Recoupment and one-day inpatient admission for total knee replacement.

EDITOR’S NOTE: The following is a summary of a broadcast segment on Monitor Monday, May 7 by the author.

While we are still trying to make sense of what the Centers for Medicare & Medicaid Services (CMS) meant with its proposal to change the inpatient admission order requirements in the 2019 Inpatient Prospective Payment System (IPPS) Proposed Rule, I thought I’d share some other news.

First, some of you may have noted that the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) has added an interesting issue to its work plan: they are going to audit CMS’s collection of overpayments. And as a basis for this, the OIG cites its 2012 report wherein it found that CMS had only collected $84 million of the $415 million the OIG itself found as overpayments and told CMS to recoup. When one Monitor Monday listener saw this update, they were not surprised. As the Recovery Audit Contractor (RAC) coordinator at their hospital, this person tells me that they have several RAC denials they did not dispute in 2013 and 2014 wherein they received an overpayment letter from a RAC, but no demand letter from the Medicare Administrative Contractor (MAC), and the money has still not been recouped, as had been the case with all their other RAC denials.

While this hospital is happy to not have the money recouped, finance people never like to have an open entry after four years, and compliance people don’t like to hold onto things that don’t belong to them. The hospital has no idea if there is a statute of limitations, since they were notified that an overpayment exists, but CMS dropped the ball on the next step in the collection process. And so they just keep waiting. 

The American College of Physician Advisors’ National Physician Advisor Conference was held last week in lovely Greenville, S.C. During the Conference I was honored to be able to provide a Program for Evaluating Payment Patterns Electronic Report (PEPPER review) and a Medicare update, along with participating in a panel showdown on inpatient versus observation status. Here are a few updates from the Conference: 

First, the tactics used by commercial payors to avoid paying claims was a recurrent topic. If you think your facility is being singled out, you’re wrong. No one is immune. We also heard repeatedly that payers are blatantly misusing the commercial screening tools. These tools do not allow observation to go on for days on end. And it seemed to me that the physicians who helped create these tools are not happy that they are begin misused, but are powerless to stop it. Unfortunately, no one had an easy solution besides pushing back. And if you are right, don’t stop pushing. 

We also heard from Dr. F. Richards, the chief medical officer from KEPRO. KEPRO, along with Livanta, has been auditing short inpatient admissions since CMS transitioned the task from the MACs. He told us that they are now on the fourth round of their targeted probe-and-educate process associated with these admissions. And while they continue to audit the top 175 hospitals in each region, they have yet to refer a single hospital to the RACs for poor performance. He also noted that on their monthly calls with CMS, there is never a mention of referring any hospital to the RAC. But that doesn’t mean hospitals should let their guard down. There are many auditors even scarier than the RACs, such as the OIG, which we all know loves to use extrapolation. 

Dr. Richards stated that their current overall claim denial rate is about 10 percent, compared to 27 percent when they started the process. He also stated that there was a steep learning curve for his own reviewers, and while they made many mistakes during the early rounds, they are getting better. All of us who have had to explain to a Quality Improvement Organization (QIO) reviewer that a midnight spent at another hospital counts to the two-midnight benchmark were relieved to hear him say this. It’s rare to hear a CMS contractor admit a mistake; hats off to Dr. Richards and KEPRO. 

His most important revelation was when he discussed the review process. He referenced the CMS flowsheet, which was provided to the QIOs for use in reviewing short inpatient admissions. The sixth step on that flowsheet encompasses the case-by-case exception to the two-midnight expectation that CMS added on Jan. 1, 2016.

During the presentation, Dr. Richards stated that KEPRO reviewers would support the use of the case-by-case exception for one-midnight stays after total knee replacement if the documentation supported that the patient was at higher risk and the clinical circumstances were documented. But remember, the factors outlined must truly increase surgical risk. The key, of course, is to get those factors documented and be specific to indicate why the patient is at higher risk, not just that they are at higher risk. It was a relief for me to hear that; since my first RACmonitor webcast on the topic, I have been presenting the one-day inpatient admission for total knee replacement as a compliant option if the regulatory requirements were met.

Finally, I can get a good night’s sleep.


Program Note

Listen to Dr. Hirsch every Monday on Monitor Mondays, 10-10:30 a.m. EDT.


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