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 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

7. 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

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

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 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

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. 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

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. 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

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
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
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

24. 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

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

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