Keeping up with changing Medicare regulations is nearly impossible. It is estimated that the Code of Federal Regulations is currently over 175,000 pages. There are currently over 37,000 guidance documents on the website of the Centers for Medicare & Medicaid Services (CMS). 

CMS does its best to notify interested parties of changes with an email subscription and RSS feeds. But occasionally, important notices slip through. Such was the case in 2015, when CMS eased the rule for billing inpatient-only surgeries without an inpatient order written prior to surgery. That notice was stuck in the middle of the April 2015 Outpatient Prospective Payment System (OPPS) update.

It was a good thing, opening up the three-day payment window to bill inpatient-only surgeries, and luckily, providers noticed it. But one of the recent changes to their manuals that was not publicized has significant implications for all providers and deserves review. In February, CMS updated the Quality Improvement Organization (QIO) Manual, Chapter 9 – Sanction, Emergency Medical Treatment and Labor Act (EMTALA), Fraud and Abuse. The last update was done in 2003, when the manual was 68 pages long, and the new update increases it to 104 pages. It is now clear that CMS plans to make the quality improvement organizations (QIOs) take the oversight of quality of care much more seriously.

CMS is requiring the QIOs to set up a formal process with which to review quality issues. In typical government fashion, the QIO will be required to create a new bureaucracy to handle this task, first by forming a sanction committee, which initially reviews potential quality issues to determine if there is a pattern of care (defined as over three instances in separate admissions, or gross and flagrant violations that present an imminent danger to the health, safety, or well-being of a program patient or places the program patient in high-risk situations unnecessarily). If that is found, the sanction committee then reports its findings to a sanction panel, which then meets with the provider and actually determines if a quality issue is present after discussing the situation (with legal representation present, if desired). If the sanction panel determines that the issues represent a pattern of poor quality or represent a gross or flagrant quality issue, they are required to refer the provider to the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) for further investigation and action.

The QIO will be looking at three standards. The first is medical necessity, with CMS providing the example of a doctor placing a pacemaker in a patient who does not require one. Next is documentation of medical necessity. If a doctor does not document the medical necessity for the services they are providing, even if that care is medically necessary, that is a violation. And third is the quality of care, with CMS providing the example of a doctor whose patients are readmitted because they were discharged prematurely.

While no one would argue that a doctor who places pacemakers that are not medically necessary should face consequences, the procedure laid out by CMS may catch many other “less guilty” providers in its quality net. For example, documentation of medical necessity for total joint replacement is an area of increased scrutiny by the Medicare Administrative Contractors (MACs), with denial rates around 30 percent recorded in recent audits. Based on these new referral criteria, if a physician has more than three joint replacements denied for lack of documentation of medical necessity, it could lead to a formal review by the QIO and sanctioning by the OIG, including the possibility of a fine or even exclusion from Medicare. And even if there is no fine, a sanctioned physician must notify every patient that he or she is under sanction; imagine the effect on a physician’s reputation if that happened. And how will the QIO determine that a readmission was premature? That can be a very subjective finding, with major consequences for the physician and the hospital.

Since I know many RACmonitor readers count on me to be not only informative but critical, allow me to criticize CMS on some relatively minor issues in this new update. In the appendix, the agency provides several examples of cases that are walked through the review process. In one example of a patient with thrombophlebitis, the QIO reviewer reports that “the edema and redness of the legs were bilateral, not just contralateral. There also was not contralateral redness.”

The use of the word “contralateral” makes no sense at all. Did the reviewer mean the redness was bilateral and not just unilateral? And if it is bilateral, how can there not be contralateral redness? From the perspective of either leg, there is contralateral redness. The credibility of the reviewer is totally lost by the use of incorrect terminology, and CMS’s reputation takes a hit for letting this egregious error get through on two versions of the manual.

In another example, a physician was faulted for asking a patient with crushing chest pain to have his family drive him to XYZ Hospital, where he was rounding, so he could see the patient in the emergency department. Unfortunately, XYZ did not have a coronary care unit, and the QIO reviewer felt that the doctor “should have instructed the patient’s family to take him” to XXX Hospital, which was only half a block from XYZ, since XXX has a coronary care unit.

Now, perhaps in 2003, when the manual was last updated, it was acceptable to have a patient with crushing chest pain be driven by family to the hospital, but that is far from the standard of care in 2016. This case should have been modified to indicate that “the patient should have been instructed to call 911.”

This patient also had an abnormal arterial blood gas (ABG) on admission, and it was felt that the physician did not adequately address the abnormal findings in the medical record. In testimony, the physician stated that he was aware the patient’s ABG was similarly abnormal in the past, and he asserted that this did not need additional evaluation. The QIO reviewer responded that “the ABGs, at a minimum, should have been repeated to ascertain if there was something that needed to be addressed, either prophylactically or therapeutically. The fact that the ABGs had been that abnormal in the past is not relevant. The acute exacerbation of a chronic lung disease can cause havoc with the treatment of a patient.”

In this case, the QIO reviewer is, in my opinion, suggesting that the patient be subjected to a painful test with potentially serious side effects, whereas requesting that the physician improve documentation would have resolved the quality issue.

My nitpicking of the manual’s case examples should not detract from the message that CMS has sent with these modifications. They are giving the QIO the means and the methods to ensure that beneficiaries are receiving quality care, but their broad definition of quality and their codifying the actual review process suggests that we can expect a lot more quality investigations than ever before going forward.

It would be wise for every hospital’s risk and compliance departments to review the new manual and ensure that processes and educational efforts are in place to keep your providers from receiving an OIG sanction.

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 Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians.

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