The ABCs of IPPS

1. The ABCs of IPPS AAPC Virginia Coding Conference October 18, 2013 Jodie R. Caplan Sr. Compliance Consultant Carilion Clinic

2. Agenda • IPPS 2014 Intro • Inpatient – Outpatient: What’s the Difference? • CMS Inpatient Requirements • CMS Inpatient Requirement Exceptions • Audit Expectations • Questions • Regulation References

3. What is 2014 IPPS? IPPS = Inpatient Prospective Payment System • Adjusts payments to hospitals for • Operating Costs • Capital Costs • Graduate Medical Education: direct and indirect • Updates policies relating to the • Hospital Value-Based Purchasing (VBP) Program • Hospital Readmissions Reduction Program • Conditions of participation (CoPs) for hospitals • Administration of vaccines by nursing staff • Provision of acute care inpatient services (CAH) • Payment policies related to patient status:  • Medicare Part B inpatient services • Admission and medical review criteria for Medicare Part A hospital inpatient care

4. Who’s Covered & Beginning When? • All hospitals except Inpatient Rehabilitation Facilities (IRFs) • Began October 1, 2013 NOW!! Psych Acute Care Critical Access

5. Outpatient? Inpatient? • Outpatient • Observation • Inpatient

6. IP OP - What’s the Difference? Outpatient (3) Inpatient (3) Charge for Room, Procedures, Drugs Reimbursement is based on DRGs Patient does not pay for self administered drugs • Charge for Observation, ED, Procedures, Drugs • Reimbursement is more closely related to procedures • Patient pays for all self administered drugs

7. IP OP - What’s the Difference? Outpatient Inpatient Patient pays deductible for hospital stay SNF covered after three day inpatient LOS Can change to OP when patient is in hospital if physician agrees and patient is notified in writing Part A Pays • Patient pays copay for each service • Does not count towards SNF coverage, regardless of LOS • Can change to IP with physician order • Part B Pays

8. Inpatient Status Basics

9. ABCs of an Inpatient? • Admit to inpatient order • Believe when admitted patient’s stay will span two midnights • Certify medical necessity of inpatient stay • Doctor must sign certification • Exceptions: very specific – still require above documentation CMS says…

10. Admit to Inpatient • Admit to Inpatient Order • Order is effective when written • Not when co-signed • Must specify inpatient • Preferred “Admit to Inpatient” • CMS has said that they’ll accept Admit to X unit, Dr. Y’s service, Hospital Z – but documentation will need to be exceedingly clear this is inpatient • Intensity of service doesn’t affect patient status • May have outpatient intensive care service Admit to Inpatient Dr. M. Welby 10/1/13 7:45 AM

11. Order • “The practitioner order contains the instruction that the beneficiary should be formally admitted for hospital inpatient care. The order must specify admission for inpatient services.” (1)

12. Who May Admit? • “The order must be furnished by a physician or other practitioner (“ordering practitioner”) who is (a) licensed by the State to admit inpatients to hospitals, (b) granted privileges by the hospital to admit inpatients to that specific facility, and (c) knowledgeable about the patient’s hospital course, medical plan of care, and current conditions at the time of admission. The ordering practitioner makes the determination of medical necessity for inpatient care and renders the admission decision.” (1)

13. Orders Written Without Admission Privileges “In these cases, the ordering practitioner need not separately record the order to admit…the order (including a verbal order) may be documented by an individual who does not posses these qualifications (such as a physician assistant, resident, or registered nurse)… I want Mr. Bones admitted as an inpatient. OK Dr. Knee, there’s a room on 12E

14. Orders But No Privileges … and must identify the qualified ‘ordering practitioner’ and must be authenticated by the ordering practitioner (or by another practitioner with the required admitting qualifications) prior to discharge.” (1) • Admit to inpatient per Dr. Knee • OK if Dr. Knee qualified to admit and certify admission; Dr. Knee needs to authenticate order

15. Verbal Orders • Initially documented by staff receiving the order • Include identification of ordering practitioner • Must be authenticated by the ordering practitioner or other practitioner with admitting privileges before discharge • Authenticated = signed, dated and timed

16. Who Has Knowledge? Practitioner must have sufficient knowledge about the patient’s hospital course, plan of care, and current condition- such as:

17. Order Timing • “The order must be furnished at or before the time of admission. The order can be written in advance of the formal admission (e.g., for a pre-scheduled surgery), but the inpatient admission does not occur until formal admission by the hospital.” (1) You can’t be an inpatient without an inpatient order.

18. Order Timing “Conversely, in the unusual case in which a patient is formally admitted as an inpatient prior to an order to admit, the inpatient stay should not be considered to commence until the inpatient admission order is documented. Medicare does not permit retroactive order or the inference of orders. Authentication of the order is required prior to discharge and may be performed and documented as part of the physician certification.” (1) Admit to Inpatient Order OP OP OP OP IP

19. Specificity of the Order FY 2014 IPPS Final Rule • “the order must specify the admitting practitioner’s recommendation to admit ‘to inpatient,’ ‘as an inpatient,’ ‘for inpatient services,’ or similar language specifying his or her recommendation for inpatient care.” (1)

20. But it Doesn’t Say Inpatient But… • If inpatient is not specified, the order may be considered appropriate if the intent to admit to inpatient is clear. • Admit to an 7W (inpatient unit) • Admit to Medicine • Admit to Dr. Smith • “if the usage of the order to specify inpatient or outpatient status is ambiguous, the hospital is encouraged to obtain and document clarification from the physician before initial Medicare billing (ideally before the beneficiary is discharged).” (1)

21. Believe Two Midnights Admitting practitioner must believe the patient’s hospital stay will span at least two midnights.

22. Really, Two Midnights? • Two patients with same medical issues – one may be inpatient, one outpatient depending on ED arrival time • 11:00 PM vs. 7:00 AM

23. Observation to Inpatient One Midnight Two Midnights outpatient inpatient Begin counting time when care begins – regardless of location

24. Observation to Inpatient One Midnight Two Midnights Three Midnights Monday Tuesday Tuesday Wednesday Thursday Doesn’t qualify for SNF: only two inpatient days - after admit order

25. Certify Medical Necessity Physician must certify the medical necessity of the inpatient hospital care • Separate form not required • Begins when practitioner’s admit to inpatient order is authenticated • Certification that care is “appropriately provided as inpatient services in accordance with the 2-midnight benchmark under 42 CFR 412.3(e)” (1) Dr. Joint CERTIFIED

26. Doctor Must Certify The only person who may certify inpatient care is medically necessary is the • Physician (doctor of medicine or osteopathy) • Dentist • Doctor of podiatric medicine • Certification must be consistent with functions allowed under State law • Regardless of state admission regulations • Regardless of hospital bylaws • Regardless of who admitted the patient

27. Certification Contents • Authentication of admission order • Signature or countersignature on admission order • Before discharge • Reason for the inpatient services • Diagnosis • Plan of care • Orders

28. Certification Contents • Estimated time required in the hospital • 2-Midnight benchmark • Show continued medical necessity in notes • Discharge planning • Plans for post hospital care • Physician notes • Discharge planning

29. Certification Contents • CAH only – • Reasonable expectation of discharge or transfer to a different hospital within 96 hours of admission to the CAH

30. Exceptions to 2-Midnight LOS Inpatient Only Procedures • Specified by CMS; change periodically • No LOS requirement • Must have admit to inpatient order before the procedure begins • Won’t be paid for inpatient care • Can’t bill as outpatient • Must have physician certification

31. Exceptions Transfers, Leave AMA, Surprise Recovery, Death • Still need admission order and certification • Documentation must show expectation of two midnights – rationale for the length of stay • Explain why the discharge happened sooner than expected

32. Can We Have IP < 2 MN? Inpatient stays that don’t span two midnights - • Not really permitted under IPPS • But, CMS says the decision to admit is based on the physician’s medical decision making – considering patient’s history and condition • Same admit to inpatient and certification requirements • Would still estimate LOS • Documentation clearly explains why care needs to be inpatient • Detail why the care can’t be provided as an outpatient • Expect audits

33. Time Not Counted Time isn’t included to meet the 2 midnight benchmark - • Service not available (weekends, broken) • Staffing shortages • Patient wants to stay • Patient/family convenience CT Scans

34. Changing Status Inpatient to Outpatient – while patient is in the hospital • UM Committee • Physician agreement • Notify patient in writing Outpatient to Inpatient – while patient is in the hospital • Write admit to inpatient order Outpatient to Inpatient – after discharge • No

35. Changing Status Inpatient to Outpatient – after discharge • Bill 1: outpatient charges prior to admission • Bill 2: outpatient charges after admission • Not all charges can be billed • Room • Observation (not ordered because patient was inpatient) • Doesn’t change status • Won’t affect SNF coverage • Timely filing requirements

36. Expect Audits Stays less than 2 midnights after admission order written • Not just stays less than 2 midnights • Stay may span 2 midnights: patient started as outpatient and then admitted after a midnight • May be affected by timing – start in ED as outpatient close to midnight then admitted in AM • MAC (Palmetto) will conduct prepayment audits • 10 to 25 claims per hospital • Admissions 10/1 – 12/31/13

37. Expect Audits Stays less than 2 Midnights • Determine compliance with inpatient regs • No issues identified -> audits stop • Issues identified -> education provided and then follow up audits • Results will be used to develop further education and guidance • Hospitals can rebill denied inpatient claims • “For a period of 90 days, CMS will not permit Recovery Auditors to review inpatient admissions of one midnight or less that begin on or after October 1, 2013.” (2)

38. Expect No Audits? 2 Midnights After Admission Order • “CMS will instruct the Medicare Administrative Contractors (MACs) and Recovery Auditors that they are not to review claims spanning more than two midnights after admission for the determination of whether the inpatient hospital admission and patient status was appropriate.”(2) But, later in the FAQ…

39. Expect No Audits? 2 Midnights After Admission Order • “During the implementation period of October 1, 2013 until December 31, 2013, CMS will instruct the MACs and Recovery Auditors not to review claims spanning more than two midnights after admission for appropriateness of patient status.”(2)

40. Expect No Audits? WARNING from CMS: “If at any time there is evidence of systematic gaming, abuse or delays in the provision of care in an attempt to surpass the 2-midnight presumption could warrant medical review.” (2) AUDIT

41. Questions

42. Thank You

43. Sources • (1) CMS Hospital Inpatient Admission Order and Certification guidance dated September 5, 2013 • (2) CMS Frequently Asked Questions 2 Midnight Inpatient Admission guidance & Patient Reviews for Admissions on or after October 1, 2013 issued September 26, 2013 • (3) CMS Are You a Hospital Inpatient or Outpatient? • CMS 2014 IPPS regulation

44. Link to 2014 IPPS • FY 2014 IPPS – Final Rule Home Page http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2014-IPPS-Final-Rule-Home-Page.html