An Open Door to Redefining Inpatient Status?

In July 2012, the Centers for Medicare & Medicaid Services (CMS) sought from providers comments and suggestions for improving the current guidelines for determining admission status when the agency issued the 2013 Outpatient Prospective Payment System (OPPS) Proposed Rule in the Federal Register. According to CMS, more than 650 comments were received in response. In the OPPS Final Rule, which was published in the Federal Register on Nov. 15, 2012, CMS acknowledged the responses, but made no changes to the rule based on any of the comments. Instead, CMS indicated that it would take all of the comments into consideration as it considers future action.

CMS did make some general observations regarding the comments it received, including feedback related to the two issues that are the focus of this article:

  1. Regarding the clarification of instructions for current admissions and the establishment of specific clinical criteria for inpatient status, CMS noted that those submitting comments were concerned about the value to be assigned to the treating physician’s clinical judgment. There also was a mix of opinions on the value of using commercially available screening tools.
  2. In addressing the use of utilization review for making status decisions on inpatient or outpatient status, commenters ran the spectrum from not wanting to use utilization review at all to advocating for its mandated use 24 hours a day, seven days a week, 365 days a year.

By and large, those submitting comments agreed with CMS that the primary goal needs to be to determine correct admission status. To that end, many providers that currently are applying the factors set forth in Chapter 1, Section 10 of the Medicare Benefit Policy Manual properly and adhering to the guidelines used in determining whether services are covered as inpatient hospital services under Medicare Part A still routinely are having claims denied by CMS contractors based on varying interpretations of CMS guidance. 

For example, providers continue to see denials in cases in which there were no identified complications after admission. However, the Medicare Benefit Policy Manual specifically states that a reviewer should not be taking into consideration what happened after the decision to admit was made (unless it supports the admission). Rather, they only should be reviewing what the treating physician knew at the time he or she made the admission decision. Denials such as this routinely are overturned on appeal, but only after costing providers a lot of time and money to receive the reimbursement they deserve for the care they provided. This can obviously be extremely frustrating.

Another issue addressed in the comment period involved the use of the utilization review process to assist in making correct status determinations. As most providers know, CMS already requires all hospitals to have a utilization review committee in place to assist with admission decisions, a mandate set down by the Medicare Conditions of Participation (CoP) found in Part 482 of Chapter 42 of the Code of Federal Regulations. Moving forward, ideally, CMS should certify provider utilization review processes. Then CMS could presume that a correct admission status determination was made if the provider documents that it made use of a Medicare-certified utilization review process along the way.

In fact, a certified process for establishing the appropriateness of an admission status determination likely would result in fewer billing errors and reduce the frequency of redundant review activity. Also, claims could be approved automatically via verification that a hospital’s UR process was certified by CMS, and followed.

A certified process would be wholly consistent with Medicare regulations and guidance, and supported by peer-reviewed, evidence-based medicine. This process would include compliance with the UR process as outlined in the CoP and, if needed, could involve second-level screenings by a hospital’s utilization management staff, access to physician advisors, and/or direct involvement of a patient’s treating physician. This would allow hospitals and providers to use their limited resources more efficiently and effectively, further allowing them to make proper admission status determinations and to eliminate the fear of later being flooded by inappropriate denials.

Finally, if a Medicare certified process were to be put in place, the burden then would be on CMS to show why an admission was not appropriate – rather than keeping that burden on the provider, which likely already has taken the time to review the admission, if adhering to CMS regulations and guidance.

In addition, CMS could audit the process itself, rather than targeting individual claims, further reducing the administrative burden on both providers and contractors and helping shift resources towards patient care.

Even though CMS asked providers to weigh in on these issues, ultimately it is still up to CMS to make the final call. So for now, providers must wait and see if CMS acts on the overwhelming volume of comments received.

About the Author

Steven Greenspan serves as Vice President of Regulatory Affairs at Executive Health Resources (EHR) and is responsible for overseeing EHR’s regulatory research and hospital advocacy efforts, and collaborates closely with the EHR’s appeals management teams to offer support on complex Medicare, Medicaid, and Commercial Appeals matters.

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