CMS New Standards for Hospital Inpatient Admissions

October 2013

“Providing technologically supported physician advisory and case management services to healthcare providers and payors”

1 Update: 10-01-13

Agenda • Summary update, CMS inpatient rule

change, 24 hour to “two midnights”

• Who is affected by the CMS rule change

• Orders, Certification and Documentation Requirements Checklist

• Inpatient Criteria and Guidance

• Part B Rebilling rule change

• Illustrative Real World Scenarios

2 Update: 10-01-13

Summary Update CMS Rule Change

• The FY 2014 IPPS Final Rule CMS Final Rules (CMS-1455-F; CMS-1599-F) transitions the rule for an inpatient stay from 24 hours to a “Two-Midnight” provision taking effect October 1, 2013.

• The provision DOES NOT change longstanding CMS requirements for documenting medical necessity

3 Update: 10-01-13

Summary Update CMS Rule Change

• Under the new CMS rule, when considering whether to admit a patient, physicians must assess whether the patient’s stay will, in their judgment at the time they make the admission order decision, likely exceed two midnights.

• If so, inpatient care may be appropriate for Part A billing. However, physicians must document the medical necessity of that anticipated hospital stay and may use objective criteria to support their documentation.

4 Update: 10-01-13

Summary Update CMS Rule Change

• The admission order must be furnished by a qualified and licensed practitioner who has admitting privileges at the hospital as permitted by State law, and who is knowledgeable about the patient’s hospital course, medical plan of care and current condition.

• The admission decision (order) cannot be delegated to an individual who does not have this authority.

5 Update: 10-01-13

Summary Update CMS Rule Change

• For each inpatient admission, the certification must be completed, signed and documented in the medical record prior to discharge (except for outlier extended stay cases, which require earlier certification and recertification).

6 Update: 10-01-13

Who is affected by the new rules?

• The new CMS provisions apply to all types of hospitals and Critical Access Hospitals (CAHs) that bill for US Medicare covered patients, except inpatient rehabilitation facilities.

7 Update: 10-01-13

Orders, Certs and Documentation Checklist

1. Order must clearly show date and time of when patient is admitted 2. Order must be signed by a certified physician with admitting privileges

prior to discharge 3. Order must specify words such as “admit for inpatient services”…

(“admit to 2N,” “admit to Tower 7,” etc. may be construed as ambiguous) 4. Services must meet Inpatient Criteria including new “two-midnight” rule 5. Clinical Documentation requirements:

• Rationale described for two-midnight stay with clinical support • Plan of care • Medical evidence • Estimated length of stay • Documentation regarding patient’s adverse risk if not treated • Plans for post-hospital care

8 Update: 10-01-13

Inpatient Criteria and Guidance • Review patient procedure for Inpatient Only List - not changed

with new two-midnight rule.

• Presumption of a two-midnight stay.

• Clear documentation of the expectation of a two-midnight stay. If the patient stays less than 2 days, Part A payment may still be made if the documentation is supportive.

• Time spent in Emergency Department (ED) and/or Observation will count towards the two-midnight stay.

9 Update: 10-01-13

Inpatient Criteria and Guidance • Time counted towards the 3 day qualifying stay for Extended Care

Facility (ECF) or Skilled Nursing Facility (SNF) starts with the inpatient order.

• Two-midnight benchmark is not contingent on the level of care required even if industry guidelines (InterQual, Millman) are met.

• If the patient does not undergo a procedure on the Inpatient-Only List or the patient stay is expected to span less than two-midnights, then it is CMS’ position that an inpatient admission is NOT medically necessary.

• Cases expected to meet the two-midnight stay will still need to meet medical necessity.

10 Update: 10-01-13

Part B Rebilling Change • Effective October 1, 2013 hospitals may receive Part B

payment if an inpatient billing is determined to be incorrect after discharge.

• Provided that the beneficiary is enrolled in Medicare Part B • Hospitals will need to file an inpatient Part B bill and an

outpatient Part B bill for services with the order status defined for observation services or outpatient hospital services or other appropriate status (not inpatient).

• If a self audit determines inpatient admission was unnecessary, Part B services can still be billed after the patient has left the hospital.

11 Update: 10-01-13

Illustrative Scenario 1 • Case: A patient enters the hospital at 9 AM, and the physician

evaluates and determines that the patient will need care overnight, with an expected discharge the following morning. The physician admits the patient to hospital.

• Before October 1st: Patient care spans 24 hours, so the hospital may seek Medicare Part A payment.

• After October 1st: Patient care does not span two midnights. CMS makes it clear that this is generally inappropriate for Part A inpatient billing. Part B billing may be appropriately billed if applicable.

12 Update: 10-01-13

Illustrative Scenario 2 • Case: A patient enters the hospital at 9 AM, and the physician evaluates

and places the patient in observation care and diagnostics are performed all day and the next day. At 12 PM the following day, the physician determines that the patient will need further tests and an additional night in the hospital for treatment. The physician does not anticipate discharge for at least another 24 hours and admits the patient.

• Before October 1st : Patient care spans 51 hours, so the hospital makes Inpatient admission and files Part A payment.

• After October 1st: The patient was in observation care for 27 hours and is expected to need at least another 24 hours of care. The time spent in observation care may count toward the two-midnight benchmark, so it is correct to admit the patient and bill as Part A billing, absent unnecessary delays in the provision of care.

13 Update: 10-01-13

Illustrative Scenario 3 • Case: The patient enters the hospital at 9 AM. The physician evaluates and writes a note

to “admit the patient” to Tower 7. Patient care is provided for 50 hours and spans two midnights, after which the patient is discharged. The medical record includes neither the physician’s progress notes nor the physician’s documentation of the clinical reasons why it was reasonable to expect the patient would need care for more than 48 hours.

• Before October 1st: Medicare Part A payment may be in jeopardy due to the lack of documentation.

• After October 1st: Medicare Part A payment may be in jeopardy due to the lack of documentation, including a lack of specificity in the Admission Order and the absence of objective medical information that supports the physician’s expectation regarding length of stay. However, CMS guidance (September 5, 2013) notes that, when the physician omits explicit identification of the admission as “inpatient,” the Admission Order may still be compliant with 42 CFR 412.3 provided that the intent to admit as an inpatient is clear.

14 Update: 10-01-13

Questions?

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CMC Physicians

2950 W. Square Lake Rd, Ste. 200

Troy, MI 48098

(248) 641-3300

www.cmcphysicians.com