RAC Risk Areas:Hospital Patient Status

Robert D. Stone, Esq.Alston & Bird LLP

Georgia Hospital Association

July 15, 2010

“In all we do, we must remember that the best health care decisions are made not by

government and insurance companies, but by patients and their doctors.”

George W. Bush, State of the Union Address

Increased Payor Scrutiny

“Hospitals, insurers battle over downcoding of patient stays” (The Intelligencer, July 6, 2010)– “Unashamedly, one of our efforts is to promote more

efficient care. No one is saying don’t be careful, don’t take the appropriate precautions. It’s about how do you appropriate pay for that resource, that amount of care that is being rendered.” Don Liss – Independence Blue Cross, Senior Medical Director.

Agenda

Physician’s role in determining patient status

Recent enforcement actions

Clinical risk areas related to patient status

Medicare rules and the use of Condition Code 44

The Case Management Assignment Protocol (CMAP) – History & current options

The Problem

Correctly assigning patient status to avoid:– Short Stay denials– False Claims allegations– Inappropriate use of “observation” services– Compromising SNF coverage – Condition Code 44 “Trap”

Medical Necessity: The Treating Physician’s Primary Role

The patient’s treating physician is responsible for determining whether a Medicare beneficiary needs to be admitted to a hospital.

“The physician or other practitioner responsible for a patient’s care at the hospital is also responsible for deciding whether the patient should be admitted as an inpatient.” MBPM Ch. 1 § 10.

Only A Doctor Can Legally Admit Patients to Hospitals

Generally, under state law, only physicians can order the inpatient admission of a patient. Nurses (including care managers) are not legally qualified to make that decision, which is outside their “scope of practice.” See, e.g., Georgia Medicaid Hosp. Manual § 901.1 (req. admissions by “licensed doctors”); 42 CFR 482.12(c)(2) (“Patients are admitted to the hospital only on a recommendation of a licensed practitioner permitted by the State to admit patients to a hospital.”)

“In no case may a non-physician make a final determination that a patient’s stay is not medically necessary or appropriate.” See Page 217 of the Medicare State Operations Manual, accessible at http://www.cms.hhs.gov/manuals/Downloads/som107.ap_a_hospitals.pdf.

Physician’s Judgment

By Medicare policy, the physician should consider the following factors in making a determination whether to admit a patient:

– The severity of the signs and symptoms exhibited by the patient;

– The medical predictability of something adverse happening to the patient;

– The need for diagnostic studies; and

– The availability of diagnostic procedures at the time.

Id.

“Complex Medical Judgment” Standard

“The decision to admit a patient is a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient’s medical history and current medical needs, the types of facilities available to inpatients and to outpatients, the hospital’s bylaws and admissions policies, and the relative appropriateness of treatment in each setting.” MBPM Ch. 1 § 10.

“Physician’s Expectation” Test

A patient should be considered an inpatient if the patient was admitted based on the physician’s expectation that an inpatient stay is appropriate. LMRP for Acute Care: Inpatient, Observation and Treatment Room Services (L1281) at 4 (January 1, 2005)

“Generally, a patient is considered an inpatient if formally admitted [by a doctor] as an inpatient with the expectation that he or she will remain at least overnight and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight.” MBPM Ch. 1 § 10

24-hour Benchmark

While Medicare guidance suggests physicians use a 24-hour benchmark for acute hospital services as a guide, “[a]dmissions of particular patients are not covered or non-covered solely on the basis of the length of time the patient actually spends in the hospital.” MBPM Ch. 1. § 10.

What happens after the decision to admit a patient is made by the treating physician can only be used to substantiate, not refute, the validity of the physician’s decision-making. BCBS LMRP at 5.

Common Published Criteria, Like InterQual, Recognize That A Physician’s Clinical Judgment Governs

“The Criteria reflect clinical interpretations and analyses and cannot alone either resolve medical ambiguities of particular situations or provide the sole basis for definitive decisions. The Criteria are intended solely for use as screening guidelines with respect to the medical appropriateness of healthcare services and not for final clinical or payment determinations concerning the type or level of medical care provided, or proposed to be provided, to a patient.” InterQual, Acute Criteria Review Process, RP-14 (2005).

Multiple Choice: Reimbursement Issue That Has Been Around For More Than A Decade Means:

A. The rules aren’t very clear

B. There are a lot of judgment calls where reasonable minds can differ

C. The “decider” and the “biller” aren’t the same

D. The problem often happens late at night, on weekends, holidays or in an “emergency”

E. All of the above

Multiple Choice: Reimbursement Issue That Has Been Around For More Than A Decade Means:

A. The rules aren’t very clear

B. There are a lot of judgment calls where reasonable minds can differ

C. The “decider” and the “biller” aren’t the same

D. The problem often happens late at night, on weekends, holidays or in an “emergency”

E. All of the above

A Short History Of “Short-stay” Enforcement

Issue in OIG Work Plans for at least 10 years

Saint Barnabas Case (2005): False Claims Act utilized in patient status case

Saint Joseph’s Health System (2007): Qui Tam action brought by a former case manager– Areas of Focus

• 1-day stays• “zero-day” stays• 3-day inpatient stay with discharge to SNF• 2 and 3-day inpatient stay where reimbursement > billed

charges• ESRD cases where patient missed dialysis due to blocked

access sites

Government Enforcement and Short-Stay Admissions: US ex rel. Ramsey v. Saint Joseph’s

Qui Tam action brought by former case manager who was employed only for a few months

Relator’s complaint based largely on anecdotal case stories

Case ultimately based upon large statistical analyses

Case evidences areas of particular risk

Other Enforcement Cases

Khyphoplasty Cases: Medtronic Spine (2008), HealthEast Care System (2009)

Yale-New Haven: procedure-related admissions (2009)

Wheaton Community Hospital (2010): medically unnecessary admissions

RAC Program

QIO Initiatives

Areas of Risk

Chest Pain and Cardiac DRGs

Payments Exceeding Charges

SNF Discharges

ER Point of Entry Cases

Cases related to patients presenting after outpatient tests or procedures

Dialysis

The False Claims Act and Short-Stay Admissions

“Knowledge” Factors– Hospital Audits (or lack thereof) and Work

Plan/Corrective Action– Education of Medical Staff and Case Management

Staff– PEPPER Reports– Administration Response to Feedback from Case

Management– Administrative Reports and Internal Data (Average

Length of Stay, for example)

Auditing Patient Status Issues

Inpatient Admission Coverage Criteria

Observation Services Coverage Criteria

Condition Code 44

Hospital UR Condition of Participation

Causes of Patient Status Errors

Differences of opinion (medical necessity)

Medical record documentation issues– Unclear orders– Unclear supporting documentation– Timing of orders/authentication/

implementation

Medicare Rules (very simplified)

Admission Following Observation– Effective at time of the admitting order

After Inpatient Admission– Unless Condition Code 44

• No APC billing, even if Admission is denied– “Part B only” services

CMS Physician Order Interpretations

“Admit” = Inpatient

“Admit as inpatient” = Inpatient

“Admit for observation” = Inpatient

“Admit to observation” = Outpatient

“Place in observation” = Outpatient

“Admit to Case Management Protocol” = None

“Condition Code 44” Criteria

Admission does not meet inpatient criteria

By 1 UR Committee member and the attending physician

Decision documented in medical record

Changed before discharge and any billing

Condition Code 44 – CMS Views

No substitute for utilization management staffing or continued medical staff education

“[T]he need for hospitals to correct inappropriate admissions and to report condition code 44 should become increasingly rare.”

42 C.F.R. § 482.30/Utilization Review Committee

Defines the process for hospital determination that an “admission . . . is not medically necessary.”

Consultation with treating physician or opportunity for treating physician to be heard is required

Physician members of UR Committee have power to change status

3 Notifications Required when patient status changes

Condition Code 44 distinguished

Case Management Assignment Protocols

“Florida Protocol”

Case Management Assignment Protocol (CMAP)– Standardized decision making process – Individual or standing orders to UR personnel– Assign status using recognized criteria

Case Management Assignment Protocol

Physician determines need for hospital care– Orders: “Admit to CMAP”– “Hold” status (e.g., 2, 6, 12 hours)– Default to Outpatient (Observation)

• If assigned Observation, physician re-evaluates within 24-48 hours for inpatient admission or discharge

Simplified CMAP Flow Diagram

Physician Orders “Admit to Case Management Protocol”

Case Management Assigns Status

Admitting Status Hold Physician Re-evaluates

Discharge Inpatient Service

Outpatient /Observation Service

Summary of CMAP Demonstration Project

Involved 16 hospitals in six western states

Only 35% of the records reviewed at the end of the project had evidence of use of the CMAP – but still showed measurable results overall

Variability in implementation of the protocol

Percentage of unnecessary short stays admissions decreased from 26.4% to 12.4%

Overall, the rate of short stays remained the same or increased for most hospitals

Lessons Learned from the CMAP Demonstration Project

Use of CMAP resulted in reduction in denial rates but NOT in short stays.– Shift from longer IP admission to observation status + short stay.– More accurate– Less expensive for CMS– Focus on decrease in denial rates not decrease in short stays

Possible nurse staffing issues with observation units

Training in use of protocol

Need to identify missed billing opportunities, particularly in the ED (may require additional training)

Need for a physician champion

Lessons Learned, cont’d.

Mandatory versus optional

Case management staffing issues– Improved accuracy on front-end may reduce costs involved in

appealing denials

Indirect benefits from use (or even attempted use) of protocol– Increased communication– Increased feedback– Increased sensitivity to patient status issues– Opportunities for education related to status issues– After initial resistance, physicians relieved to have case managers

with expertise available– Suggests opportunities for improvement exist, even without full

implementation of CMAP

Apparent CMS Concerns about CMAP

“Removes physician from the process”– The physician . . . responsible for a patient's care at the

hospital is also responsible for deciding whether the patient should be admitted as an inpatient

– But does it really?• Patient’s physician determined need for hospital• Medical staff physicians selected criteria

Apparent CMS Concerns about CMAP

“Defaulting to observation” (i.e., outpatient)– “General standing orders for observation services

following all outpatient surgery are not recognized.”

Long-standing distrust of “standing orders”– But see Memo to State Survey Agency Directors re:

“Standing Orders” in Hospitals (Oct. 24, 2008)

Why Isn’t Everyone Using CMAP?

NOT yet CMS approved

CMS position re “Admit to CMAP” orders – Standing or patient-specific– Supports neither Inpatient Admission nor Outpatient

Observation

MACs cannot approve proposed CMAPs

Modified Case Management Approach

No standing orders

No default to Outpatient/Observation

Case management reviews/recommends

Provides recommendation to physician

Requires separate order accepting the recommendation after it is made– Written signoff or properly noted telephone order should

be sufficient

Problems With Modified Approach

Additional Expense

Physician hassle factor– Having to sign twice

Delay – – Time before the second order does not count

• 8 hour minimum for Observation• 3 day Inpatient stay for SNF coverage

Current CMAP Conclusions

Sooner or later RACs will audit

CMAP actually works

Nevertheless, not CMS approved

Reliance on CMAP could lead to 100% denials– No orders for services

Modified CMAP approach may help

Saint Joseph’s Response: Systems Improvement

Proactive Response to Strengthen Case Management– Training– Mandatory Credentialing– Independent Review of Performance

Addition of Physician Advisor

Strengthening of UR Committee Function and Performance

Administration Support

Compliance Program Involvement

Saint Joseph’s Response: A Unique CIA

HHS-OIG approves use of “Admit to Case Management Protocol” as part of CIA

First case authorizing protocol by CIA

Outside of 6-state pilot

Allows Case Management Involvement with Physician at Front End of Process

Physician must still order status

Status held until consultation

Questions

RAC Risk Areas:Hospital Patient Status

Robert D. Stone, Esq.Alston & Bird LLP

Georgia Hospital Association

July 15, 2010