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

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

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

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

Outpatient? Inpatient? Outpatient Observation Inpatient

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

IP OP - What’s the Difference? Outpatient Inpatient 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 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

Inpatient Status Basics Certify MN of IP Admit to Inpatient Expect 2 MN LOS

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…

Admit to Inpatient Admit to Inpatient Order Admit to Inpatient 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

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)

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)

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

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

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

Primary Care Practitioner Who Has Knowledge? Practitioner must have sufficient knowledge about the patient’s hospital course, plan of care, and current condition- such as: Knowledge Attending Hospitalist Primary Care Practitioner Surgeon ER Practitioner

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.

Admit to Inpatient Order 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) OP OP OP Admit to Inpatient Order OP IP

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)

But it Doesn’t Say Inpatient 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)

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

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

Observation to Inpatient Triage - ED Observation Admit to Inpatient Discharge One Midnight Two Midnights 10:00 PM 8:00 AM 9:00 PM 10:00 AM outpatient inpatient Begin counting time when care begins – regardless of location

Observation to Inpatient One Midnight Two Midnights Three Midnights ED Admit to Observation Admit to IP Inpatient Discharge Monday Tuesday Tuesday Wednesday Thursday 10:00 PM 8:00 AM 9:00 PM All Day 7:00 AM Doesn’t qualify for SNF: only two inpatient days - after admit order

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

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

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

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

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

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

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

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

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

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

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

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

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)

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…

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)

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

Questions

Thank You

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

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