Hospitalized, but Not Admitted:

Hospitalized, but Not Admitted: Admission Status and Medical Necessity Bart Caponi, MD Division of Hospital Medicine Department of Medicine University of Wisconsin

Disclaimers I have no disclosures to report Medicare calls the tune, and all others follow Any number of agencies reviewing things

What do these people have in common? An 85yo man found in a hoarder-type situation, with mild confusion A 73yo woman with COPD, new SOB, and diffuse wheezes, satting 91% on room air A 79yo man with a low-trauma pubic ramus fracture to be managed non-operatively None of them meet inpatient criteria!

Why This is Important Patients strongly affected by all of this Access to benefits Disposition options Disposition pressures Changes in billing Financial issues are large and permanent Clinical and financial bottom lines matter Institutions need to be healthy to help patients! This is a general medical problem! ~25% of all FM/GMED patients are OBS; 25% stay >48hrs Costs hospital $33/hr per patient

Objectives Introduction and Definitions: Inpatient Observation (OBS) Interqual Recovery Audit Contractors (RAC) and Medical Necessity (MN) How to Navigate Observation Status in 2012

Inpatient versus Observation and Interqual

Medicare 101 Medicare for Inpatients: Part A pays for inpatient services with one annual deductible ($1156 in 2012), further coinsurance Part B pays for doctor services, some meds, DME, with an annual deductible and an episodic 20% copay SNF benefit after 3 day prequalifying stay Medicare for Outpatients: No Part A benefit Part B pays as above No SNF benefit

Medicare 102 Diagnosis-related group (DRG) is how we get paid Established in early 1980s, to reward systems caring for sicker, more complex patients Diagnosis and comorbidities considered Facility gets a lump sum for all care based on the DRG DRG determined by diagnosis, documentation Note: Medicare sets the course, everyone else follows

Inpatient versus Observation Observation status created in early 1980s as a temporizing, money-saving measure Definition: a well-defined set of specific appropriate services include ongoing short term treatment, assessment, and reassessment furnished while a decision is being made Timing: In the majority of cases decision to discharge or to admit can be made in less than 48 hours in only rare and exceptional cases do reasonable and necessary outpatient observation services span more than 48 hours.

Inpatient versus Observation Intended for patients who probably need monitoring rather than a full admission Initially only CP, CHF, asthma; extended to any diagnosis in 2008 Includes OSS patients Nothing to do with physical location--obs is outpatient! Criteria somewhat arbitrary and don t necessarily fit best medical practice At UWHC, 67.5% of OBS stay over 24hrs; 26.4% over 48hrs

Inpatient versus Observation: InterQual The Gold Standard in Evidence-Based Clinical Decision Support Used by CMS, 3700 Hospitals, 300 Health Plans, the military, others Originated due to demands created by birth of Medicare and Medicaid; these programs led to guidelines, which were very subjective and not evenly applied InterQual is a checklist Physician judgment can trump guidelines if the judgment portion/documentation is clear

Inpatient versus Observation: Checklist UGIB: observation if: Has melena or positive gastric lavage HGB >8.3, PLT >60K, gets PPI, EGD confirms No blood/fluids administered UGIB: inpatient if: Has hematemesis, melena, or positive lavage and Either HGB <8.3, or PLT <60K or >1000K and Gets IVF/blood, PPI, HGB q8h, EGD

Inpatient versus Observation: Practical Points In practical use, some conditions are almost always observation Examples: syncope, any pain, failure to thrive, rule outs, outpatient surgeries, etc Reviewers are paying particularly close attention to: These diagnoses/mismatches Extremes of LOS, short or long Status changes

Inpatient versus Observation: Practical Points Days do matter, and a proper status needs to be in place as soon as possible We can t bill for services until the proper status order is written Changes patient s bill and benefits dramatically Early management of patient expectations This all plays into the bottom line, financially and in terms of clinical ratings The 23-hour rule is irrelevant

Recovery Audit Contractors (RAC) and Medical Necessity

On the RAC A limited Medicare audit intended to prevent fraud for inappropriate inpatient billings was performed from 2005-08 Identified $1.03 billion in improper payments 96% were overpayments recollected from providers Audits permanent in 2006, nationwide in 2010 Recovery Audit Contractors private companies paid on contingency 10/2009-9/2012: $3.16 billion in overpayments collected

RAC Audits UW Policy: all charts reviewed at admission for appropriate status (utilization review or UR) RAC gets ~400 closed charts every ~45 days; we prescreen submissions Submitted charts are reviewed/possibly denied by RAC Some charts reviewed for coding (correct DRG), some for medical necessity of services provided (MN) Vast majority of our denials are for MN Denials can be appealed; multiple levels with strict deadlines No reimbursement collected on final denials

Medical Necessity Medicare pays for reasonable and necessary interventions, which they define Meets standard of care, is clinically appropriate, and not for benefit or convenience of payer, patient, provider Does not have to pay for interventions deemed neither reasonable nor necessary Establishes policies that determine payment status Reviews individual cases after the fact

Medical Necessity A test may be appropriate, but not necessary MN relates more to setting of service than to need for service Common denial reasons: Lack of supporting documentation Pre-existing conditions Lack of preauthorization Interventions deemed experimental

Medical Necessity Example: transplant workup in a stable person with cirrhosis admitted for chest pain evaluation Example: diagnostic guaiac in a GI bleed coded as colon CA screening Example: any lab fishing expeditions Outpatient clinics are liable to MN denials too; focus is on inpatient as largest fraction/easy target

How to Navigate Observation Status

Document, document, document! Make your rationale clear to auditors Document what you have tried, what you re worried about, what s going on Appropriate diagnoses and documentation significantly effect the patient s and the hospital s clinical and financial bottom lines (CMI, SOI, mortality) Never embellish, exaggerate, or document something you didn t do!

Medicare Benefit Policy Manual, 1:10 The decision to admit a patient is a complex medical judgment which can only be made after the physician has considered a number of factors admissions are not covered or noncovered solely on the basis of the length of time the patient actually spends in the hospital.

Examples If you don t explicitly state something, it can t be inferred Document things like: Short-term risk of death Complexity of decision-making Patient s comorbidities Tolerances for specific fluid rates, med doses, etc Why this can t be done in an ideal clinic setting Auditors are looking at H&P, DC summary so make these documents comprehensive!

Examples S: Knee pain O: Knee pain A: Knee pain P: Knee replacement: denied! Patient established care for knee pain due to OA 18 months ago. At that time, a trial of NSAIDS and APAP for 6 months produced no benefit. Three intraarticular steroid injections produced no relief, nor did six months of physical therapy. Thus, arthroplasty is indicated. Admit to OBS for rule out MI : a nightmare! While the ECG and biomarkers are normal, her risk factors of smoking and diabetes suggest a high risk of cardiac chest pain. I am concerned about the short-term risk of death from ACS. Thus, further urgent evaluation is warranted.

Examples Identify all the diseases patient has on arrival NOT chronic issues, per home management Don t say rule out, non-cardiac, ACS as diagnoses Attribute when you can! SIRS + (suspected/likely) infection = sepsis Urosepsis = UTI, so DO NOT say urosepsis Avoid abbreviations AMAP It is OK to be wrong as long as you re reasonable!

Same patient, different documentation 75yom with CHF presents with pneumonia: MS-DRG 195, simple pneumonia without CC/MCC; $3757 75yom with CHF presents with aspiration PNA: MS-DRG 179, complex PNA w/o CC/MCC; $6173 75yom with aspiration PNA, secondary systolic HF: MS- DRG 178, complex PNA with CC; $9241 75yom with aspiration PNA, acute on chronic systolic heart failure: MS-DRG 177, complex PNA with MCC; $13,359

So, what now? I always err on patient s side Observation status here to stay for now OIG looking at abuse of OBS status If you aren t sure, it is probably observation Document all the details! Will complexity arguments hold up? TBD The rules (or at least interpretation and enforcement) will change again Lawsuits about OBS, change in 3-day stay rules, Congress starting to hear more about it

References www.medicare.gov InterQual criteria www.mckesson.com Wikipedia Edelberg, C. Getting Paid for ED Services: Keys to Documenting Medical Necessity. PowerPoint presentation, Progressive Healthcare Conferences, Jan 6, 2010. Mitus, J. The Birth of InterQual: Evidence-Based Decision Support Criteria That Helped Change Healthcare. Professional Case Management. Vol. 13, No. 4, 228 233. Genensway, D. How observation care is complicating life for you and your patients. Today s Hospitalist. Feb 2012, 26-30. http://www.medicare.gov/publications/pubs/pdf/11435.pdf http://www.aha.org/advocacy-issues/rac/index.shtml 9 th World Congress Physician Advisor; various presentations Feng et al. Health Affairs 2012