvement organization (QIO) to appeal their discharge, the QIO would accept that appeal because the patient is an inpatient. The QIO cannot accept appeal requests from outpatients; that is outside their scope. Yet, no matter how the QIO rules, if the admission order is not authenticated prior to discharge, does the whole admission suddenly vanish? Does that not mean that the QIO improperly reviewed an outpatient appeal?

The solution to the problem is simple; CMS needs to acknowledge that it made a mistake. Tell hospitals to bill these as provider-liable Part A claims. If CMS wants to continue to allow this with admission orders given in error, that’s fine, but patient notification must be required.

Remember, CMS, it’s all about the patient.

About the Author

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at Accretive Physician Advisory Services at Accretive Health. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the American Case Management Association and a Fellow of the American College of Physicians. 

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