Getting it Right the First Time: Documentation of Medical Necessity for Short Stay Patients

Getting it Right the First Time: Documentation of Medical Necessity for Short Stay Patients Steve Lokensgard Special Counsel Faegre & Benson David Orbuch President Phillips Eye Institute fb.us.3575960_2

AGENDA • The Need to Get This Right! • Medicare Criteria for Inpatient Admissions • Process for Small Hospitals • Process for Large Hospitals or Health Systems

The RAC Demonstration • Top Services with RAC-Initiated Overpayment Collections • Treatment in wrong setting for: • Surgical procedures $88 million • Cardiac defibrillator implants $64.7 million • Heart failure and shock $33.1 million • Wrong setting means the patient could have been treated on an outpatient basis • Accounts for almost 20% of the RAC overpayments

Non-RAC Reasons to Document Correctly • December, 2007 • St. Joseph’s Hospital pays $26 million to the federal government to settle a qui tam lawsuit involving short stays not medically necessary • June, 2008 • 75% of one-day stays for chest pain in the State of Minnesota were not medically necessary and could have been treated on an outpatient basis according to Stratis Health, Minnesota’s QIO • State False Claims Act • Quality of Care

Medicare Criteria for Inpatient Admissions • No magic language to document “Neither the statute nor any applicable regulation defines “inpatient.” CMS’s policy manual defines an inpatient as a person who has been formally admitted to a hospital.” • Landers v. Leavitt, 545 F.3rd 98 (2nd Cir., 2009)(emphasis added)(referring to the Medicare Benefit Policy Manual)

Medicare Criteria for Inpatient Admissions • Medicare Benefit Policy Manual, ch. 1, § 10 • 24-hour benchmark • Complex medical judgment • Patient’s history and current medical needs • Severity of signs and symptoms exhibited by patient • Medical predictability of something adverse to happen • Need for outpatient diagnostic studies to assist in assessing whether the patient should be admitted • The availability of diagnostic procedures where the patient presents

Medicare Criteria for Inpatient Admissions • Medicare Benefit Policy Manual, ch. 1, § 10 • Types of facilities available to inpatients and outpatients • Hospital’s by-laws and admission policies • Relative appropriateness of treatment in each setting

Medicare Criteria for Inpatient Admissions • CMS Ruling 95-1 • Medicare contractors must act in accordance with Medicare statutes, regulations, national coverage instructions, accepted standards of medical practice and CMS rulings • Accepted standards of medical practice: • Published medical literature • A consensus of expert medical opinion • Consultations with their medical staff, medical associations, including local medical societies, and other health experts

CMS Recommended Best Practice • Hospital Payment Monitoring Program Compliance Workbook • Physicians should adopt screening criteria that can be used by Utilization Management Staff (e.g. InterQual, Milliman) • Cases failing screening criteria should be referred to physicians for review • The ultimate decision to admit must be made by a physician, “either through the use of physician approved or developed criteria, or through a physician advisor.”

Small Hospital Process • Phillips Eye Institute – the Midwest’s only Specialty Eye Hospital • Serving over 16,000 patients per year • Significant Medicare patients • 350 inpatient admissions per year (dropping every year) • 170 Physicians on the Medical Staff (non-employed model) • 180 employees • Significant changes in opthalmology practices over last 10 years • Recent implementation of electronic medical record

Small Hospital Process • Mock Joint Commission Audit in 2004 • Raised concerns about the documented medical necessity of inpatient stays • Some records lacked a clear order for admission

Small Hospital Process • Action Steps • Medical Staff Quality Improvement and Credentialing Committee reviewed the hospital’s utilization review criteria – significant debate • Considered InterQual criteria • Modified hospital’s Admission Standards in August, 2005 • Educated physicians and nurses on standards • Developed order sets and documentation tools • Encouraged communication among treatment team • Monitored documentation of admissions

Small Hospital Process • Effect of changes • Resulted in a better understanding of the need for documentation • Impact on care to patient population • Change in nurse/ doctor relationship

Small Hospital Process • Western Integrity Center (WIC) Audit in 2005 • A Medicare Program Safeguard Contractor • RAC Like – WIC used data mining and found a high percentage of admissions following procedures not on Medicare’s inpatient-only list • Reviewed a sample of claims from period prior to changes • Identified same issues we had identified • Took comfort in knowing that we had already fixed the issues identified in the audit, and limited future exposure • Payment made to Medicare

Large Hospital Process • Action Steps • Educate physicians • Article on inpatient v. observation delivered to every physician on medical staff • Clarity around documenting admission orders • Classes for hospitalists and ED physicians • Retroactive Monitoring • Applied InterQual criteria • Spike in observation cases

Large Hospital Process • Action Steps • Considered Admit-to-Case-Management Protocol • Scott & White Memorial Hospital in Temple, Texas • MetaStar, Inc. study in the Wisconsin Medical Journal • Not accepted as a valid admission order by Minnesota’s Fiscal Intermediary

Large Hospital Process • Action Steps • Concurrent Admission Review Process • Designated nurses perform concurrent review of admissions and observation cases 7 days per week, 16 hours per day • Goal: review between 12 and 24 hours • If case fails InterQual, refer to a physician advisor • Physician advisor provides advice on admission v. observation • Will call admitting physician if necessary to ask questions about what was documented

Large Hospital Process • Action Steps • Orders • Order sets in Electronic Medical Record revised • Two designated HUCs check regularly for orders and ensure that admission review process was followed • Two HUCs – only people authorized to change a patient’s status • Coders also review for orders before bill drops

Large Hospital Process • Effect of Changes • New relationship between nurses, physicians, and physician advisors • Similar to relationship between coders and physicians • Don’t need to understand all of the Medicare rules, but need to know how to document • Care? • Revenue Cycle Improvement • Confidence going into RAC Audits

Summary • Small Hospital Process • Medical Staff participation • Education • Could be used by departments within large hospitals • Large Hospital Process • Familiarize physicians and staff • Concurrent review of cases • Second-level review by physicians/ physician advisors

Steve Lokensgard (612) 766-8863 David Orbuch (612) 775-8815 • QUESTIONS?

Getting it Right the First Time: Documentation of Medical Necessity for Short Stay Patients Steve Lokensgard Special Counsel Faegre & Benson David Orbuch President Phillips Eye Institute

Getting it Right the First Time: Documentation of Medical Necessity for Short Stay Patients