RAC Risk Areas: Hospital Patient Status

1. RAC Risk Areas:Hospital Patient Status Robert D. Stone, Esq. Alston & Bird LLP Georgia Hospital Association July 15, 2010

2. “In all we do, we must remember that the best health care decisions are made not by government and insurance companies, but by patients and their doctors.”George W. Bush, State of the Union Address

3. Increased Payor Scrutiny • “Hospitals, insurers battle over downcoding of patient stays” (The Intelligencer, July 6, 2010) • “Unashamedly, one of our efforts is to promote more efficient care. No one is saying don’t be careful, don’t take the appropriate precautions. It’s about how do you appropriate pay for that resource, that amount of care that is being rendered.” Don Liss – Independence Blue Cross, Senior Medical Director.

4. Agenda • Physician’s role in determining patient status • Recent enforcement actions • Clinical risk areas related to patient status • Medicare rules and the use of Condition Code 44 • The Case Management Assignment Protocol (CMAP) – History & current options

5. The Problem • Correctly assigning patient status to avoid: • Short Stay denials • False Claims allegations • Inappropriate use of “observation” services • Compromising SNF coverage • Condition Code 44 “Trap”

6. Medical Necessity: The Treating Physician’s Primary Role • The patient’s treating physician is responsible for determining whether a Medicare beneficiary needs to be admitted to a hospital. • “The physician or other practitioner responsible for a patient’s care at the hospital is also responsible for deciding whether the patient should be admitted as an inpatient.” MBPM Ch. 1 § 10.

7. Only A Doctor Can Legally Admit Patients to Hospitals • Generally, under state law, only physicians can order the inpatient admission of a patient. Nurses (including care managers) are not legally qualified to make that decision, which is outside their “scope of practice.” See, e.g., Georgia Medicaid Hosp. Manual § 901.1 (req. admissions by “licensed doctors”); 42 CFR 482.12(c)(2) (“Patients are admitted to the hospital only on a recommendation of a licensed practitioner permitted by the State to admit patients to a hospital.”) • “In no case may a non-physician make a final determination that a patient’s stay is not medically necessary or appropriate.” See Page 217 of the Medicare State Operations Manual, accessible at http://www.cms.hhs.gov/manuals/Downloads/som107.ap_a_hospitals.pdf.

8. Physician’s Judgment • By Medicare policy, the physician should consider the following factors in making a determination whether to admit a patient: • 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; and • The availability of diagnostic procedures at the time. Id.

9. “Complex Medical Judgment” Standard • “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 types of facilities available to inpatients and to outpatients, the hospital’s bylaws and admissions policies, and the relative appropriateness of treatment in each setting.” MBPM Ch. 1 § 10.

10. “Physician’s Expectation” Test • A patient should be considered an inpatient if the patient was admitted based on the physician’s expectation that an inpatient stay is appropriate. LMRP for Acute Care: Inpatient, Observation and Treatment Room Services (L1281) at 4 (January 1, 2005) • “Generally, a patient is considered an inpatient if formally admitted [by a doctor] as an 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.” MBPM Ch. 1 § 10

11. 24-hour Benchmark • While Medicare guidance suggests physicians use a 24-hour benchmark for acute hospital services as a guide, “[a]dmissions of particular patients are not covered or non-covered solely on the basis of the length of time the patient actually spends in the hospital.” MBPM Ch. 1. § 10. • What happens after the decision to admit a patient is made by the treating physician can only be used to substantiate, not refute, the validity of the physician’s decision-making. BCBS LMRP at 5.

12. Common Published Criteria, Like InterQual, Recognize That A Physician’s Clinical Judgment Governs • “The Criteria reflect clinical interpretations and analyses and cannot alone either resolve medical ambiguities of particular situations or provide the sole basis for definitive decisions. The Criteria are intended solely for use as screening guidelines with respect to the medical appropriateness of healthcare services and not for final clinical or payment determinations concerning the type or level of medical care provided, or proposed to be provided, to a patient.” InterQual, Acute Criteria Review Process, RP-14 (2005).

13. Multiple Choice: Reimbursement Issue That Has Been Around For More Than A Decade Means: A. The rules aren’t very clear B. There are a lot of judgment calls where reasonable minds can differ C. The “decider” and the “biller” aren’t the same D. The problem often happens late at night, on weekends, holidays or in an “emergency” E. All of the above

14. Multiple Choice: Reimbursement Issue That Has Been Around For More Than A Decade Means: A. The rules aren’t very clear B. There are a lot of judgment calls where reasonable minds can differ C. The “decider” and the “biller” aren’t the same D. The problem often happens late at night, on weekends, holidays or in an “emergency” E. All of the above

15. A Short History Of “Short-stay” Enforcement Issue in OIG Work Plans for at least 10 years Saint Barnabas Case (2005): False Claims Act utilized in patient status case Saint Joseph’s Health System (2007): Qui Tam action brought by a former case manager Areas of Focus 1-day stays “zero-day” stays 3-day inpatient stay with discharge to SNF 2 and 3-day inpatient stay where reimbursement > billed charges ESRD cases where patient missed dialysis due to blocked access sites

16. Government Enforcement and Short-Stay Admissions: US ex rel. Ramsey v. Saint Joseph’s • Qui Tam action brought by former case manager who was employed only for a few months • Relator’s complaint based largely on anecdotal case stories • Case ultimately based upon large statistical analyses • Case evidences areas of particular risk

17. Other Enforcement Cases Khyphoplasty Cases: Medtronic Spine (2008), HealthEast Care System (2009) Yale-New Haven: procedure-related admissions (2009) Wheaton Community Hospital (2010): medically unnecessary admissions RAC Program QIO Initiatives

18. Areas of Risk Chest Pain and Cardiac DRGs Payments Exceeding Charges SNF Discharges ER Point of Entry Cases Cases related to patients presenting after outpatient tests or procedures Dialysis

19. The False Claims Act and Short-Stay Admissions “Knowledge” Factors Hospital Audits (or lack thereof) and Work Plan/Corrective Action Education of Medical Staff and Case Management Staff PEPPER Reports Administration Response to Feedback from Case Management Administrative Reports and Internal Data (Average Length of Stay, for example)

20. Auditing Patient Status Issues Inpatient Admission Coverage Criteria Observation Services Coverage Criteria Condition Code 44 Hospital UR Condition of Participation

21. Causes of Patient Status Errors Differences of opinion (medical necessity) Medical record documentation issues Unclear orders Unclear supporting documentation Timing of orders/authentication/ implementation

22. Medicare Rules (very simplified) Admission Following Observation Effective at time of the admitting order After Inpatient Admission Unless Condition Code 44 No APC billing, even if Admission is denied “Part B only” services

23. CMS Physician Order Interpretations “Admit” = Inpatient “Admit as inpatient” = Inpatient “Admit for observation” = Inpatient “Admit to observation” = Outpatient “Place in observation” = Outpatient “Admit to Case Management Protocol” = None

24. “Condition Code 44” Criteria Admission does not meet inpatient criteria By 1 UR Committee member and the attending physician Decision documented in medical record Changed before discharge and any billing

25. Condition Code 44 – CMS Views No substitute for utilization management staffing or continued medical staff education “[T]he need for hospitals to correct inappropriate admissions and to report condition code 44 should become increasingly rare.”

26. 42 C.F.R. § 482.30/Utilization Review Committee • Defines the process for hospital determination that an “admission . . . is not medically necessary.” • Consultation with treating physician or opportunity for treating physician to be heard is required • Physician members of UR Committee have power to change status • 3 Notifications Required when patient status changes • Condition Code 44 distinguished

27. Case Management Assignment Protocols “Florida Protocol” Case Management Assignment Protocol (CMAP) Standardized decision making process Individual or standing orders to UR personnel Assign status using recognized criteria

28. Case Management Assignment Protocol Physician determines need for hospital care Orders: “Admit to CMAP” “Hold” status (e.g., 2, 6, 12 hours) Default to Outpatient (Observation) If assigned Observation, physician re-evaluates within 24-48 hours for inpatient admission or discharge

29. Simplified CMAP Flow Diagram Physician Orders “Admit to Case Management Protocol” Outpatient /Observation Service Physician Re-evaluates Admitting Status Hold Case Management Assigns Status Inpatient Service Discharge

30. Summary of CMAP Demonstration Project • Involved 16 hospitals in six western states • Only 35% of the records reviewed at the end of the project had evidence of use of the CMAP – but still showed measurable results overall • Variability in implementation of the protocol • Percentage of unnecessary short stays admissions decreased from 26.4% to 12.4% • Overall, the rate of short stays remained the same or increased for most hospitals

31. Lessons Learned from the CMAP Demonstration Project • Use of CMAP resulted in reduction in denial rates but NOT in short stays. • Shift from longer IP admission to observation status + short stay. • More accurate • Less expensive for CMS • Focus on decrease in denial rates notdecrease in short stays • Possible nurse staffing issues with observation units • Training in use of protocol • Need to identify missed billing opportunities, particularly in the ED (may require additional training) • Need for a physician champion

32. Lessons Learned, cont’d. • Mandatory versus optional • Case management staffing issues • Improved accuracy on front-end may reduce costs involved in appealing denials • Indirect benefits from use (or even attempted use) of protocol • Increased communication • Increased feedback • Increased sensitivity to patient status issues • Opportunities for education related to status issues • After initial resistance, physicians relieved to have case managers with expertise available • Suggests opportunities for improvement exist, even without full implementation of CMAP

33. Apparent CMS Concerns about CMAP • “Removes physician from the process” • The physician . . . responsible for a patient's care at the hospital is also responsible for deciding whether the patient should be admitted as an inpatient • But does it really? • Patient’s physician determined need for hospital • Medical staff physicians selected criteria

34. Apparent CMS Concerns about CMAP • “Defaulting to observation” (i.e., outpatient) • “General standing orders for observation services following all outpatient surgery are not recognized.” • Long-standing distrust of “standing orders” • But see Memo to State Survey Agency Directors re: “Standing Orders” in Hospitals (Oct. 24, 2008)

35. Why Isn’t Everyone Using CMAP? NOT yet CMS approved CMS position re “Admit to CMAP” orders Standing or patient-specific Supports neither Inpatient Admission nor Outpatient Observation MACs cannot approve proposed CMAPs

36. Modified Case Management Approach • No standing orders • No default to Outpatient/Observation • Case management reviews/recommends • Provides recommendation to physician • Requires separate order accepting the recommendation after it is made • Written signoff or properly noted telephone order should be sufficient

37. Problems With Modified Approach • Additional Expense • Physician hassle factor • Having to sign twice • Delay – • Time before the second order does not count • 8 hour minimum for Observation • 3 day Inpatient stay for SNF coverage

38. Current CMAP Conclusions • Sooner or later RACs will audit • CMAP actually works • Nevertheless, not CMS approved • Reliance on CMAP could lead to 100% denials • No orders for services • Modified CMAP approach may help

39. Saint Joseph’s Response: Systems Improvement • Proactive Response to Strengthen Case Management • Training • Mandatory Credentialing • Independent Review of Performance • Addition of Physician Advisor • Strengthening of UR Committee Function and Performance • Administration Support • Compliance Program Involvement

40. Saint Joseph’s Response: A Unique CIA • HHS-OIG approves use of “Admit to Case Management Protocol” as part of CIA • First case authorizing protocol by CIA • Outside of 6-state pilot • Allows Case Management Involvement with Physician at Front End of Process • Physician must still order status • Status held until consultation

41. Questions

42. RAC Risk Areas:Hospital Patient Status Robert D. Stone, Esq. Alston & Bird LLP Georgia Hospital Association July 15, 2010