CMS Provides Guidance to Hospitals on the Physician Certification and Inpatient Admission Order Requirements Under the New Inpatient Rule

On Oct. 1, changes to requirements of documentation for Medicare inpatient admissions were to take effect. The changes, which were implemented pursuant to the Hospital Inpatient Prospective Payment System final rule for the 2014 fiscal year, issued on Aug. 2, will have a significant impact on hospitals’ inpatient admissions documentation protocols. On Sept. 5, the Centers for Medicare & Medicaid Services (CMS) released additional guidance intended to provide clarity specifically for the physician inpatient order and certification requirements to be implemented on Oct. 1. Although the guidance provided additional details regarding these matters, some questions still remain. 

The new final rule finalized CMS policy changes to Part B inpatient rebilling, the definition of an appropriate inpatient hospital admission, and inpatient admission and certification requirements. On Sept. 26, CMS announced that for a period of 90 days, beginning on Oct. 1, it will not permit Recovery Audit Contractors (RACs) to review inpatient admissions of one midnight or less with dates of service of Oct. 1 through Dec. 31, 2013. During this time, CMS will instruct Medicare Administrative Contractors (MACs) to review 10 to 25 inpatient hospital claims, per hospital, spanning one midnight or less. The probe samples will be conducted on a pre-payment basis and will be utilized by the MACs to evaluate hospitals’ compliance with the new inpatient rule. MACs will provide feedback to CMS to determine if additional education and guidance needs to be developed, as well as provide education to any hospital in which the MAC identifies issues during the probe reviews. 

Although CMS is delaying full enforcement of the two-midnight rule, hospitals should begin implementing the certification and inpatient admission order documentation requirements. In the final rule and also the Sept. 5 guidance, CMS noted that under Section 1814(a) of the Social Security Act, a physician certification of medical necessity of inpatient services is a condition of payment for the hospital inpatient services under Medicare Part A. An order to admit a patient as an inpatient is a necessary element of the physician certification. CMS explained that the physician certification, which includes the inpatient order, is considered (along with other documentation in the medical record) evidence that hospital inpatient services were medically necessary and reasonable. 

CMS also announced that inpatient certification begins with the order for inpatient admission. The inpatient admission order must be furnished before or at the time of the inpatient admission by a qualified ordering practitioner. A qualified ordering practitioner is any practitioner who is a) licensed by the state to admit inpatients to hospitals; b) granted privileges by the hospital to admit inpatients to a specific facility; and c) knowledgeable about the patient’s hospital course, medical plan of care, and condition at the time of admission. Although an inpatient admission must be ordered by a qualified practitioner, CMS noted in its Sept. 5guidance that a practitioner who lacks the authority to admit inpatients (such as a physician assistant, resident or registered nurse, for example) still may write the admitting orders that define the patient’s initial inpatient care. In this scenario, the non-qualified practitioner may, upon discussion with and at the direction of the ordering practitioner, document the order or verbal order as long as the order identifies the qualified ordering practitioner and is authenticated by that person prior to discharge. 

CMS instructed that the specificity requirements outlined in the final rule are most clearly met by the use of the term “inpatient” in the admission order. However, without this term, the order may under certain circumstances still be deemed appropriate if the intent to admit as an inpatient can be interpreted from the remainder of the medical record. However, failure to include the term “inpatient” in the inpatient admission order may increase the odds that a contractor will determine that the order did not satisfy the inpatient admission requirements

In addition to the inpatient order requirement, effective Oct. 1, medical documentation for an inpatient admission must include additional elements to satisfy the physician certification requirement. Specifically, the physician certification must include the reason for inpatient services, the estimated time the beneficiary will be required to be in the hospital, and the plans for post-hospital care, if applicable. For critical access hospitals (CAHs), the certification also must include the physician’s certification that the beneficiary reasonably is expected to be discharged or transferred to a hospital within 96 hours of admission to the CAH. 

It is important to note that CMS does not require a specific procedure or form to be used for the certification and recertification statements. CMS noted in the Sept. 5 guidance that, absent specific certification forms or statements, CMS and its contractors will look at a variety of medical record elements to determine if the certification requirement is met. These include but are not limited to the reasons for the inpatient service requirement, factors outlined by diagnoses or orders. The estimated time requirement may be met by the inpatient admission order written to satisfy the two-midnight benchmark, supplemented by physician notes and discharge instructions. Therefore, although hospitals may not have to add new forms or procedures, it is necessary that the medical record as a whole includes the key elements for the physician certification – and, for practical purposes, that the elements are clearly identifiable in the medical record.

Although, as discussed above, the inpatient admission order begins the inpatient certification process, CMS requires in most circumstances that the certification be completed, signed, dated, and documented in the medical record prior to discharge. Only specific individuals are qualified to authenticate the certification or recertification. These include a) a physician who is a doctor of medicine or osteopathy; b) a dentist, in circumstances described in 42 CFR 424.13(d); and c) a doctor of podiatric medicine if his or her certification is consistent with the functions he or she is authorized to perform under state law. The certification or recertification must be signed by the physician responsible for the case, or by another physician who has the knowledge of the case and is authorized to sign by the responsible physician or the hospital’s medical staff. The CMS guidance provided the specific physicians, podiatrists and dentists it considers to have sufficient “knowledge of the case” (the admitting physician on record or a physician on call for him or her). If a hospital intends for the physician’s signature on an inpatient admission order to qualify as the authentication for the physician certification, the physician signing the inpatient admission order must meet the requirements outlined above. 

Although CMS provided the Sept. 5 guidance to clarify the hospital inpatient admission order and certification requirements that were to become effective on Oct. 1, implementation of these changes in hospital protocols may prove to be challenging. It may require physician and staff training on the new required documentation procedures, and monitoring of documentation practices. We recommend that hospitals carefully review the CMS changes to inpatient admission requirements and evaluate their documentation protocols for inpatient admissions.

About the Authors

Andrew B. Wachler is the principal of Wachler & Associates, P.C.  He graduated Cum Laude from the University of Michigan in 1974 and was the recipient of the William J. Branstom Award. He graduated Cum Laude from Wayne State University Law School in 1978. Mr. Wachler has been practicing healthcare and business law for over 25 years and has been defending Medicare and other third party payor audits since 1980.  Mr. Wachler counsels healthcare providers and organizations nationwide in a variety of legal matters.  He writes and speaks nationally to professional organizations and other entities on a variety of healthcare legal topic

Jessica Forster is an associate at Wachler & Associates, P.C.  Ms. Lange dedicates a considerable portion of her practice to defending healthcare providers and suppliers in the defense of RAC, Medicare, Medicaid and third party payer audits.  Her practice also includes the representation of clients in Stark, anti-kickback, and fraud and abuse matters.

Kevin Miserez is an associate at Wachler & Associates, P.C.  Mr. Miserez dedicates a substantial portion of his practice to representing healthcare providers and suppliers in the defense of RAC, Medicare, Medicaid and third party payer audits.

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