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 a related matter, 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,” AAPC 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
If you receive a letter from a Medicare recovery audit contractor (RAC) regarding overpayment, don’t panic! You may think you only have two options: pay up or launch an appeal. There is another option, however, if you move fast (before a formal appeals process starts) and are certain the RAC is mistaken about the overpayments.
According to David M. Vaughn, JD, CPC, of Vaughn & Associates, LLC, “42 CFR 405.374 allows the provider at least 15 days for an informal rebuttal before the formal appeal process starts. The typical RAC letter will state that you have 15 days to informally respond prior to the time the RAC submits its results to the Medicare administrative contractor (MAC), who then issues the formal demand letter. So the first step in the process is to quickly figure out why the RAC is incorrect, and advise it within 15 days; and if you are correct, the RAC will correct the audit mistakes and reissue a revised letter to you and the MAC.”
Section 405.374 “Opportunity for rebuttal,” states:
(a) General rule. If prior notice of the suspension of payment, offset, or recoupment is given under § 405.372 or § 405.373, the Medicare contractor must give the provider or supplier an opportunity, before the suspension, offset, or recoupment takes effect, to submit any statement (to include any pertinent information) as to why it should not be put into effect on the date specified in the notice. Except as provided in paragraph (b) of this section, the provider or supplier has at least 15 days following the date of notification to submit the statement.
(b) Exception. The Medicare contractor may for cause:
(1) Impose a shorter period for rebuttal; or
(2) Extend the time within which the statement must be submitted.
Vaughn, who has defended several RAC audits, said, “All the ones I’ve defended did have the 15 day limit in their letter. I have used it successfully once, where the RAC made a mistake denying over $100,000 in services as ‘services not rendered’ when the real issue was that the incident-to rules weren’t followed, but the services should have been allowed in the name of the NP. They reversed that component of the audit before submitting the demand letter to the MAC. In that case, I actually called them and got an extension of the 15 days, and they granted it. I then submitted our position in writing, and they agreed.”
“RACs are fairly inaccurate—unlike the ZPICs [zone program integrity contractors], which are much more accurate in my experience—so I think the rebuttal process can be a good tool with the RACs, not ZPICs,” according to Vaughn.
Michael D. Miscoe, Esq., CPC, CASCC, CUC, CCPC, CPCO, CHCC, founding partner of Miscoe Health Law, LLC, said that in his experience, mostly with ZPICs, “I would generally use rebuttal ONLY when the client intended to pay, but there was concern about blind acceptance of the audit result leading to allegations of knowledge of the error down the road.” Miscoe’s bottom line is:
- “Providers should weigh (with the advice of counsel) the expense vs. the benefits of attempting a rebuttal rather than a formal appeal. Engaging in this process is more likely to be successful in response to a RAC audit with obvious errors.
- In cases where the provider chooses not to appeal when faced with a minimal refund demand (as in a probe audit), the rebuttal process is a mechanism for putting your objections to the audit findings on record. That way, mere payment cannot be construed later as agreement (and knowledge as in False Claims Act (FCA) context) with the audit result.”
March 26th, 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
By Jacqueline Nash Bloink, MBA, CPC-I, CHC
There are three types of wellness visits, each of which has different requirements. To know if you are being compliant with requirements and coding correctly, know what each entails:
1. Initial Preventive Physical Examination (IPPE) or the “welcome to Medicare preventive visit” – use code G0402 Initial preventive physical examination; face-to-face visit, services limited to new beneficiary during the first 12 months of Medicare enrollment to describe this service. The beneficiary can only receive this visit during the first year that he or she is eligible and enrolled in Medicare. If the patient does not exercise his or her right to request this visit during that first year, he or she will never again have the chance to request it.
During this visit, the beneficiary is eligible for a screening electrocardiogram (EKG) (G0403-G0405) and aortic aneurysm ultrasound (AAU), if he or she meets the following requirements:
- Patients may be eligible for the screening EKG if a referral is given during the welcome to Medicare preventive visit (G0402) or the EKG is performed during this visit.
- AAU is provided as a one-time screening if the beneficiary gets a referral as a result of the welcome to Medicare preventive visit (G0402), has never had an AAU under the Medicare program, and meets certain eligibility requirements. An eligible patient is one who: (1) has a family history of abdominal aortic aneurysm, or (2) is a male, aged 65-75, who has smoked at least 100 cigarettes during his lifetime, or (3) has other risk factors recommended for ultrasound screening as specified by the national coverage determination process.
For more detail on the EKG and AAU screenings, visit the CMS website.
2. Initial Medicare Annual Wellness Visit (AWV) – After 11 full months have passed, the beneficiary is eligible for the next preventive visit, initial “annual wellness visit.” Use code G0438 Annual wellness visit; includes a personalized prevention plan of service (PPS), initial visit to report this. This visit can be performed at any point in the beneficiary’s life, but only once during his or her lifetime. This code was implemented by CMS in 2011.
3. Subsequent AWV – After 11 full months have passed since the initial wellness visit, the beneficiary is eligible for the “subsequent wellness visit” described by code G0439 Annual wellness visit, includes a personalized prevention plan of service (PPS), subsequent visit. A beneficiary can request this visit every year (after 11 full months have passed between visits), if so desired.
You can find a summary of the requirements of all Medicare wellness visits on the CMS website.
December 14th, 2012
Lower Medicare reimbursements and fewer referrals for magnetic resonance imaging (MRI), computerized tomography (CT), and cardiac nuclear scans are contributing to the slower rise in health inflation, research indicates. A new study published in the Journal of the American College of Radiology shows a 21 percent plunge in spending—from $11.91 billion to $9.46 billion—on diagnostic imaging by Medicare Part B from 2006 to 2010.
December 13th, 2012
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