The Centers for Medicare & Medicaid Services (CMS) recently quashed a flurry of media reports claiming that a delay of inpatient short stays would be in effect until January 1, 2016.

During Tuesday’s open door forum, CMS representatives updated providers on several topics, including the resumption of audits of short inpatient stays. Contrary to multiple reports in the media, there is no further delay in audits. CMS will begin providing quality improvement organizations (QIOs) with monthly reports of the volume of short inpatient admissions shortly, and the QIOs can start requesting records at that time. CMS indicated that small hospitals will have a minimum of 20 records reviewed per year, with at least 50 per year for large hospitals.

Defined on the call as admissions of one or two days, short inpatient admission reviews will shift to the Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs) starting Oct. 1, 2015. CMS wants these short stay reviews to be collaborative and educational for providers, noting that the QIOs are not “paid to deny” as the Recovery Audit Contractors (RACs) are. Once the QIO receives the record, it will have 30 days to review it and render a decision. At that point, the QIO will contact the hospital and schedule an educational session. During this session, if the hospital provides additional information, the QIO may reverse its denial. If the denial is upheld, the QIO will notify a Medicare Administrative Contractor (MAC) to recoup the payment. At that point the hospital has the option of engaging in the formal appeal process or accepting the denial and rebilling part B.

Hospitals with high error rates will be referred to a RAC starting on Jan. 1, 2016 for more intensive auditing. The RACs only will be allowed to audit admissions occurring on and after Jan. 1, leaving all 2015 admissions off-limits. CMs stated that the number of records to be audited by the RAC and the duration of auditing by the RAC will be determined by the hospital’s initial error rate found by the QIO and ongoing error rate found by the RAC. Once the hospital’s error rate has dropped, the RAC will refer the hospital back to the QIO for routine auditing.

CMS also noted that the initial audits by the QIOs will adhere to the current two-midnight guidance as set out in the 2014 Inpatient Prospective Payment Rule and clarified in several subsequent CMS publications – until Jan. 1, 2016, at which time any changes that are made to the two-midnight rule as part of the 2016 Outpatient Prospective Payment Rule will be incorporated.

Providers may have been relieved to see media reports last week about a “delay in enforcement until 2016.” Those reports couldn’t be further from the truth. As you can see, every short inpatient admission as of Oct. 1, 2015 will be reported to the QIO and subject to audit. And the results of that audit will determine if your hospital is referred to the RAC for even more auditing.

Now is the time to ensure that you are complying with the two-midnight rule, because on Oct. 1, you’ll probably be busy with ICD-10.

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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