One of the big healthcare stories of 2014 was the inclusion within the 2015 Outpatient Prospective Payment System Final Rule of a provision to remove the requirement for physician certification of all inpatient admissions and restore the previous requirement for certification of only outlier admissions.

Admission certification baffled just about all of us, and we never really found out what it was or how it was to be accomplished. Some developed forms, some developed templates, and some did the best thing and concentrated their wishes on just making it go away. And the latter group won this time. The Centers for Medicare & Medicaid Services (CMS) retracted admission certification and reinstated outlier certification. This regulation, which can be found in the Code of Federal Regulations, 42 CFR 424.13, requires certification of admissions when they become a cost outlier or by day 20 of an inpatient admission, whichever is earlier. The regulation defines certification as notation by a physician of the reasons for continued hospitalization of the patient for medical treatment or medically required inpatient diagnostic study, the estimated time the patient will need to remain in the hospital, and the plans for post-hospital care, if appropriate.

Note that these requirements are not new; the same requirements were in place prior to the introduction of the two-midnight rule and also represented the elements of certification required for admission certification under the two-midnight rule, with a slight modification. And it should be pointed out that, to my knowledge, not one hospital has ever had a claim denied prior to the two-midnight rule for lack of outlier certification, nor has a single hospital ever reported a denial during any of the probe-and-educate reviews under the two-midnight rule for lack of certification. Most, if not all, denials were for lack of either a compliant admission order or lack of an expectation of a two-midnight stay. 

So, what does this new requirement really mean? First, every admission needs an authenticated order from a qualified practitioner. Nurse practitioners, physician assistants, and residents can now once again independently admit patients if state law and hospital rules allow it. Co-signature by a physician is no longer needed if those conditions are met.

What about day 20/outlier certification? Well, based on correspondence I have had with both a CMS representative and a Medicare Administrative Contractor (MAC) representative, I can now say that we have absolutely no idea. When talking to the CMS representative, I was told that Medicare only wants to pay hospitals for care provided to patients who need to be cared for in a hospital.

So if a hospital has a progress note from a physician (and here it does need to be a physician) that describes why the patient is in the hospital, such as ongoing septic shock or decompensated, end-stage heart failure, for example, the outlier stay is certified. That’s it. If you don’t have that note (because the patient does not need to be in the hospital and you are providing hospital care as a convenience), you should not be charging Medicare for the care, so certification is not necessary. But then the representative from a MAC told me that based on their reading of the regulation, if they were to audit this, they might be looking for a formal certification statement stating a reason for hospital care, expected length of stay, and discharge plans – but they are waiting for further guidance from CMS and have no imminent plans to audit.

It should also be noted that, again, certification is needed by day 20 or when cost outlier status is reached, whichever comes earlier. Those in hospital finance know that cost outlier status calculations are quite complex, and determining cost outlier status concurrently would require concurrent entry of all charges for all services provided to the patient, plus a real-time calculation using CMS’s nearly incomprehensible formula. In reality, that could never be determined as it occurs.

So, what do I advise? Since a hospital has never been denied for lack of certification, and the auditors are busy with short stays and other topics, I don’t think there is an urgency to change processes now.

Don’t develop a new form or template just quite yet. It is clear that CMS and the MACs do not agree themselves, so the last thing you should do is try to get your finance people to tell you the moment a patient hits cost outlier status and then demand that your physicians fill out another form when that moment occurs.

For now, just be sure patients who are in the hospital need to be in the hospital (and shouldn’t you be doing that every day already?) And also ensure that the progress notes indicate why patients are still in the hospital (which also should be being done already.)

Keep listening to Monitor Monday and reading, and when CMS issues further guidance, I will report it immediately.

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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