Understanding Medicare Reimbursement and Inpatient Services in Short Stay Acute Care Facilities
Short stay acute care facilities, also known as hospitals, play a critical role in delivering inpatient and outpatient services to patients. Understanding Medicare reimbursement policies, such as billing for Medicare Part A (IPPS) for inpatient services and Medicare Part B (OPPS) for outpatient services, is essential for hospitals to ensure proper billing practices. Clear documentation and verification of medical necessity for inpatient stays are crucial to avoid scrutiny. This overview sheds light on the complexities of CMS reimbursement and inpatient care guidelines in the healthcare setting.
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Clinical Documentation Improvement (CDI)
Short Stay Acute Care Facilities Traditionally known as hospitals Can offer a variety of services by order of a credentialed physician/provider who has privileges at the facility inpatient outpatient
Short Stay Acute Care Facilities Hospitals that accept CMS beneficiaries agree to inpatient care reimbursement under the Inpatient Prospective Payment System (IPPS) and outpatient care reimbursement under the Outpatient Prospective Payment System (OPPS)
Medicare Reimbursement It is the responsibility of the hospital to know when to bill Medicare Part A (IPPS) for inpatient services and when to bill Medicare Part B (OPPS) for outpatient services HOWEVER the hospital can only bill CMS (Medicare/Medicaid) based on the services ordered by the physician
Inpatient Services Traditionally referred to as an admission or Admit to Most patients who spend the night in the hospital believe they are admitted However, spending the night in the hospital does not automatically qualify for inpatient services
Inpatient Services Uses a day as its basic unit Day begins at midnight Any part of a day = 1 day Patient admitted at 11:30 pm = 1 day Count first day of admission but not last day Discharge patients as early as possible the day of discharge Time of discharge are when services are complete not when the order is written
The Good and Bad of IPPS Inpatient services are only a covered CMS benefit when medically necessary e.g., when the services could not have been safely provided in a lesser setting Hospitals must verify the medical necessity of all inpatient stays/ episodes of care Short stay admissions are vulnerable to scrutiny
The Good and Bad of IPPS The IPPS uses a bundled payment system differentiated by MS-DRG The MS-DRG payment covers all services rendered by the hospital during an inpatient stay regardless of the length of stay* (LOS)
IPPS Payment The bulk of the cost associated with an inpatient stay is room & board unless there are multiple tests or certain procedures required. CMS bases reimbursement on the G/LOS 95% confidence interval for LOS based on all associated claims Always rounded up to whole number as inpatient claims are paid per day
RAC Audits The IPPS (MS-DRG) payment includes coverage for several days of tx, the potential for overpayment occurs when IPPS payment is made for a 1 or 2 day stay Theoretical . . . if a patient is discharged in fewer days than the associated GLOS the hospital makes $ if a patient stays longer than the associated GLOS the hospital loses $
High Risk Admission DRG Hospital A will receive payment of $6,094 regardless of the services provided and how long the patient stayed in the hospital under the IPPS rules When patients in MS-DRGs like this have a one-day inpatient stay CMS evaluates the possibility of overpayment IPPS payment rather than OPPS payment
Purpose of Utilization Review (UR) To ensure patients are receiving the correct level of hospital services based on medical necessity Procedure Only/same day surgery Observation/Outpatient services Inpatient services Billing at the incorrect level of care is considered Medicare fraud which helps to ensure a hospital does not bill for services that don t meet medical necessity
Step Two What type of hospital service was ordered by the provider? Inpatient Appropriate for hemodynamic instability Patients who need immediate intervention/tx Observation When in doubt this is probably the right level of care Appropriate for stable patients with negative diagnostics who are receiving additional diagnostics
Is the Order Valid per CMS Guidelines? Not only must an order be present, but it must be unambiguous admit to OBS is no longer considered a valid order by Medicare as of April, 2009 The term admit = inpatient setting The term OBS = outpatient setting
Two Midnight Rule The Two-Midnight Rule from CMS notes that inpatient admissions generally would be payable if all of the following conditions apply. The admitting practitioner orders inpatient status At the time of admission they expected the patient to require a hospital stay that included two midnights The record supports this expectation
Is the Order Valid? The term 23 hours admission is NOT valid 23 hour observation is an antiquated term An inpatient admission is billed per day, a patient can be an inpatient AND remain hospitalized for less than 24 hours Observation patients DON T automatically rollover to inpatient status after 23 hours the physician must write a new order to cover care past the 23rdhour
Step Three In order to verify medical necessity, CMS mandates the use of a screening tool UR staff screen for medical necessity by performing an admission review Is the ordered level of care supported by documentation in the medical record?
Observation Following Surgery/Procedure Requires medical necessity validation Observation is only justified if something occurs during the procedure and/or during recovery to necessitate an additional episode of care Require 4-6 hours of recovery monitoring does not justify observation care The observation principal diagnosis isn t the same as that to justify surgery
How Do You Justify Patient Status? Document, document, document Not only does a hospital need justification for the patient status, BUT the hospital is also dependent upon physician documentation for their CMS Quality Indicators and reimbursement
Documentation Basics Observation care is for diagnostic workup so inpatients should have evidence of a concerning disease process to be admitted. Always provide the underlying etiology of a symptom i.e., chest pain, syncope, abdominal pain, documented in the H&P in the discharge summary A diagnosis can be possible or probable in the discharge summary if additional evaluation will occur in the outpatient setting
History and Physical Specify in your history of present illness the following: Onset of the new/ acute symptom Is it an exacerbation of a chronic condition How is the patient s current condition different from baseline?
History & Physical Specify the current status of all co-morbid conditions State if resolved History of pneumonia dx by PCP resolved Remains acute History of pneumonia dx by PCP remains acute Is a chronic condition
Coding Guidelines The principal diagnosis is the condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital Not the admitting symptom Link the symptoms to the underlying disease process Fluid volume overload 2/2 ESRD
Documentation Guidelines Avoid perpetuating the admitting complaint as the Pdx, update your diagnoses each progress note/daily Clearly state when the etiology of the admitted complaint is determined if it s symptomatology was present on admission (POA) Disease processes like pneumonia, and sepsis should always be noted if the symptoms were POA
Documentation Guidelines Clearly state when a differential or working diagnosis is ruled out or confirmed in the progress note and/or discharge summary Unstable angina secondary to CAD remains likely cause of the CP Pneumonia ruled out, abx stopped
Documentation Guidelines There can still be evidence of a disease based on presenting complaints even when not confirmed with diagnostics Aborted stroke 2/2 TPA intervention Evidence of gram negative pneumonia (HCAP) 2/2 recent hospitalization and dialysis
The Value of a Concurrent Condition Medicare identifies diagnoses (by ICD-10 codes) that require additional resources during hospitalization when not intrinsic to the PDx These diagnoses are separated into those that minimally resource use (CC) and those that greatly resource use (MCC), and this stratification creates the tiers
What is The Clinical Documentation Improvement (CDI) Program? Because clinical terms don t often correspond to ICD-10 codes, many hospitals have a CDI program. The CDI staff work collaboratively with providers and coders to bridge the gap between the data contained in the medical record i.e., test results, nurses notes, consultant notes, etc., and what is available for coding.
How Does CDI Work? The CDI professional establishes and updates a working MS-DRG based on the principal diagnosis, principal procedure (if applicable), and any concurrent conditions that are classified as a CC or MCC based on documentation by treating providers i.e., H&P, progress notes, discharge summary, etc.
Chart Queries Whenever there is clinical evidence suggestive of a more definitive Pdx and/or the presences of an incomplete or missing diagnosis, i.e., a potential CC and/or MCC, the CDI specialist will query the physician to interpret the clinical evidence. NOTE: Queries aren t only to reimbursement. They help most accurately reflect the patient s severity of illness and risk of mortality.
Chart Queries As with direct patient care, the CDI professional presents relevant findings to the physician for review CDI staff don t evaluate the quality of care The focus of CDI is ensuring provider documentation reflects the clinical evidence in the medical record and can be captured by ICD-10 codes
Chart Queries CDI staff are not allowed to lead a physician to a particular response CDI staff can t tell you what diagnosis to write When possible, CDI staff will give the provider the diagnosis commonly associated with the clinical evidence that can be captured by ICD- 10 code
Chart Queries Coders can t infer or assume so sometimes CDI staff must ask for documentation that seems obvious to the provider and/or to link a symptom to a diagnosis A provider can always disagree or state the condition isn t clinically significant or is an incidental finding
Reminders Provide rationales/medical necessity for all orders justify the complexity of your patient Refer to the H & P to address ALL presenting signs/symptoms with known, suspected or possible diagnoses State when a differential dx has been confirmed or ruled out
