Admit Disposition:Inpatient or Outpatient Observation

Ann-Marie Peterson, RNNursing Management

Introduction

Situation:Medical and Nursing staff at Rio Grande Hospital need increased recognition of a patient’s admit disposition

Inpatient admission vs. outpatient observation

Background:Commercial insurance payers, Medicaid, and Medicare are demanding that hospitals bill correctly for services rendered

Introduction

AssessmentPrivate health insurance carriers deny payment for services rendered if the patient is admitted to wrong status

Insurance carrier is billed for inpatient services when the patient’s criteria met an for an outpatient admissionInsurance carrier is billed for outpatient services when the patient is admitted > 23 hours

Medicare Recovery Audit Contractors are working to recover funds that are billed inappropriately

(American Hospital Association, 2012)

Introduction

RecommendationInitiate procedures to ensure correct admit disposition of admitted patients to Rio Grande Hospital

GoalCorrectly bill for services rendered while admitted to Rio Grande Hospital with the initial billing

Reduce incorrect billings that are corrected and rebilled to private insurance carriersDecrease vulnerabilities in RACs charts audits. Minimize refunds back to Medicare

Why Change?

Reimbursement for services provided at Rio Grande Hospital are affected when the patient’s admit disposition is incorrect

Why Change?

Cost Effectiveness for the billing staffGet it right the first time

Saves man hours for reprocessing with the correct dispositionSaves the private insurance companies money and time in their claims processing department and medical review staffWe receive our funds in a more timely manner

Why Change?

Medicare Recovery Audit Contractors

Tax Relief and Healthcare ACT of 2006, Section 302: required a permanent and nationwide RAC program to be in place by 2010Medicare Modernization Act, Section 306

Required RAC demonstrationBoth of the above statues give authority for RACs to be paid on a contingency basis (CMS, 2008)

Why Change?RACs began reviewing Medicare payments to providers in October, 2010. According to CMS, RACs “corrected” $1.45 Billion of improper payments by December, 2011

(American Hospital Association, 2012)

Observation Admission DefinedObservation may be appropriate for a patient with ALL of the following. Observation care is appropriate as indicated by care requirements that are ALL of the following per Milliman’s Care Guidelines©

Beyond the scope of a usual outpatient care episode

Expected to be short term

Appropriate for observation care as indicated by 1 or more of the following:

Diagnostic evaluation needed (eg, rule out MI)Acute treatment and response evaluation needed (eg, drug reaction)Monitoring for event (eg, arrhythmia) or recovery (eg, from drug ingestion)

Observation Status DefinedFurnished by a hospital on premises use of a bedPeriodic monitoring by nursing and/or other staffAny other services reasonable and necessary to evaluate a patient’s condition or to determine the need for a possible inpatient admissionAdmission is usually based on a symptom

Chest painAbdominal painTIA symptoms (Milliman Care Guidelines)

Observation Status Defined

Rule out = Remember Observation

Length of Observation StayMedicare patient < 48 hoursPrivate insurance < 24 hours

Quality of Care

Quality of care and treatment remains unchanged regardless if the patient is admitted to inpatient status or placed into outpatient observation

Severity of Illness These are the criteria forIntensity of Service inpt vs. outpt observation

What do the RACs Auditors Audit

RACS look at “Severity of Illness” and “Intensity of Service” to determine if a patient meets criteria for an inpatient admission.

(AEGIS Compliance & Ethics Center, 2009

Severity of IllnessHow sick is the patient

SymptomsLab valuesVital signs

What do the RACs Auditors Audit

Intensity of ServiceMonitoring the patient

Serial CPK and troponinsMonitoring oxygen saturations for several hours

What are our interventions?Prophylactic DVT prevention vs. treatment with therapeutic goalIV antibiotics for an infectionIV Lasix ≥ twice dailySystemic steroid administration

IV or po administration

Milliman Care Guidelines

www.careguidelines.com

Milliman Care Guidelines

Works Cited Americian Hospital Association. (2012). AHA Audit Education Series: Reducing Vulnerabilities to Payment

Denials. Center for Medicare and Medicaid, Division of Recovery Audit Operations. (2008). Medicare Audit

Contractors (RACs) An Intorduction to the RAC Process. Center for Medicare and Medicaid. Department of Health and Human Services. (2010). Recovery Audit Contractors' Fraud Referrals. Office

of the Inspector General. Retrieved September 24, 2012, from https://oig.hhs.gov/oei/reports/oei-03-09-00130.pdf

Health Services Advisory Group. (n.d.). Guidelines - Medicare Decisions: Observation or Inpatient? Arizona. Retrieved September 25, 2012, from http://acute.hsag.com/HOW/041207/09_Medicare-INPvOBV-DecisionsGUIDELINES_April2007.pdf

Milliman Care Guidelines. (2012). General Criteria: Observation Care (16 ed.).