As CMS’ audit program evolves, it’s crucial for hospitals to prevent denials on the front end, says Elizabeth Lamkin, MHA, chief executive officer and partner in PACE Healthcare Consulting, LLC, based in Bluffton, SC.
“The real key for hospitals is to focus their efforts on the front end and review every patient at every point of entry. It won’t prevent all denials but it will go a long way toward helping the hospital comply,” she says.
Lamkin strongly recommends that hospitals use an evidence-based criteria set to help them determine if a patient’s admission would be medically necessary.
“CMS does not acknowledge any one criteria set but by using criteria, hospitals have a fighting chance of avoiding denials,” she says.
In this new environment, it is even more important for hospitals to get patient status right up front, adds Steven Greenspan, JD, LLM, vice president of regulatory affairs for Executive Health Resources, a Newtown Square, PA, healthcare consulting firm.
“Right now, the quality improvement organizations [QIOs] are looking at a small sample of cases and they can refer hospitals with a pattern of denials to the Recovery Auditors [RAs]. When the RAs get a referral, they can review many more claims than the QIO, subject only to the hospital’s limit for additional documentation requests, but the RA also can ask for permission from CMS to raise the limits,” Greenspan says.
Hospitals need to have adequate case management staff that can review patients at every point of access and guide physicians on what their status should be, Lamkin says.
In addition to reviewing the cases of Medicare patients, case managers also need to make sure that the hospital meets the requirements of private payers. “A lot of Medicare Advantage payers are not necessarily adhering to CMS rules. Now case managers have an additional burden to ensure that utilization review is completed for patients covered by private payers and that all payers are following appropriate rules and adhering to their contracts,” Lamkin says.
Lamkin recommends caseloads of 18 or fewer patients so case managers can have the time to complete all their tasks and do them well. She recommends that case management directors track case manager screenings and continued stay reviews compared to rates of denials and financial penalties to demonstrate the case manager effect on the reduction in denials and use the data when making the case for more staff.
Since many patients come in from the emergency department, it is essential for hospitals to have case managers stationed there, she says.
Hospitals don’t necessarily have to have case managers dedicated to other points of access, but instead could create the position of admissions case manager who does nothing but review admissions, she adds. Set up a system so the admissions case manager is alerted when admissions come from the surgical department, catheterization lab, and other procedural areas, she suggests.
Lamkin also recommends putting a review nurse in the admissions department to make sure the documentation in the record supports an inpatient admission. “One of the steps in the admission process should be to make sure the record contains the information necessary to meet medical necessity criteria,” she says.
The main reason for denials so far has been lack of adequate documentation, Greenspan says.
“The documentation should tell the story of why this particular patient is receiving this particular treatment, and why it’s appropriate for the patient to receive these services in an acute care hospital,” he says.
“There is still a lot of misunderstanding out there regarding appropriate use of observation as compared to inpatient admissions, and clinical documentation pertinent to the need for acute services never has been more essential to the justification,” says Donna Hopkins, MS, RN, CMAC, vice president at Novia Strategies, a national healthcare consulting firm.
Hospital case managers have to stay on top of every patient — particularly those who have short stays — and patients in observation, Hopkins says. “For those who are admitted, the question at the second midnight is the need for services that can be delivered only in a hospital setting. That need has to be documented and cannot be due to system, provider, or patient convenience,” she adds.
In the 2016 Outpatient Prospective Payment System (OPPS) final rule, CMS modified the controversial two-midnight rule to allow shorter stays to be billed as inpatient stays based on the physician judgment, but they did not cite any examples to give guidance to hospitals, leaving a lot of providers confused, Lamkin says.
Many hospitals are still erring on the side of observation due to the lack of clarity and interpretations of the two-midnight rule and the possibility of audits, Hopkins says. “Until hospitals are able to provide services — such as cardiac and gastrointestinal procedures — seven days a week and until providers document accordingly, observation rates are still going to be high,” she says.
As CMS’ audit program evolves, it’s crucial for hospitals to prevent denials on the front end.
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