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Addressing Clinical Documentation, Orders and Case Management Processes to Avoid

Recoupment and Win Appeals

Presented to:

Judy Elkourie

Clinical Education Manager

205-314-8822

Joan C. Ragsdale, JD

Chief Executive Officer

205-970-8804

The Ambiguity of Federal Medicare Law Title XVIII of the Social Security Act,

Section 1862(a)(1)(A) states that no Medicare payment shall be made for items or services which are not reasonable and necessary for the diagnosis or treatment of illness or injury Private Insurers and Medicaid have

different rules. Beware!

The Essence of the Problem

Hungry RACs

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In 2012 fiscal year, RACs collected $2.29 billion in overpayments (3x the 2011 amount). The most common reason for complex

denial “short-stay medically unnecessary.” Hospitals report appealing 40% of all

denials. Of claims appealed, 74% were overturned

in favor of the provider.

4 Medicare RACs are growing, with Connolly a leader in growth of charts requested, and recoupment amounts $2.29 billion in overpayments from the

RACs 12% of hospitals reported spending more

than $100,000 managing the RAC process during the third quarter alone Dramatic increases in medical record

requests-68% increase from 1st to 3rd qtr.

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Recovery Auditor FY 2012 Update

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Other, Scarier Agencies

Other Government entities will still investigate and enforce CMS regulations DOJ (Department of Justice) OIG (Office of the Inspector General for HHS) FIs/MACs (Medicare Administrative Contractors) MICs, ZPICs (Medicaid and Program Integrity) PSCs and other Gov’t contractors

These non-RACs are not constrained by the relatively kind RAC audit guidelines Longer statute of limitations Can and will apply extrapolation Can EXCLUDE a provider from Medicare Can criminally prosecute

So, Careful Attention to Compliance is a Must

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Common Problem Areas

Inpatient only list and interpretation that a procedure “must” be done outpatient unless there is a complication Interqual used as definitive arbiter of

medical necessity rather than as a screen Inpatient v. Outpatient relative to short

stays. (In fiscal 2012, 61% of medical necessity denials were for one-day stays in the wrong setting, not because the care was not medically necessary).

What Is Level of Care (LOC)?

In the good old days, we admitted patients to the hospital; or not. Observation in an

inpatient hospital “outpatient” bed was concocted to help us! Now, forces of evil

wield it against us.

Orwellian Double-Speak LOC is a patient’s

status in a hospital Only 2 LOC exist

Inpatient ($$$$$) Outpatient ($) Observation (¢) is

a service that and MD must order.

Inpatient Status

Outpatient Status

Observation is a service, not a status.

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Auditors and Government Agencies Will Attack Based on Simple Wording Errors Payments for Major Surgery and MI Care

with PCI have been denied based on lack of a properly written order A doctor’s orders must be precise, written

eventually, authenticated, dated, and timed. Admit to Inpatient Status (Bed)

Or Place in Outpatient Status/bed + Begin observation services now.

Painful Semantic Lessons

Mandated Tension Deciding LOC

Conditions of Participation Mandates UR screening of Admissions 42CFR482.30

Program Integrity Manual Mandates “shall use a screening tool” PIM section 5.6.1

MBPM mandates MD final decision based on “complex medical judgment” MBPM chapter 1 section 10.

CoP mandate MD consent (42CFR482.30(d)(1)

CMS transmittal prohibits UR changing inpatient to outpatient without MD “concurrence.” CMS transmittal 1745

PIM prohibits decisions on LOC based on screening instrument alone (“in all cases…reviewer applies…

clinical judgment”) PIM section 6.5.1

So Why Is This Fraud?

Hospitals must establish a process to accurately determine inpatient admission versus Outpatient status (aka the level of care (L.O.C)).

Federal regs (C.O.P) 42CFR482.30 requires hospitals to establish a “Utilization Review plan” to ensure compliance with Medicare L.O.C. rules.

Doctors must order the L.O.C. Ch 1, Section 10, MBPM

Doctors certify every code, note, and bill is compliant with all CMS rules.

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Doctors May Not Default to Inpatient Admission

Can’t just assign all patients inpatient status and let someone else figure it out later

Every change from inpatient to outpatient status is automatically scrutinized.

Use of Condition Code 44 is not intended to serve as a substitute for adequate staffing of utilization management personnel or for continued education of physicians and hospital staff about each hospital’s existing policies and admission protocols. As education and staffing efforts continue to progress, the need for hospitals to correct inappropriate admissions and to report condition code 44 should become increasingly rare. Medicare Claims Processing Manual 50.3.2

But, Don’t Default to Outpatient Obs

Technically Violates the Law, plus Carries a Devastating Financial Impact:

Inpatient – CHF - $4,820 (HSR $5,500) Observation – 24-48 hour stay – Estimated

reimbursement = $800

Difference approximately $4,000 per case

Can add up to REAL $$$ very quickly

It May Hurt Patients Too

July 7, 2010 The Centers for Medicare & Medicaid Services (CMS) has

become increasingly concerned about an increase in outpatient observation services…

We are unaware of any policies that would cause a hospital to extend observation care for Medicare patients. As it not in the hospital's or the beneficiary's interest to extend observation care rather than either releasing the patient from the hospital or admitting the patient as an inpatient, we are interested in learning more about why this trend is occurring and would appreciate any information you can share to better inform further actions CMS can take on this issue.

Sincerely,Marilyn TavennerActing Administrator and Chief Operating Office

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CMS rules are really quite simple

Or, Maybe Not That Simple…

The Social Security Act and its regulations promulgated by the Department of Health and Human Services ("HHS") that implements it "present as complex a legislative mosaic as could possibly be conceived by man." City of New York v. Richardson, 473 F.2d 923.926 (2d Cir. 1973); accord Beverly Community Hospital Ass'n v. Belshe, 132 F.3d 1259,1266 (9th Cir. 1997) (finding that "clarity is recognized as totally absent from the Medicare and Medicaid statutes"), cert denied, 119 S. Ct. 334 (1998); Rehabilitation Ass'n of Va.,Inc. v. Kozlowski, 42 F.3d 1444, 1450 (4th Cir. 1994) (characterizing Medicaid as"among the most completely impenetrable texts within human experience" and "dense reading of the most tortuous kind").

Messier v. Southbury Training School, et al., 1999 WL 20910 (D. Conn.)

915 Total Reviews

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Not InterQual. Not Milliman. No Numbers

Chapter 6 of the Program Integrity Manual controls the medical review process for determining the medical necessity of inpatient admissions. RACs and MACs must follow the instructions contained therein (Medicare Program Integrity Manual, Chapter 1, section 1.1). The instructions mandate that, “In all cases, in

addition to screening instruments, the reviewer applies his/her own clinical judgment to make a medical review determination based on the documentation in the medical record.” (Medicare Program Integrity Manual, Chapter 6, section 6.5)

REGULATIONS-CMS Inpatient Definition

“An inpatient is a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services.”

Source: Medicare Benefit Policy Manual, Chapter 1

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REGULATIONS-CMS Inpatient Details

“Generally, a patient is considered an inpatient if formally admitted as 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.”

Source: Medicare Benefit Policy Manual, Chapter 1

Expected to Need Inpatient Care for 24h

Physicians should use a 24-hour period as a benchmark, i.e., they should order admission for patients who are expected to need hospital care for 24 hours or more, and treat other patients on an outpatient basis.

Source: Medicare Benefit Policy Manual, Chapter 1, Section 10

The Actual Time In The Hospital…

“Admissions of particular patients are not covered or noncovered solely on the basis of the length of time the patient actually spends in the hospital.”

27Source: Medicare Benefit Policy Manual, Chapter 1, Section 10

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How MD Forms This Expectation

“…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 type of facilities available to inpatients and outpatients, the hospital’s by-laws and admissions policies, and the relative appropriateness of treatment in each setting.”

Source: Medicare Benefit Policy Manual, Chapter 1

Factors Bearing on Inpatient Expectation

“Factors to be considered when making the decision to admit include such things as: 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 that appropriately are

outpatient (i.e., their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more) to assist in assessing whether the patient should be admitted; and

The availability of diagnostic procedures at the time when and at the location where the patient presents.”

Source: Medicare Benefit Policy Manual, Chapter 1

“Need” an Acute Threat

Inpatient care rather than outpatient care is required only if the beneficiary's medical condition, safety, or health would be significantly and directly threatened if care was provided in a less intensive setting.

The reviewer shall consider, in his/her review of the medical record, any pre-existing medical problems or extenuating circumstances that make admission of the beneficiary medically necessary.

Medicare Program Integrity Manual Chapter 6 - Intermediary MR Guidelines for Specific Services 6.5.2 - Medical Review of Acute Inpatient Prospective Payment System (IPPS) Hospital or Long-

term Care Hospital (LTCH) Claims A. Determining Medical Necessity and Appropriateness of Admission

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Patient or Family Worry is Not Enough

Without accompanying medical conditions, factors that would only cause the beneficiary inconvenience in terms of timeand money needed to care for the beneficiary at home or for travel to a physician's office, or that may cause the beneficiary to worry, do not justify a continued hospital stay.

Medicare Program Integrity Manual Chapter 6 - Intermediary MR Guidelines for Specific Services 6.5.2 - Medical Review of Acute Inpatient Prospective Payment System

(IPPS) Hospital or Long-term Care Hospital (LTCH) Claims A. Determining Medical Necessity and Appropriateness of Admission

What is the Requisite Intensity?

Auditors love attacking hospitals with the PIM intensity stick.

must receive services of such intensity that they can be furnished safely and effectively only on an inpatient basis.

Medicare Program Integrity Manual,Chapter 6 - Intermediary MR Guidelines for Specific Services, 6.5.2 - Medical Review of Acute Inpatient Prospective Payment System (IPPS) Hospital or Long-term Care Hospital (LTCH) Claims (Rev. 264; Issued: 08-07-08; Effective Date: 08-01-08; Implementation Date: 08-15-08)

No mention of IV fluid rate, hospital ward v ICU, oxygen minimums…etc…

previously defined as a 24 or more hour physical hospital setting

“in many institutions there is no difference between the actual medical services provided in inpatient and outpatient observation settings” … “the designation still serves to assign patients to an appropriate billing category.”

Novitas LCD L27548 AND WPS L32222!

Surgery NOT on Inpatient-Only List

“Minor Surgery or Other Treatment –

When patients with known diagnoses enter a hospital for a specific minor surgical procedure or other treatment that is expected to keep them in the hospital for only a few hours (less than 24), they are considered outpatients for coverage purposes regardless of the hour they came to the hospital, whether they used a bed, and whether they remained in the hospital past midnight.”

Source: Medicare Benefit Policy Manual, Chapter 1, Section 10

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“Exclusions” Trump Card Custodial care is excluded from coverage. Custodial care serves to assist an individual in the

activities of daily living, such as assistance in walking, getting in and out of bed, bathing, dressing, feeding, and using the toilet, preparation of special diets, and supervision of medication that usually can be self-administered. Custodial care essentially is personal care that does

not require the continuing attention of trained medical or paramedical personnel. In determining whether a person is receiving custodial

care, the intermediary or carrier considers the level of care and medical supervision required and furnished. It does not base the decision on diagnosis, type of condition, degree of functional limitation, or rehabilitation potential.

Medicare Benefit Policy ManualChapter 16

110 - Custodial Care (Rev. 1, 10-01-03) A3-3159, HO-260.10, HO-261, B3-2326

Events and Facts After the Admission

Inpatient vs. Observation determinationEvidentiary Rules

QIOs (and RACs)* consider only the medical evidence which was available to the physician at the time an admission decision had to be made. They do not take into account other information (e.g., test results) which became available only after admission, except in cases where considering the post-admission information would support a finding that an admission was medically necessary.

Medicare Benefit Policy Manual,Chapter 1 ,Page 8, § 10* Sacred Heart v. First Coast, Medicare Appeals Council, Nov. 10, 2009

Practical Application

Utilization Review nurses apply screening criteria (normally Interqual© or Milliman) Order Supported by Documentation? Physician Advisor consulted

Applies CMS criteria May call the attending for additional information Makes a recommendation on level of care

(Inpatient vs. Outpatient w/ Observation Services vs. Outpatient

Letter of Determination sent back to hospital and physician’s office

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Practical Application

Benefits of Physician Advisors Interpret CMS guidelines in medical terms Takes burden off the attending physician of

knowing all the nuances that drive the level of care decision

Conversations between attending physician and physician advisor allows transfer of knowledge regarding the CMS regulations

Case 1: Acute GI Bleed

85 year old man presented to the ER one hour after vomiting “a lot” of bright red blood.

Medical History: CAD, cardiac stents, and CHF.

Taking both aspirin and plavix, plus a beta blocker

Case 1: GI Bleed

Exam: Pulse = 90, BP=120/60 Otherwise

unremarkable Hgb/HCT 12/36

(baseline) BUN 28/Creat. 0.8

NG tube aspirated guiac positive coffee ground material Guiac positive

normal appearing stool on rectal exam No further

complaints or events in the ER

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Case 1: GI Bleed

Milliman recommends observation

Interqual recommends observation

The Physician Advisor Recommends inpatient admission based on Medicare guidelines.

Complex medical judgment supports the expectation of 24 or more hours of hospital care.

Case 1: Why The Disparity?

Scientifically, one can not assess the severity of a GI bleed by the initial Hgb/HCT. Tachycardia is masked

here by a beta blocker The patient’s cardiac

history escalates his risk. His medications

escalate his risks.

Case 1 is an Inpatient Admission

The risk posed by this patient’s presenting symptoms and past cardiac history …

Predict the need for 24 hours of hospital care

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Case 2: Syncope

69 year old man presented to the ER after passing out. Without warning, he

went from standing to lying on the ground No memory of how No prodromal

symptoms.

Case 2: Syncope

Past Medical History: HTN, diabetes Medications: ASA,

Toprol, Vasotec, lasix, glyburide

Exam: Normal exam and vital signs Normal neuro exam EKG: NSR with some

PVCs. Lab: glucose 180 at

the scene (EMS). Normal CBC and

Chemistries. BNP 643. Troponin

<.01

Case 2: Syncope

Milliman recommends observation.

Interqual recommends observation.

The physician advisor recommends inpatient admission.

Complex medical judgment supports the expectation of 24 or more hours of hospital care.

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Why the Disparity?

His cardiac history increases his risk of Vtac and Vfib.

His history (the absence of any warning symptoms) suggests a sudden ventricular arrhythmia.

Case 2 is an Inpatient Admission

This patient’s suspiciously unheralded loss of consciousness plus his high Vtac risk cardiac history…..

Support the expectation of needing more than 24 hours of hospital level care

Case 3: Chest Pain

49 year old woman presented with severe chest pain for 7 hours. Constant and 10/10

pain Past history of

disabling chronic back pain, GERD, smoking, diabetes, and HTN.

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Case 3: Chest Pain

EKG and Cardiac Markers were normal. Minimal relief with

NTG. Admitted for severe

GI related chest pain. Started on IV

protonix. GI consult called for

planned EGD in am.

Case 3: Chest Pain

Milliman recommended observation.

Interqual recommended observation.

The physician advisor recommended observation because the risk for an acute cardiac event was low and the severe pain could have been managed outside a hospital. GI referral could have waited a bit.

Case 4: Chest Pain!

77 year old man presented to the ER with 4 hours of fluctuating chest pain. Each episode occurred

at rest and was aborted with NTG. This is new. He had

been CP free for years after a stent.

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Case 4: Chest Pain!

Medical History: 2 prior MI, CABG, stents.

Compliant with all Medications

Taking Plavix and Aspirin.

He was chest pain free on arrival to the ER

Troponin was <0.01

EKG was normal

All other labs and Exam were normal.

Case 4: Chest Pain!

Milliman recommended observation.

Interqual recommended observation.

The physician advisor recommended inpatient admission.

Complex medical judgment supports the expectation of more than 24 hours of hospital care here.

Case 4: Why the Disparity?

This is classic unstable coronary syndrome in a known CAD patient.

Neither troponin or the EKG can detect intermittent ischemia

This patient has been self treating ACS

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Case 4 is an Inpatient Admission

This patient had known CAD with prior MI. The unique details of the presentation demonstrate that a high risk for MI and cardiac death remain despite negative testing. Most doctors would

expect more than 24 hours of hospital care to cool down the artery and proceed to cath.

OIG Review of ALJ Opinions

The OIG reviewed the appeals process and recommended that CMS: (1) develop and provide coordinated training on Medicare policies to ALJs and QICs, (2) identify and clarify Medicare policies that are unclear and interpreted differently, (3) standardize case files and make them electronic, (4) revise regulations to provide more guidance to ALJs regarding the acceptance of new evidence, and (5) improve the handling of appeals from appellants who are also under fraud investigation and seek statutory authority to postpone these appeals when necessary. OIG recommended that recommend that the Office of Medicare Hearings and Appeals (OMHA): (6) seek statutory authority to establish a filing fee, (7) implement a quality assurance process to review ALJ decisions, (8) determine whether specialization among ALJs would improve consistency and efficiency, and (9) develop policies to handle suspicions of fraud appropriately and consistently and train staff accordingly, and that CMS: (10) continue to increase CMS participation in ALJ appeals.

Practical Steps Know who is auditing Know target area by agency Know areas that are ambiguous, and make certain documentation is

clear Pay attention to patient complaints or employee concerns Pay attention to PEPPER Reports and other communications showing

aberrant practices Processes must be continually updated to address concerns Resources must be allocated to training and education—not abstract

training but concrete requirements Address documentation requirements in the context of EHRs Create a culture of compliance. Make certain efforts are documented

and supported by solution pathways Recognize that there is pressure to reduce success at the ALJ level.

Make certain appeals are well documented and supported Provide feedback between recoupment activities, appeals and

concurrent processes Make certain that educational efforts are throughout the organization.

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Questions

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