EDITOR’S NOTE: In case you missed the live Monitor Monday broadcast this past Monday, here are some sound bytes from three of the guest panelists. The program’s theme: “Finding Meaning in the Chaos of Compliance.” Joseph C. Nichols, MD, was the special guest, along with Ronald Hirsch, MD, and Taryn Schraad, RHIT, CPMA. No recording was made of this broadcast.

Finding Meaning in the Chaos of Compliance

If we look at all of the current and proposed changes in healthcare, for most stakeholders, things seem overwhelming and, to a large degree, chaotic. It appears that a number of initiatives are disconnected and even at odds with each other. Different interests and silos of work are not really communicating. The result is a giant puzzle that has been dropped on the table. We aren’t quite sure where to start or where we are going. Following the same analogy, if we want to accomplish the goal of creating the puzzle picture with a team of people, there is an approach that involves three major steps.

  1. Get the picture: A clear vision of where we are going and what the final picture will look like is needed to guide efforts.
  2. Look for patterns: Patterns and themes within the overall parts based on the picture will help with incremental construction.
  3. Communicate, collaborate, and share: Each part of the “puzzle” team may focus on a specific area, but there needs to be constant communication about the direction towards the vision, collaboration to work on intersecting areas effectively, and sharing puzzle parts so that we facilitate rather than impede. 

Periodically we need to step back and see where the picture is going to make sure we aren’t heading in the wrong direction.

Healthcare reform, in the broadest sense of the word, is the picture. Specifically, it is a vision about providing the best value in healthcare focused on those who need it the most, with compassion and sensitivity to not only help the patient get better, but to reduce the burden of illness. This vision is more than a set of platitudes or marketing statements. This vision requires data to measure and confirm what we mean by “value” and “compassion.” It requires accurate, consistent, and meaningful data about the patient’s health state and the services that are provided to improve or maintain that health state.   

ICD-10, meaningful use, audits, accountable care, value-based purchasing, pay for performance, hospital-acquired conditions, potential preventable conditions, RAC audits, and a host of other initiatives are not goals but rather parts of the picture. 

Of course, all of this has to occur within the real constraints of limited finances.   

The bottom line is that we need to understand the vision and recognize that this overwhelming change is part of a bigger picture. To efficiently reach the goal, we need to understand how the patterns come together and collaborate on the solution to the goal.

Joseph C. Nichols, MD
Health Data Consulting

Part B: A Physician’s Perspective

Well, it has been an exciting two weeks. My eldest daughter got married the day after the new rule was posted. Don’t tell my wife, but I was checking emails all week waiting for the announcement. And there it was, just as we were preparing for the rehearsal. It took all my willpower to not pull out my phone during the wedding ceremony to read the constant flow of comments that were posting on the user groups. And perhaps it was fortunate that I was preoccupied, because it really allowed me time to read the rule and develop my own interpretation.

What I realized is that the new rule really creates more uncertainty.

First, there is no reference to the role of first-level screening criteria in the admission decision. CMS seems to be saying the question now is no longer “Does the patient need observation or inpatient care?” but rather, “Does the patient need to be in the hospital or not?” This is actually a question that hospitals and physician advisors have been dealing with for a long time; trying to understand why the ED doctor did not just send the patient home or for an outpatient evaluation. Unfortunately, there is no ICD-9 or -10 code for that, nor do the RACs recognize the “What if I Get Sued (WIGS) syndrome,” as coined by Dr. (Steven) Meyerson.

And if we do use first-level review criteria, we are still left with the patient who fails the criteria but appears sick enough to need to come in. I don’t think any of us feel comfortable enough to leave that decision to the ED doctors; if we did, the front door of the ED would be labeled “No Exit,” because no one would go home. So secondary review will still play a critical role, both in helping make that decision and in guiding the new onerous documentation requirements imposed upon physicians.

But what if we establish that the patient actually does need to be in the hospital? Well, we then have to justify that there is an expectation that the stay will span two midnights. And once again we are at a point where it is the hospital versus the RAC. How do we establish expectation? Well, we will defer that discussion for another time.

Then you get into part B rebilling. While it sounded simple at the beginning, we now learn that it is not a simple process. CMS has finalized the part B rebilling rule so their argument is that if the hospital gets the status wrong they can rebill for part B. But we all know that RACs are not known for their efficiency, and the one-year timely filing limit will result in the RACs delaying reviews until that time period has passed, since they have a three year look-back period. Numerous commenters pointed this out to CMS, and their response was one of the more baffling ones: “We disagree with the commenters that there is no time limit by which a RAC must complete its review of claims requested for review. Medicare requires RACs to complete their complex reviews of claims within 60 days from receipt of the medical record documentation.”

We did find out that rebilling must follow the conditions of participation as outlined in the code of federal regulations section 482.30 and must involve review by physician members of the utilization review committee and discussion with the attending physician, and then notification of the patient and the physicians who cared for the patient. But because the hospital can now self-audit and bill for part B, reviewing cases that have the potential to be audited and denied will need to become a routine part of the workflow of the case management staff and physician advisor.


The staff will need to develop a process to review cases. If done prior to discharge, condition code 44 allows the hospital to get the observation order and possibly bill for observation hours. If done after discharge, there is no opportunity to bill observation, but the hospital can be reimbursed for services provided. But it requires three claims: the no-pay inpatient claim, the part B inpatient claim, and the services provided prior to the inpatient order on an outpatient part B claim.

That means more work and delay in receiving payment, neither of which your CFO will want to hear.

So part B was a welcome addition to CMS rules, but it has certainly added to the workflow of case managers and physician advisors.

Ronald Hirsch, MD, FACP
Vice President, Regulations and Education Group
Accretive PAS®
Physician Advisory Services

Part B: A Provider’s Perspective

After reading the two-midnight rule and Part B rebilling articles, I contacted the Care Coordination Director. The articles were forwarded to the Lawrence Memorial Hospital (LMH) hospitalists. The articles generated some discussion in their meetings regarding current denial trends, complying with the Medicare regs, and what was in the patient’s best interest.

LMH has two shifts for case managers working in the ED, and we have a half-time position on the weekends (four hours on Saturday and four hours on Sunday). During the times the ED is without a case manager, the doctors do their best to make the decision based on clinical factors, without the assistance of Interqual Criteria.

The case manager discusses the patient status with the physician and a determination is made for what is best for the patient. LMH has been using this process all along in an attempt to be compliant with the CMS billing regulations. (It is unfortunate that so many costly resources have to be expended just interpreting Medicare regulations in an attempt to get the patient status correct).

LMH does not anticipate many changes with regard to status determinations, due to the process we have in place referenced above. Data will be reviewed and necessary changes will be made if needed.

The new two-midnight rule is bound to increase observation admissions in order to comply with Medicare admission requirements. As for Part B billing, that is a confusing mess. LMH hopes to not have to “find our way through that maze,” but will when necessary.

Taryn Schraad, RHIT, CPMA
Audit and Appeals Specialist
Lawrence Memorial Hospital
Lawrence, Kansas

Stay Tuned: Next on Monitor Monday

Could CAHs Go the Way of Polar Ice Caps?

Could Critical Access Hospitals (CAHs) go the way of the polar ice caps, wreaking havoc as they retreat? The Office of Inspector General reports that as many as two-thirds of the nation’s CAHs would not meet the location requirements if required to re-enroll in the Medicare program. What fate awaits CAHs and the communities they serve should the administration move forward and disqualify existing CAHs? Brock Slabach, senior vice president of the National Rural Health Association, joins the broadcast on Monday, Aug. 26 to shed light on what could be an endangered species.

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