Healthcare News: CMS considers alternative definitions for inpatient

Providers may find themselves with a completely new definition of the term inpatient if CMS follows through with its intent to clarify this ever-confusing patient status, as explained in the 2013 OPPS proposed rule published July 30. The agency solicits input from providers on pp. 45155-45157 of the rule and suggests that it may implement fairly significant changes going forward.

In the 2013 OPPS proposed rule, CMS acknowledges the frustration that hospitals have experienced in attempting to correctly report patient status as well as condition code 44, when appropriate. The agency states the following:
Hospitals have indicated that often they do not have the necessary staff (for example, utilization review staff or case managers) on hand after normal business hours to confirm the physician’s decision to admit the beneficiary. Thus, for a short stay, the hospital may be unable to review and change a beneficiary’s patient status from inpatient to outpatient prior to discharge in accordance with the condition code 44 requirements. We’ve heard from various stakeholders that hospitals appear to be responding to the financial risk of admitting Medicare beneficiaries for inpatient stays that may later be denied upon contractor review, by electing to treat beneficiaries as outpatients receiving observation services, often for longer periods of time, rather than admit them.
CMS also acknowledges that patient status (i.e., outpatient vs. inpatient) has significant financial implications for Medicare beneficiaries. This is yet another reason why the agency is taking a closer look at its definition.
CMS is considering several new definitions of and criteria for inpatient status, including the following:
  • Specific criteria for patient status that takes into account the number of hours the beneficiary is in the hospital—and whether it may be appropriate to establish a point in time after which the encounter becomes an inpatient stay if the beneficiary is still receiving medically necessary care to treat or evaluate his or her condition
  • Specific criteria that limits how long a beneficiary can receive outpatient services as an outpatient
  • More specific clinical criteria for admission and payment (e.g., clarification regarding the circumstances under which Medicare will pay for an admission in order to improve hospitals’ ability to make appropriate admission decisions)
  • Parameters in addition to medical necessity and a physician order (e.g., considering length of stay or other variables) for defining inpatient
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