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 _2

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

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

4 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

5 Non-RAC Reasons to Document Correctly December, 2007 –St. Josephs 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, Minnesotas QIO State False Claims Act Quality of Care

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

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

8 Medicare Criteria for Inpatient Admissions Medicare Benefit Policy Manual, ch. 1, § 10 –24-hour benchmark –Complex medical judgment Patients 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

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

10 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

11 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.

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

13 Small Hospital Process Phillips Eye Institute – the Midwests 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

14 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

15 Small Hospital Process Action Steps –Medical Staff Quality Improvement and Credentialing Committee reviewed the hospitals utilization review criteria – significant debate –Considered InterQual criteria –Modified hospitals 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

16 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

17 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 Medicares 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

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

19 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

20 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 Minnesotas Fiscal Intermediary

21 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

22 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 patients status Coders also review for orders before bill drops

23 Large Hospital Process Effect of Changes –New relationship between nurses, physicians, and physician advisors Similar to relationship between coders and physicians Dont need to understand all of the Medicare rules, but need to know how to document –Care? –Revenue Cycle Improvement –Confidence going into RAC Audits

24 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

25 QUESTIONS? Steve Lokensgard (612) David Orbuch (612)

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