IPPS Observation vs. Inpatient Admissions Training Questions and Answers

IPPS Observation vs. Inpatient Admissions Training Questions and Answers The following questions and answers are from the Part A IPPS Observation vs. Inpatient Admissions web-based trainings conducted March 27 th and 28 th, 2012. Similar questions were combined to eliminate redundancies. Q1. Do CMS regulations state that notification of the status change must be in writing or is this a recommendation from Noridian? A1. Per CMS MLN SE SE0622, If the UR committee determines that the admission is not medically necessary, the committee must give written notification, no later than 2 days after the determination, to the hospital, the patient, and the practitioner responsible for the care of the patient. http://www.cms.gov/outreach-and- Education/Medicare-Learning-Network- MLN/MLNMattersArticles/downloads//SE0622.pdf Q2. I want to verify that we can bill revenue code 762 with no CPT or HCPCS code. A2. Per the CMS instructions, revenue code 762 without a HCPCS code should be used to report the time between the beginning of an encounter and the time an order for observation is given when the decision is made that an inpatient admission should be changed to an outpatient stay. Observation time after the order is to be reported with revenue code 762 and HPCPS code G0378. Please refer to the Medicare Claims Processing Manual, Internet Only Manual (IOM) Publication 100-04, Chapter 1, Section 50.3.2. Q3. Will you comment on hospital transfers in relation to patient status: patient has been an inpatient at hospital X and is transferred to hospital Y. Is there ever an instance when this would not be inpatient at the receiving hospital? A3. This is a medical necessity issue. The expectation is that the receiving hospital would evaluate the patient upon arrival and make a decision as to the need to admit the patient based on that evaluation, not just the status of the patient in the transferring facility. Q4. Where can we find information on what new procedures are allowed as inpatient- such as laser lead extractions or coiling for carotid/brain aneurysm? A4. Each year CMS updates the Outpatient Prospective Payment Final Rule Addendum E, which is a listing of the procedures that CMS has determined can only be safely performed in an inpatient setting. Please refer to the Hospital OPPS

information at http://www.cms.gov/medicare/medicare-fee-for-service- Payment/HospitalOutpatientPPS/index.html. Q5. Can we only bill for inpatient procedures if the procedure is on the Inpatient- Only list? Some payers have denied the procedure as inpatient because it was not on the Inpatient-Only list. A5. The Inpatient-Only list identifies procedures that CMS feels can be performed safely only in an inpatient setting. It does not preclude other procedures from being performed in an inpatient setting. Q6. Does CMS follow 2009 heart & rhythm society guidelines for inpatient admission post EPS/Ablation /pacer placement? A6. Those guidelines are not Medicare specific; when they say inpatient, they don t necessarily mean that it couldn t be observation to watch the patient overnight. We do look at the guidelines, and we look at medical necessity. The vast majority of admissions after placement or replacement of a pacemaker require only observation to monitor with routine telemetry. Q7. Is there a circumstance when G0378 and G0379 can be billed together? A7. Yes. G0379 is defined as direct admission of patient for hospital observation care and is used to report a direct referral to observation when the referral is made by a physician who saw the patient in the community setting, rather than a referral made by a physician who is treating the patient in the hospital setting, i.e., emergency department or outpatient surgery. G0378 is defined as hospital observation service, per hour ; it is used to bill the amount of time the patient is in observation. Claims submitted with G0379 alone will be RTP d. Please refer to the Medicare Claims Processing Manual, IOM Publication100-04, Chapter 4, Section 290.5.1.. Q8. Are there any instances where you could be able to bill G0378 prior to G0379? Or does G0379 (direct admit) ALWAYS precede G0378 (observation)? A8. No; you are not able to bill for observation until there is an order for that observation. The order cannot be made retroactive to the initiation of the service. Q9. Regarding documentation of the transition between direct supervision and general supervision in an observation stay, does the disposition documentation in an H&P meet the requirement for documentation? A9. Per the Medicare Benefit Policy Manual, IOM Publication 100-02, Chapter 6, Section 20.7, The point of transition to general supervision must be documented in the patient s progress notes or medical record. The manner of documentation is otherwise at the discretion of each supervisory practitioner. Please refer to this section for additional

information about physician supervision for non-surgical extended duration therapeutic services. Q10. Why is the admission time based on the time the patient got to unit/bed not from time of the physician order? A10. There needs to be evidence that services are provided. Some admission orders are given from a physician office before the patient arrives at the facility. In other cases, the patient may be in the emergency room waiting for a bed; until documentation supports they are receiving inpatient care, they continue being an outpatient. Q11. If the emergency department physician writes the inpatient order on 3/1 at 2230 and the patient gets to the unit/bed at 0015 on 3/2, what date does inpatient start? A11. The admission date would be 3/2, because that is when inpatient services began. Q12. Is the admission date/time ever taken from nursing documentation, i.e., "patient admitted to room XXX at 0015 on 3/2" in a progress note? Why are date/times of admission/discharge taken from different sources (d/c order time from d/c note vs. inpatient order? A12. All information in the chart is evaluated to determine the patient is receiving inpatient services. This includes time and dates of orders, patient status and any associated physician or nursing notes. Q13. Doesn t condition code 44 allow for retroactive admission to observation? A13. Condition code 44 is used when it is determined that an inpatient admission was not medically necessary, and the stay should have been an outpatient status. If all the criteria for using condition code 44 have been met, the entire stay is treated as an outpatient service. However, observation, like other outpatient services, can be billed only after there is an order for the service. The order cannot be retroactive.please refer to the Medicare Claims Processing Manual, IOM Publication 100-04, Chapter 1, section 50.3.2, for more information about the criteria for use of condition code 44 and the proper billing of services when it can be used. Q14. If a patient is admitted as an inpatient and the Utilization Review nurse finds that the admission does not meet IP criteria, can the admission order be rescinded and the stay converted to outpatient without observation minutes? A14. Please refer to the IOM, 100-04, Chapter 1, Section 50.3 for the rules on changing an inpatient to outpatient. According to those instructions, the Utilization

Review committee must make that determination along with the physician responsible for the patient care. Q15. If a provider s intention was to transfer a patient to observation, but had written admit to obs and subsequently the patient was admitted as an inpatient, could the order be changed to reflect that the provider meant Transfer to Observation even though the patient has been discharged? A15. Once the patient has been discharged, changes cannot be made to the patient status. Q16. Dr. Hecker mentioned monthly education. Is this for physicians or hospitals? A16. This comment was made in reference to chart reviews done by Dr. Bernice Hecker, NAS Part A Medical Director. During these chart reviews, conversations occur with hospital Chief Medical Officers and other physicians. Q17. When we have discharge orders but we receive subsequent med orders by the MD, can we still continue to charge OBS hours (G0378) until those subsequent services are being provided (supported in the nursing documentation as being performed) i.e. DC orders are written "DC after LR infusion is finished" and LR continues for 5 more hours, can we continue to charge G0378 until the LR is done despite the DC order being written earlier? A17. The orders specify the patient should be discharged upon the completion of services, therefore charging through completion of the ordered services is appropriate when documentation supports the necessity of the services. However, if the services are of the type that includes a nursing component, you may not charge for both concurrently. Please refer to IOM 100-04, Chapter 4, Section 290.2.2 for more information about concurrent services. Q18. Is it true that observation cannot be billed when a provider places patient in observation and is giving the patient blood for two days? A18. In most circumstances, you wouldn't need observation to give blood. The CPT for the administration of the blood has the necessary observation in the RVU, and it wouldn't be appropriate to have both the blood administration and observation billed concurrently. Please see the IOM reference discussed in #17. Q19. Why is it that the hospital is penalized when it is the physician order that drives the patient status, and the physician documentation that determines if the surgery meets medical necessity. Why isn't payment recouped from them?

A19. Any service covered by Medicare, with the exception of certain screening services specified in law, must be provided under a physician order. The entity billing for the service needs to have the documentation to support the necessity of the service billed. Once the order has been given, the hospital has the opportunity to participate through utilization review processes. Ultimately, the hospital is the entity that provides and bills the service; therefore, payment is withdrawn from the hospital. Q20. When a physician determines a patient needs to have surgery, but it was determined later it was not medically necessary, why is the hospital penalized? The physician is responsible for the outpatient treatment prior to surgery. A20. That responsibility is taken on by the facility when the service is billed. Q21. The documentation requested for total joints looks similar to requests on an LCD. Noridian does not have an LCD for total joints. Is there one in draft? A21. At this point, there is no LCD for total joints. Review of current literature and medical practices support attempts at conservative measures should have taken place and/or the patients have degeneration supported by radiology to support need for procedure. Q22. We previously had an understanding that cancelled inpatient surgeries were billed as separate inpatient claims if the cancellation was due to a clinical reason such as the patient ate that morning, patient was sick or had an open wound, a lab value contraindicating proceeding with the procedure. If the cancel was due to a non-clinical reason such as physician scheduling conflict or supplies not on hand, that occurrence was to be treated as a leave of absence situation and those charges should be billed via one claim once the procedure is performed. A22. The information in IOM 100-04, Chapter 3, Section 40.2.5, states A patient who requires follow-up care or elective surgery may be discharged and readmitted or may be placed on a leave of absence. Hospitals may place a patient on a leave of absence when readmission is expected and the patient does not require a hospital level of care during the interim period. Examples could include, but are not limited to, situations where surgery could not be scheduled immediately, a specific surgical team was not available, bilateral surgery was planned, or when further treatment is indicated following diagnostic tests but cannot begin immediately. Institutional providers may not use the leave of absence billing procedure when the second admission is unexpected.

Q23. If a patient is in the observation status for 3 days but they have only 16 billable hours then do you have to put the other 56 non billable hours on the UB04 or can you just bill the 16 billable hours? A23. Include all hours of observation on the claim. List the 16 billable hours on one line item as covered, and bill the remaining hours on a second line item as noncovered. Q24. We have had instances where there is no order for observation or inpatient and the patient has been discharged. The intent is for inpatient, how does this get billed? A24. Per CMS instruction, if the order to admit is defective or missing, yet the physician intent, physician decision, and physician recommendation to admit to inpatient can clearly be derived from the medical records, contractors can substitute this information for a written or electronic admission order. In order for this substitution to be made, there can be no disagreement regarding the physician intent, no reasonable possibility that the care could have been adequately rendered in an outpatient setting, and the physician must have signed the documentation supporting the intent. If the documentation does not meet the criteria for determining inpatient, the stay would be billed as outpatient; since observation care also was not ordered, it is not billable. Q25. On CC44 it refers to 2 members in all other cases. Is that 2 physician members or can it be 1 physician member and 1 non-physician member? A25. Please refer to CMS MLN Matters SE0622, Clarification of Medicare Payment Policy When Inpatient Admission is Determined Not to be Medically Necessary, Including the Use of Condition Code 44: Inpatient Admission Changed to Outpatient. This document includes a discussion of the Utilization Review process and the parties involved. http://www.cms.gov/outreach-and-education/medicare-learning-network- MLN/MLNMattersArticles/downloads/SE0622.pdf. Q26. Are biventricular pacemakers considered outpatient? A26. Placements of pacemakers are not on the inpatient-only listing and most can be done safely in an outpatient setting. The need for inpatient admission would depend on the medical needs of the specific patient. Q27. Interqual criteria considers an "urgent" percutaneous coronary intervention as an inpatient procedure. Does Noridian consider urgent as IP criteria? A27. Interqual is not Medicare specific. The word urgent in and of itself does not indicate inpatient. The medical record documentation of the patient s condition would need to clearly support need for inpatient admission.

Q28. If the physician concurs with the UR nurse, is a direct UR physician to attending physician conversation necessary in order to comply with condition code 44? A28. The instructions do not specify that a person-to-person conversation take place. The recommendation/concurrence should be documented in the medical records. Q29. What do we do in a situation where the patient may have qualified as an inpatient upon presentation to the hospital, but the physician was uncertain and UR staff was not available, so the physician ordered outpatient observation. Later in the stay, the patient s condition stabilized and no longer would meet the criteria for admission, but the patient needed continuing care and was close to the 48 hour limit for observation. How do we bill this? Should we use type of bill 121 for the time after 48 hours? A29. The entire stay should be billed under type of bill 131, billing the observation hours over 48 as noncovered on a second line item. Because hours of observation beyond the first 8 are paid as part of the composite APC for extended assessment and monitoring, the payment for all additional medically necessary observation hours would be bundled into the composite APC. Type of bill 121 would only be used in situations where the patient had been admitted as an inpatient and the inpatient stay was determined to be not medically necessary. Q30. Can the terminology "Place in Outpatient Bed" be used in place of "Place in Observation Bed"? A30. Observation is a therapeutic service, not a location. The order needs to state specifically that the patient is being referred to outpatient observation. Q31. Often times the observation order or inpatient status change order are signed at different times by the MD and the Utilization Review team. Which signature/date and time do we go by? A31. Only the physician can order the inpatient or observation status. Once that order is given, observation or inpatient time would start when the patient began to receive those services. The UR committee can review for medical necessity. Q32. Can a practitioner change his/her mind and request a change from inpatient to outpatient without involvement of UR committee? A32. No, the change has to involve the UR committee. Q33. Can you clarify how to bill when surgery is cancelled? What do you do if it is an inpatient only procedure?

A33. This depends on when and why the procedure was cancelled. If the patient has been brought into the procedure room and hasn t received anesthesia, add modifier 73. If the patient has received anesthesia, use modifier 74. In the case of an inpatientonly procedure, payable services would depend on the medical necessity of the services provided. Ordinarily, patients do not come into the hospital as inpatients prior to time of surgery, so unless there was no way of determining that the surgery could not occur as planned prior to going to the procedure room, there probably would be no charges. Q34. What do we do in this scenario: the patient is observation status, a lap cholecystectomy is determined necessary. The patient is taken to the OR and a lap cholecystectomy is started. It is then determined that the procedure needs to be an open cholecystectomy, which is only payable as an inpatient. A34. There would have to be an order to admit the patient as an inpatient. Q35. Would we take a time out before starting the open cholecystectomy and write the inpatient order? A35. You do not need to stop the surgery; the documentation would need to reflect the need for the inpatient surgery, and the orders would be written when the procedure was completed. Q36. We are having accounts referred to the QIO. We have called the QIO to ask for guidance on whom we are to appeal to. A36. NAS is required to refer cases to the QIO if there is a quality of care issue, or the patient was readmitted within 30 days, or if we denied the procedure. The QIO will then review the entire record independent of the MAC. That is the only except to the usual process of submitting appeals to the MAC. Q37. The QIO mentioned that the CMS letter Proposed utilization denial or final utilization denial is old templates.they give 20 days to respond. If we are to appeal with Noridian, do we ignore the QIO letter? A37. If the QIO sends the provider a letter, the provider should appeal to the QIO. Q38. Also, some of the QIO letters mention not meeting medical necessity. If Noridian is reviewing for medical necessity, can the QIO review for the same thing? A38. The QIO reviews are independent of the reviews completed by the MAC.

Q39. You referenced "Direct Admit to Observation", however would the directive "Admit" be used with the term "Observation"? Previously, we ve been instructed the word "Admit" would be construed as an "Inpatient" status, only. A39. The term Direct Admit to Observation is used by CMS and as the definition of HCPCS G0379 for those situations where the referral to observation came from a physician in the community instead of via an encounter in the outpatient hospital setting. A case will not be determined as inpatient or outpatient status solely on the basis of the use of the words admit vs. refer, but rather by the documented intent. That being said, admit should be used for inpatient cases and referral for observation. Q40. When we receive decision letters on redetermination requests, it appears that the letters we send along with medical records giving details supporting our position are not being read. They are never referenced in the decision letter. A40. The letters do help the reviewers understand the providers decisions; however, only the documentation used in the record can be used to make a determination. This makes it especially important that all the details are documented initially. Q41. Where can I find in writing that observation hours over 48 need to be reported in the non-covered column? I have seen this suggested as an option but not seen it documented as a requirement. A41. The Fiscal Intermediary Shared System (FISS) began editing claims with observation hours over 48 in 1994. Observation line items with more than 48 units are Returned to Provider (RTP d) with reason code E51#L. Hours over 48 can be submitted as non-covered on a second line item. Q43. We do not feel it is appropriate to submit claims showing the time beyond 48 hours as non-covered as we believe the care is medically justified. How do we submit this so it will be reviewed? A43. Per the CMS Benefit Policy Manual, IOM Publication 100-02, Chapter 6, Section 20.6, In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours. In only rare and exceptional cases do reasonable and necessary outpatient observation services span more than 48 hours. Accordingly, FISS edit E51#L is hard-coded to capture and return to the provider (RTP) claims with covered observation units exceeding 48 hours. To accurately report all hours of observation provided, any observation over 48 hours will have to be placed on a separate line item as non-covered. Because payment for observation over 8

hours is made through the composite APCs for extended assessment and management, review of those hours would not result in a difference in reimbursement.