FY 2014 IPPS proposed rule emphasizes physician rationale for admission

By Lisa A. Eramo 

Clinical documentation improvement (CDI) experts have reiterated the importance of documentation improvement for quite some time. Now, CMS is stepping onto its soapbox as well.
In its FY 2014 IPPS proposed rule, the agency not only redefines inpatient status, but it also discusses the ‘why’ and ‘how’ physicians should document the defining characteristic of all admissions: medical necessity.
CMS proposes to define appropriate inpatient stays (i.e., stays that are appropriate for payment under Medicare Part A) as medically necessary stays that span two midnights in the hospital setting. Previously, this benchmark was set at 24 hours.
In its proposed rule, the agency states the following:
Medical review of inpatient admissions will include a presumption that hospital inpatient admissions are reasonable and necessary for beneficiaries who require more than 1 Medicare utilization day (defined by encounters crossing 2 midnights) in the hospital receiving medically necessary services.
This change shouldn’t take coders by surprise. The majority of Medicare Part A improper payments for short-stays have been due to inappropriate patient status. In 2012, inpatient hospital admissions for stays that lasted one day or less had a Part A improper payment rate of 36.1%, according to the Comprehensive Error Rate Testing (CERT) program. Recovery Auditors have also recouped more than $1.6 billion in improper payments because of inappropriate beneficiary patient status.
“We believe the magnitude of these national figures demonstrates that the appropriate determination of a beneficiary’s patient status is a systemic and widespread issue and is not isolated to a few hospitals,” CMS stated its proposed rule.
Compliance challenges
Unfortunately, experts say CMS’ proposed changes won’t necessarily help reduce medical necessity denials in any significant way.
Physiciansmust embrace documentation improvement to enable any lasting change, says Glenn Krauss, BBA, RHIA, CCS, CCS-P, CPUR, C-CDI, CCDS, senior manager at Accretive Health in Chicago.
Cheryl Ericson, MS, RN, CCDS, CDIP, CDI education director at HCPro, Inc. in Danvers, Mass. agrees. “I’m not very optimistic that extending [the admission presumption] from 24 hours to two midnights is the right answer,” she says.
The revision doesn’t take into account the skill of the discharge planner, community resources for discharge planning, family involvement, availability of medical staff, and availability of ancillary services, says Ericson.
“The day of admission is also a factor because even though hospitals are supposed to treat patients seven days per week, many services aren’t available during the weekend, so patients who enter a hospital on a Friday or Saturday often have longer lengths of stay due to a lack of the availability of services they need,” she adds.
In some ways, the revised definition may increase compliance problems. In its proposed rule, CMS states that the starting point for the admission will be the time at which a beneficiary is moved from an outpatient area to a bed in the hospital.
Ericson says this criteria will cause confusion when patients with an inpatient order (and who are actively receiving inpatient care) are held in the ED pending their room assignment, for example.
What contractors may look for
In its proposed rule (see pp. 27644-27650), CMS discusses at length the importance of physician documentation.
Contractors are already using this information when reviewing records, and they will continue to do so regardless of any exact phrasing in a final rule, says Krauss.
At the top of the priority list is physician’s judgment and rational for admission. This includes clear documentation of the following complex medical factors:
  • Patient history and comorbidities
  • Severity of signs and symptoms
  • Current medical needs
  • Risk of an adverse event
It all goes back to physician documentation, saysKrauss. “The rule codifies what doctors should already know and do,” he says. “At least now we have something to hang our hat on in terms of educating physicians. It’s the doctor’s thought process and proper expression of his or her clinical judgment that counts.”
Physicians must clearly document why they feel the patient requires a stay that will extend beyond two midnights, says Krauss. Not only will this assist with medical necessity, but it will also lead to correct coding. “Medical necessity impacts coding because if you don’t have clear and complete documentation of what truly occasioned the admission, coders have a tendency to select the diagnosis that pays the most—and this may not be the reason the patient was truly admitted. That starts a whole domino effect of a short stay,” he says.
The relationship between the physician and patient can enable communication that leads to comprehensive documentation. CMS says physicians are uniquely positioned to capture the patient’s story. More specifically, the agency states the following:
As a result of the relationship that develops between a physician and his or her patient, the physician is in a unique position to incorporate complete medical evidence in beneficiary’s medical records, including his or her opinions and the pertinent medical history of the patient. In creating the medical assessment, medical history, and discharge notes that become part of the medical record, we believe the physician has ample opportunity to explain in detail why the course of treatment was appropriate in the context of that patient’s acute condition. In addition, the physician has the opportunity to describe and explain aspects of the beneficiary’s medical history that may not otherwise be apparent.
This message is important because it reiterates the importance of a patient’s story, says Ericson. “I think CMS is looking to see if the pieces add up to the whole in terms of why the patient is receiving medical care and what’s being provided,” she says. “Ironically, records have gotten longer and longer, but the quality of documentation continues to decline. We need to change this culture in healthcare. Hopefully, healthcare professionals will be forced to provide substantive documentation as patients have more access to their health records.”
What contractors will look for
Contractors have continually placed an emphasis on the importance of a clear, continuous, and consistent patient story. In its proposed rule, CMS states that contractors will give equal weight and evaluation to the physician’s order and certification as well as all documentation included in the medical record to justify the inpatient admission.
Reviewers will also continue to ensure that coders assign correct codes based on documentation in the medical record. Contractors will also continue to employ clinicians to review practitioner-documented procedures to ensure that documentation supports the performance of those procedures.
However, medical review efforts will focus on inpatient admissions with lengths of stay crossing only one midnight, according to the proposed rule. Valid inpatient stays may span fewer than two midnights; however, again, physician documentation must explicitly detail why the patient required admission in the first place. CMS states the following:
We would presume that hospital services spanning less than 2 midnights should have been provided on an outpatient basis, unless there is clear documentation in the medical record supporting the physician’s order and expectation that the beneficiary would require care spanning more than 2 midnights or the beneficiary is receiving a service or procedure designated by CMS as inpatient-only.
CMS also provides two examples in which an unforeseen circumstance would result in a shorter stay that the physician’s expectation of two midnights: beneficiary transfer and beneficiary death.
Ericson says CMS should also include circumstances in which patients leave against medical advice. In each of these circumstances—as well as any other unforeseen circumstance—physicians must certify that the inpatient hospital services were medically necessary.
Factors of convenience (e.g., lack of an appropriate caretaker or lack of transportation) generally shouldn’t affect a physician’s decision to admit a patient or prolong his or her stay. However, when such factors affect a beneficiary’s health, “CMS and/or its contractor would consider these factors in determining whether inpatient hospital admission was appropriate,” according to the proposed rule.
Contractors will particularly target providers suspected of ‘gaming’ the system (i.e., using the time-based presumption to keep beneficiaries longer than two midnights to justify inpatient payments). CMS states the following:
If a hospital is found to be abusing this 2-midnight presumption for nonmedically necessary inpatient hospital admissions and payment (in other words, the hospital is systematically delaying the provision of care to surpass the 2-midnight timeframe), CMS review contractors would disregard the 2-midnight presumption when conducting review of that hospital.
Some hospitals, for example, may be tempted to keep patients for three days so the patients qualify for a covered stay at a skilled nursing facility (SNF), says Ericson. Others may be trying to avoid denials. “It would be more cost effective to keep the patient in the bed for two midnights than to discharge before that time and have to worry about a potential denial,” she adds. “I think all patients will be expected to have a two-midnight stay because it simplifies the process.”
Taking proactive steps now
Coders and CDI specialists shouldn’t wait for CMS to finalize the proposed rule to advocate for documentation improvement, says Krauss. “It’s measurable now. You can cite it. The contractors can cite it,” he says, adding that coders and CDI specialists can—and should—use the proposed rule as an educational tool for physicians.
Hone in on two-day stays to ensure medical necessity, says Ericson. “PEPPER data includes metrics for two-day admissions because these admissions are becoming the norm,” she says.
In addition, it may be helpful for hospitals to begin thinking about how the proposed changes could affect outpatient pricing, says Ericson.
CMS states that approximately 400,000 encounters will shift from outpatient to inpatient, and approximately 360,000 encounters will shift from inpatient to outpatient. This will cause a net shift of 40,000 encounters.
“This is being done simultaneously with healthcare cost transparency. The cost of outpatient services may actually decrease as hospitals begin to compete with each other over the price of their services,” says Ericson. “Hospitals will continue to prefer inpatient payment compared to potentially lower outpatient payments as they must begin competitive pricing.”
Don’t forget to provide comments on the rule. CMS will accept comments until June 25. The agency will publish its final rule no later than August 1. Submit comments electronically, via first-class or express mail, or via hand delivery.
Eramo is a freelance writer and editor in Cranston, RI who specializes in healthcare regulatory topics, health information management, and medical coding. You may reach her at leramo@hotmail.com.
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