ED. NOTE: The following is a question and answer session between and Steven J. Meyerson, M.D., Vice President of Physician Advisory Services at Accretive Health, Inc,. concerning the important subject of bridging the gap between revenue cycle management and case management.

RM: (For) emergency rooms with chest pain centers, what status is recommended, observation or ED?

A: ED should do initial evaluation, including H&P, EKG and first set of cardiac enzymes (troponin). Once the ED physicians decide the patient can’t be discharged from the ED, the admitting physician needs to do a risk stratification (in some hospitals, this may be done by the EDP). Clearly the patient should be admitted if evidence of STEMI or NSTEMI (exists), or if the clinical impression is that the patient has unstable angina. It is recommended that the hospital develop a protocol for management of low- to moderate-risk patients. Since the evaluation of these patients can take 24 hours or more, they should be placed in outpatient observation status. It would not be appropriate to extend an emergency room visit for this duration. In addition, the hospital will see additional revenue if it bills for observation services instead of an ED visit.

RM: Do you think that the prevalence of observation is something we will see more of?  How do you propose to manage them?

A: Many hospitals are using observation more because they are afraid of RAC audits of short inpatient stays, or because their managed care plans are insisting on use of observation. Hospitals may not be using physician advisors to their best advantage, since physician advisors can recommend admission based on an overall clinical review rather than narrow screening criteria (such as InterQual). Defensive medicine on the part of ED physicians makes them more reluctant to discharge patients who might otherwise be managed in an office setting. A lack of primary care physicians available for follow-up also encourages treating and working them up in the hospital. Placing in observation reduces ED LOS and may contribute to increased patient satisfaction.

For all these reasons, the use of observation is likely to remain high and may even increase although the proper application of admission criteria and use of secondary review could mitigate this trend.

Hospitals should track LOS for observation patients and review them daily for admission or discharge. Few should remain in observation beyond 48 hours. Segregating observation patients into observation units allows hospitals to improve timeliness of their workups.

RM: For (an) IP only list, what if there are NO orders before the surgery (and) all orders are written after the procedure?

A: This is definitely a problem for the hospital. CMS has said that inpatient procedures must be done on inpatients, and they have interpreted this to mean they have to be formally admitted before the procedure is performed

Per the Federal Register, Outpatient Prospective Payment System final rule, November 10, 2005:

“It is important that a system is in place to ensure an inpatient admission order is present in the medical record to designate that the patient is an inpatient prior to the patient receiving the inpatient only procedure. When a record is reviewed and the order was obtained after the inpatient only procedure the procedure must be removed from the DRG grouping. The hospital will not receive payment for the procedure since the procedure will not be included in the DRG grouping and cannot be billed under Part B.”

RM: What type of CM-to-patient ratio would you suggest to be able to accomplish touching all of the aspects that you speak of?

A: As we discussed on the live Webinar, it really isn’t possible to recommend a CM: patient ratio because there are so many variables, including the hospital’s CMI, percentage of Medicare vs. commercial patients, the staffing model, scheduling, training, mix of RNs and social workers, and so on. There have been many articles written on this subject and it has been discussed at length on the ACMA LearningLink. This article was not intended to address this complex issue.

RM: Can you also provide the regulation that says we have to document the time of delivery of the IM?

A: Follow this link for the explanation below and for a link to download the new IM form.

The latest versions of the “Important Message from Medicare” (Form CMS-R-193) and the “Detailed Notice of Discharge” (Form CMS-10066), updated as of July 20, 2010, are posted on the Centers for Medicare & Medicaid Services (CMS) Beneficiary Notices Initiative (BNI) website ( Manual instructions are also posted. Please note that the latest version of the “Important Message from Medicare” requires hospitals to note the time of delivery. Hospitals and Medicare Advantage Organizations (MAOs) may use these versions immediately, but use is not required until April 1, 2011. After that date, the forms with approval dates of May 2007 will no longer be valid.”

RM: If a (patient) goes from (observation) to IP, can both be billed?

A: Yes, you can bill for observation, but payment will be rolled into the inpatient admission so there will be no payment for the observation APC.

RM: Just a comment: For Medicare patients, the three-day qualifying stay can occur within 30 days prior to the SNF admission.

A: Agreed.

RM:  Can you provide the regulation that says the (patient) has to be informed of change of status? Thank you.

A: I found the following Q&A from MLN Matters, Number: SE0622:

RM: Why has CMS required that the patient still be in the hospital when his or her status is changed from that of an inpatient to outpatient? Most hospitals have agreements with QIOs for UR, and determinations about medically unnecessary admissions can be decided days or weeks after the patient leaves the hospital.

A. The patient rights (CoP in §482.13 of the regulations) require a hospital to protect and promote each patient’s rights. Medicare beneficiaries have the right to participate in treatment decisions and to know their treatment choices. Beneficiaries are also entitled to receive information about co-insurance and deductibles. CMS has a duty to protect these rights. Requiring that the decision resulting in a change in patient status be made before the beneficiary is discharged is intended to ensure that the patient is fully informed about the change in status and its impact on the co-insurance and deductible for which the beneficiary would be responsible. For example, if a patient has already met her Part A deductible, informing the beneficiary a month after discharge that that she will now be responsible for additional coinsurance as an outpatient could impose a financial hardship.

RM: Should Code 44 be used while the patient is still in the emergency room? (For example): admitting physician writes (inpatient), CM talks with him, it’s changed to (observation) before (the patient)  leaves ED. Is this a code 44?

A: Yes. Any time a Medicare patient’s status is changed from inpatient to outpatient, the Condition Code 44 procedure should be utilized.

RM: (A patient is admitted) for OR. If (an) ankle (is) in extended (recovery), changed to inpatient one day post op, then back to (observation) the following day, is there any way to bill for this outpatient surgery?

A: If I understand the question, the patient had outpatient surgery and then was admitted, followed by return to outpatient status with Code 44.

If the admission had been medically necessary and had been allowed to stand, under the three-day rule the outpatient procedure would have been rolled up into the DRG for the inpatient stay and would not have been billed separately. However, the Code 44 procedure canceled the admission, and according to CMS rules, when Code 44 is used it is as if the admission had never occurred. Therefore, the entire stay would be billed as outpatient. Since the surgery was performed as an outpatient, it would be billed as outpatient surgery.

RM: If a physician refuses to admit a patient for a designated Inpatient-only procedure, can it be taken through the UM committee for admission, and if so, can the UM committee override the attending physician’s order?

A: A patient can only be admitted to a hospital by a physician or non-physician provider allowed to admit by state law and hospital bylaws. There is no CMS procedure that allows a UR Committee to admit a patient.

RM: (A) RAC denies a chart which is reviewed by a RN. (For) the first level of appeal with the MAC, are there any clear guidelines (about) who should be reviewing that appeal? Can the MAC just have a RN Review, or does it have to be by a physician?

A: According to CMS, “each RAC employs certified coders, nurses, therapists and a physician CMD.” Each RAC region has a single medical director. There is no regulation that requires the MAC to have physician reviewers.

RM: Can you submit a 12x bill on a RAC denial?

A: Yes, in most cases you can submit a 12x bill. If the inpatient stay is denied as part of a RAC audit, the 12x bill for ancillary services (Medicare Part B) can be submitted given that it is not past Medicare timely filing limits.

About the Author

Steven J. Meyerson, M.D., is Vice President of Physician Advisory Services at Accretive Health, Inc. where his role includes physician education on RAC activities and the latest Medicare guidelines. Prior to his employment at Accretive Health, Dr. Meyerson served as Medical Director of the hospitalist program at Baptist Hospital of Miami and then for 4 years was full time Medical Director and Physician Advisor for Care Management at that hospital. He is Board Certified in Internal Medicine and Geriatrics. He has distinguished himself by creating innovative service lines and managing education for Accretive’s Physician Advisory Services.

RACs Identify $162 Million in Overpayments in Q2 FY 2011 Alone; $77 Per Month For Every Hospital Bed in the U.S.

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