In a proposed rule, published in the Federal Register May 10, the Centers for Medicare & Medicaid Services (CMS) clarifies the rules governing physician orders of hospital inpatient admissions for payment under Medicare Part A. If finalized, hospital inpatient admissions spanning two midnights in the hospital would generally qualify as appropriate for payment under Medicare Part A. Anything less would be considered observation and paid under Part B, unless the physician could prove otherwise.
The purpose of this provision in the hospital Inpatient Prospective Payment System (IPPS) proposed rule for fiscal year 2014 is to resolve ongoing confusion as to when a patient should be admitted to inpatient status.
CMS states in the proposed rule, “The majority of improper payments under Medicare Part A for short-stay inpatient hospital claims have been due to inappropriate patient status (that is, the services furnished were reasonable and necessary, but should have been furnished on a hospital outpatient, rather than hospital inpatient, basis).”
Will the clarification be enough to resolve the longstanding dilemma for providers as to when it is appropriate to order an inpatient stay? Some are inclined to agree. Stacy Harper, JD, MHSA, CPC, of Lathrop & Gage LLP, is one of them.
“The current subjective guidelines for inpatient admission have resulted in numerous appeals and disputes regarding necessity of inpatient status. If the proposed two-midnight objective presumption is finalized, hospitals will have a new guide available to assist in these decisions,” Harper said.
But the American Hospital Association (AHA) has a difference of opinion. In a public statement released April 26, the AHA said it is more inclined to believe that the proposal will allow Medicare contractors to continue second-guessing physicians’ judgment.
“While we appreciate CMS’ efforts to provide clarity around when an inpatient admission is appropriate – such as for a patient on observation status – we are concerned that this could be applied in a way that undermines medical judgment,” Rick Pollack, AHA executive vice president, said in the statement.
According to CMS, however, review contractors won’t deny short-stay inpatient claims as long as they are documented correctly. “It is the documentation of the reasonable basis for the expectation of a stay crossing 2 midnights that would justify the medical necessity of the inpatient admission, regardless of the actual duration of the hospital stay and whether is ultimately crosses 2 midnights.”
To support an inpatient claim, in addition to the physician’s order and certification, the provider must document complex medical factors such as:
- Beneficiary medical history and comorbidity
- Severity of signs and symptoms
- Current medical needs
- Risk of an adverse event
In an interesting twist, CMS recently announced that it would allow hospitals to resubmit claims for payment under Part B after being initially denied by Part A (Read “CMS Addresses Part B Inpatient Billing Controversy,” Cutting Edge, June 2013, for details).
Unfortunately, this creates another cause for concern, according to the American Medical Association (AMA). “For patients, reclassification as ‘observation’ rather than admitted can result in unanticipated costs and co-payments,” the AMA stated in an Aug. 31 letter to CMS. For example, Medicare covers skilled nursing facility (SNF) care when a patient spends at least three days as an inpatient, but not as an outpatient under observation status. If a patient were to spend three days as an inpatient and then be transferred to an SNF, that individual would be charged the full shot for the SNF stay in the event the inpatient claim is denied and subsequently paid under Part B.
More Changes on the Horizon
Also in the IPPS proposed rule, CMS would:
- Implement statutory provisions contained in the Affordable Care Act of 2010;
- Update rate-of-increase limits for hospitals excluded from the IPPS and paid on a reasonable cost basis;
- Update IPPS payment policies and annual payment rates;
- Make changes relating to direct and indirect graduate medical education payments; and
- Update policies relating to the hospital value-based purchasing program and the hospital readmissions reduction program, as well as revise the conditions of participation.
The IPPS proposed rule is open for comment until June 25. For complete details, download the proposed rule from the Federal Register website (www.federalregister.gov). The final rule is expected Aug. 1, with most of the provisions going into effect Oct. 1.
May 21st, 2013
Documentation is more important than ever. Barbara Aubry, RN, CPC, CHCQM, FAIHCQ, recently authored an article for Advance for Health Information Professionals, in which she tracks healthcare industry movements from a regulatory perspective. In the article Ms. Aubry specifically analyzes actions recently taken by the Office of Inspector General (OIG) and the OIG’s studies of evaluation and management (E/M) code use.
“[The OIG has] identified 1,700 individual physicians who consistently bill higher-level E/M codes,” she notes. “If you have any concern about your practice’s E/M coding or your hospital’s E/M coding, it’s time to take action.”
Read the full article.
May 2nd, 2013
Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services (CMS), announced there will be no delay to implementation for ICD-10-CM and PCS, which is scheduled October 1, 2014. She then encouraged everyone in the industry to work diligently toward a successful transition.
Tavenner made the statement at the annual Health Information Management Systems Society (HIMSS) conference, a year after she announced a 90-day comment period to determine if and how long a delay would be. The comments at that time ranged from killing ICD-10 completely to making no change from the originally planned date of 2013. Ultimately, the implementation was postponed by a year. Many providers and payers are using the extra year to better prepare.
Several organizations hoped Tavenner might announce another postponement at the HIMSS gathering, and some still advocated shelving the code set, but it looks like implementation is a done deal.
March 21st, 2013
A physical therapy (PT) operation in Tennessee has agreed to pay the federal government for medically unnecessary services.
Therapists have struggled with payment policies over the last three decades as legislative efforts have employed methods that “supposedly” aim to bring the cost of services down by paying for the quality, rather than quantity, of care. Lynn S. Berry, PT, CPC, said “Therapists must juggle clinical concerns with documentation burdens to meet the challenge” of reimbursement.
While most therapists are meeting these challenges, a few have bent under the pressure of lowered payments. For example, Grace Healthcare, LLC and its affiliate Grace Ancillary Services, LLC (Grace) in Chattanooga, Tenn. On March 8, the Department of Justice (DOJ) and Office of Inspector General (OIG) announced that Grace’s therapy providers agreed to pay $2.7 million, plus interest, to resolve allegations of false billing for medically unnecessary therapy services.
According to the DOJ press release:
“The settlement resolves claims that in ten nursing home facilities in which Grace provided physical, occupational, and speech therapy for periods ranging from 2007 through June of 2011, Grace pressured therapists to increase the amount of therapy provided to patients in order to meet targets for Medicare revenue that were set without regard to patients’ individual therapy needs and could only be achieved by billing for a large amount of therapy per patient.”
Don’t let this happen to you. While waiting for more positive changes in the reimbursement system, there are things therapists can do to improve the current situation.
Properly Document when Using New G Codes and Severity Modifiers
To ensure you are compliant when rendering PT services, Berry’s recommendation is to “provide an audit trail by documenting in the medical record the G codes and severity modifiers, their rationale for use, and the pertinent tests provided. After the primary impairment goal is reached, a secondary impairment may be noted and treatment continued until the goal for that impairment is met or final discharge occurs. The G codes and modifiers apply to all claims in which Medicare is the primary or secondary payer.” The G codes and severity modifiers for PT, occupational therapy, and speech-language pathology are noted in the 2013 Medicare Physician Fee Schedule (MPFS) Final Rule.
Will Payment Challenges Get Better for PTs?
There is positive action taking place on the horizon. According to Berry:
“For PT, the American Physical Therapy Association (APTA) is already working on a new payment system. Their draft of an Alternative Payment System (APS), or the Physical Therapy Classification and Payment System (PTCPS), was released to members for comment March 15, 2012. The CPT® Editorial Panel in Memphis, Tenn., Oct. 2-3, 2012, fully supported their efforts. A workgroup will be started that is open to all advisors to rewrite the Physical Medicine and Rehabilitation Section of CPT®. This is a two-part, per session payment system: One set of codes for evaluations, and another set of per-session codes for treatments. Each combines consideration of the complexity of the visit and the severity or complexity of the patient’s condition. APTA expects this system to begin Jan. 1, 2015.”
When that system goes into effect, “therapists can then move forward to provide efficient, effective care for their patients and meet the challenge of high quality care at reasonable cost,” said Berry.
For more information on capturing proper reimbursement for therapy services, read the articles “Therapy Services: The Uphill Climb to Better Codes and Reimbursement” and “PTs Rise to 2013 G code Challenge” in March 2013 Cutting Edge.
March 14th, 2013
Performing an audit can be quite a cumbersome endeavor and is a heavy responsibility. Jaci Johnson, CPC, CPC-H, CPMA, CPC-I, CEMC, a member of the AAPC National Advisory Board, recently penned an article about the audit process for Advance for Health Information Professionals. In the article Ms. Johnson explains the different steps and considerations involved from the time someone in the practice decides to request an audit until the results are tabulated and presented. Her suggestions include accounting for the following questions.
- Why is the audit being performed?
- What is the audit time frame?
- How many claims should be reviewed?
- Which coding and documentation guidelines and rules must the auditor know?
- Which reference tools should be used?
- What are the signature requirements?
- Have the dates of service been verified?
- Who will receive the audit results?
Read the full article.
March 7th, 2013