Observation status and ethical considerations for case managers

Observation status and ethical considerations for case managers Carrie Valiant, Esq. Member, Epstein Becker & Green Founder and President Health Care Industry Access Initiative Patrice Sminkey Chief Executive Officer Commission for Case Manager Certification 1 Proprietary to CCMC

Agenda Welcome and Introductions Learning Objectives Patrice Sminkey, CEO, the Commission Carrie Valiant, Esq., member, Health Care and Life Sciences practice of the Epstein Becker & Green law firm; and founder and president, Health Care Industry Access Initiative Question and Answer Session 2

Audience Notes There is no call-in number for today s events. Audio is by streaming only. Please use your computer speakers, or you may prefer to use headphones. Please use the chat feature on the lower left-hand part of your screen to ask questions throughout the presentations. Questions will be addressed as time permits after both speakers have presented. A recording of today s session will be posted within one week to the Commission s website, http://www.ccmcertification.org One continuing education credit is available for today s webinar only to those who registered in advance and are participating today. 3

Learning Objectives Overview After the webinar, participants will be able to: Demonstrate familiarity with the eight principles of the Code ofprofessional Conduct for Case Managers; Describe how the Commission s Code of Professional Conduct supports and clarifies the case manager s priorities and role as patient advocate while balancing the need for efficiency and resource management; Summarize the appropriate designation of patients under observation status versus inpatient admission in the hospital, as well as other current practices and challenges to patient access. 4

Introduction Patrice Sminkey Chief Executive Officer Commission for Case Manager Certification

Webinars Certification Workshops Issue Briefs Speaker s Bureau www.ccmcertification.org 6

Why a code of professional conduct for case managers? Protect the public interest http://ccmcertification.org/content/ccm-examportal/code-professional-conduct-case-managers 7

Principles Rules of Conduct Standards for Professional Conduct Procedures for Processing Complaints 8

Principle 1: Certificantswill place the public interest above their own at all times. Principle 2: Certificantswill respect the rights and inherent dignity of all of their clients. Principle 3: Certificantswill always maintain objectivity in their relationships with clients. 9

Principle 4: Certificantswill act with integrity in dealing with other professionals to facilitate their clients achieving maximum benefits. Principle 5: Certificantswill keep their competency at a level that ensures each of their clients will receive the benefit of services that are appropriate and consistent for the client s conditions and circumstances. 10

Principle 6: Certificantswill honor the integrity and respect the limitations placed on the use of the CCM designation. Principle 7: Certificants will obey all laws and regulations. Principle 8: Certificantswill help maintain the integrity of the Code. 11

Observation status and ethical considerations for case managers Carrie Valiant, Esq. Member, Epstein Becker & Green Founder and President Health Care Industry Access Initiative 12

Code of Professional Conduct for Case Managers Observation Status and Ethical Considerations for Case Managers

What is Observation? Observation includes ongoing short term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. Medicare Benefit Policy Manual, CMS Pub. No. 100-02, Ch. 6, 20.6. Same language in Medicare Claims Processing Manual, CMS Pub. No.100-04, Ch. 4, 290.1. Observation services are commonly ordered for patients who present to the emergency department and who then require a significant period of treatment or monitoring in order to make a decision concerning their admission or discharge. The purpose of observation is to determine the need for further treatment or for inpatient admission. A patient receiving observation services may improve and be released, or be admitted as an inpatient

Observation Services Not a status a type of outpatient service When a physician orders that a patient receive observation care, the patient s status is that of an outpatient. Outpatient: a person who has not been admitted by the hospital as an inpatientbut is registered on the hospital records as an outpatient and receives services... from the hospital. Inpatient: a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services. Status usage for observation is still very common

Medicare hospital inpatient vs. outpatient status vs. observation Case manager expertise being called on to Apply Interqual/Milliman standards Educate physicians Patient Status Make status determination

Patient Status Ramifications for patients coverage of post- hospital services coinsurance obligations Ramifications for hospital amount of reimbursement (usually) potential False Claims Act liability

Observation Manuals say observation should not exceed 24-48 hours Also, patients who begin as inpatients may later be changed to outpatient/observation (Condition Code 44) Condition Code 44, Transmittal 299 (Sep. 2004), now at Medicare Claims Processing Manual, CMS Pub. No. 100-04, Ch. 1, 50.3, http://www.cms.hhs.gov/manuals/downloads /clm104c0 1.pdf(p. 138)

Observation Increasingly, longer stays in an acute care hospital may be called observation services Why? Focus on readmissions there can t be a readmission if there wasn t an admission in the first place! Government scrutiny of medical necessity of inpatient admissions, particularly short stays Hospital complaints that auditors were denying large numbers of claims for inpatient care because the patient could have been considered an outpatient under observation.

OIG July 2013 Report Hospitals Use of Observation Stays and Short Inpatient Stays for Medicare Beneficiaries, OEI-02-12-00040 Found that Medicare beneficiaries had 1.5 million observation stays in 2012, spending 1 night or more in the hospital. An additional 1.4 million long outpatient stays, some of which may have been observation stays Of the observation stays 11% of observation stays were at least 3 nights 26% of observation stays were two nights

Characteristics of Longer Observation Stays Most common problems associated with longer observation stays (in descending order) Back problems Signs and symptoms Nutritional disorders Digestive disorders Circulatory disorders Dizziness Fainting Respiratory Signs and Symptoms Irregular heartbeat Chest pain (#1 reason for observation and short inpatient stays) Most long outpatient stays began in the ED.

Consequences of Conversion to Observation Denial of coverage for post-acute care Denial of coverage for inpatient drugs Additional coinsurance cost to patient

Billing and Financial Ramifications Medicare generally pays more for a short inpatient stay than an observation stay. But beneficiaries may pay more. There is no cap on the aggregate outpatient 20% coinsurance amount Coinsurance is charged separately with respect to each service/item received in observation Self-administered drugs are not covered during an outpatient visit (but they are covered during an inpatient visit Thus, coinsurance charges and charges for non-covered services may be higher than the inpatient deductible.

OIG Report Beneficiaries in observation stays sometimes paid more than the deductible charged to beneficiaries in inpatient stays. For 6 percent of all observation stays, or 83,747 stays, beneficiaries paid more than the inpatient deductible. Notably, for 3,439 observation stays, beneficiaries paid more than two times the inpatient deductible.

Coverage Consequences for Patients SNF benefits depend on a qualifying inpatient hospital stay The beneficiary must have been hospitalized... for medically necessary inpatient hospital care... for at least 3 consecutive calendar days, not counting the day of discharge. 42 C.F.R. 409.30(a)(1)

Coverage Consequences for Patients Time spent in observation status in the emergency room prior to (or instead of) an inpatient admission does not count toward the 3-day qualifying inpatient stay. Medicare Benefit Policy Manual, CMS Pub. No. 100-02, Ch. 8, 20.1.

Hospital billing Ramifications If the patient is admitted as Inpatient after Observation, it is effective at time of the admitting order This means that generally only certain Part B only services can be billed before the inpatient admission This means there is no compensation for routine services/bed and board prior to inpatient admission

Condition Code 44 Criteria Condition code 44 changes a patient's initial inpatient status to outpatient for purposes of billing and payment. Must meet the following criteria UR Committee decides inpatient criteria are not satisfied A physician concurs with the utilization review committee s decision Change is made before discharge Patient rights, notice and participation interpretation Hospital has not submitted a Medicare claim Observation time starts when the physician orders observation and nursing begins to implement it. Not retroactive; time on inpatient status does not count

Condition Code 44 Patients may begin as inpatients and end up outpatients prior to discharge. Patient notice of retroactive changes is not required because a change in status is not considered a denial of coverage. Some hospitals have special observation units but many do not. So patients on observation may be in a bed on a regular inpatient unit, getting treatment and services exactly the same as inpatients.

Case Management Assignment Protocol (CMAP) Physician determines need for hospital care Orders: Admit to Case Management Protocol Possibly standing orders Hold status for X hours (e.g., 2, 6, 12) while Utilization Management assigns status using established criteria Default to Outpatient/Observation if not assigned during the hold period If assigned to Observation, physician re-evaluates within 24-48 hours for possible inpatient admission or discharge

Pros and Cons CMS has not approved the use of CMAP A specific physician order is required for either Inpatient Admission or Observation CMS has stated concern that standing orders remove the physician from the decision making process

Pros and Cons There is physician involvement Medical staff involved in creation of the protocol even if not in individual decision Physicians not educated in intricacies of patient status Hospitals generally use InterQualcriteria (McKesson Corp.) to make status decisions Criteria is based on severity of illness and intensity of service

Modified Case Management Approach No standing orders No defaults Case management reviews/recommends Recommendation communicated to physician Requires separate physician s order accepting the recommendation after it is made

Two Midnight Rule Audit presumption that stays lasting two midnights or longer arereasonable and necessary and will qualify for inpatient admission under Medicare Part A. Stays lasting less than two midnights will not be presumed to qualify as inpatient stays and instead will be paid under Medicare Part B, which covers outpatient services. When the physician expects to keep the patient in the hospital for only a limited period of time that does not cross two midnights, the services are generally inappropriate for [inpatient] payment under Medicare Part A, regardless of the hour that the patient came to the hospital or whether the patient used a bed. Physician must sign an admitting order, which must be supported by the physician admission and progress notes, in order for the hospital to be paid for hospital inpatient services under Medicare Part A.

Two Midnight Rule The two midnight clock begins when the patient starts receiving hospital services (including observation services). September 26 open-door forum, CMS clarification If a patient stays one midnight in observation and the physicianexpects that the patient will require at least another midnight in the hospital, the patient can be appropriately admitted despite the fact that it will be a one-day inpatient stay. If a patient is admitted but ultimately doesn t stay two midnights, clear physician documentation supporting the order and expectation of two midnights will be required. RAC auditors will review cases with stays less than two midnights. If a facility is audited, the reviewers will look for a codified physician order and certification, plus supportive documentation. However, the clock for beneficiary qualification for SNF services remains the same, only from the time of the inpatient admission.

Two Midnight Rule Expected to result in a net increase of around 40,000 admissions nationally, with a substantial increase in two-day cases. CMS proposed a 2% payment cut to pay for the increase in admissions. Legal Challenges Hospital systems and trade associations filed suit Disagree that all stays shorter than two midnights are inappropriate Physician judgment should be the only factor considered for an inpatient admission.

Contact Information and Disclosure Carrie Valiant, Esq. Partner Epstein Becker Green 1227 25 th Street NW, Suite 700 Washington, D.C. 20037 202-861-1857 CValiant@ebglaw.com Epstein Becker Green is one of the largest health care law firmsin the United States. Our firm represents a wide range of organizations in the health care industry including health professionals, management companies, equipment suppliers, health systems, payors and manufacturers. For more information, please visit our website at: www.ebglaw.com

Question and Answer Session Commission for Case Manager Certification 15000 Commerce Parkway, Suite C, Mount Laurel, NJ 08054 1-856-380-6836 Email: ccmchq@ccmcertification.org www.ccmcertification.org 38 Proprietary to CCMC

Thank you! Please fill out the survey after today s session Those who signed up for Continuing Education will receive an evaluation from the Commission. A recording of today s webinar and slides will be available in one week at www.ccmcertification.org 39 Proprietary to CCMC