ED Coding Update
A closer look at the two-midnight rule, what it means for ED providers
This quarterly column is written by Caral Edelberg, CPC, CPMA, CAC, CCS-P, CHC,President of Edelberg Compliance Associates,Baton Rouge, LA.
Soon we will have the final coding and payment changes for Medicare locked in, so it promises to be a long winter. There are a number of worrisome changes affecting emergency medicine, which we will discuss in future columns. This month we will describe one that will redefine admission criteria and payment for hospital inpatient stays. Effective October 1, the implementation period began for defining hospital admissions as those that cross over two midnights, with specifications for admission that will assure the following are met:
• Admission must be supported by a documented order in the medical record and supported by admission and progress notes. The order for inpatient admission certifies the medical necessity for admission. The order must be provided at the time of or before the time of the admission. If admission for a surgical procedure is not included in the "inpatient only" procedure list, a diagnostic test or any other treatment, the physician must expect the admission to cross over two midnights or it will be deemed inappropriate for admission regardless of the time the patient came to the hospital or the length of time the patient used a bed.
• Appropriateness of admission should be based on: (a) patient history and comorbidities; (b)severity of signs and symptoms; (c) current medical needs and risk of an adverse event. All must be documented in the medical record. If an unforeseen circumstance, such as beneficiary’s death or transfer, results in a shorter stay than the initial expectation of at least two midnights, the patient may be considered appropriately treated. Patients admitted with the expectation of a two-midnight stay that leave against medical advice would still be considered an appropriate admission.
The starting point for the two-midnight benchmark is when the beneficiary is moved from any outpatient area to a bed in the hospital in which additional hospital services are provided. Also to be considered, are factors that may result in an inconvenience to a beneficiary or family, and would not justify an inpatient hospital admission. Admission assumes the factors leading to admit will be based on "clinical expectation, and are significant clinical considerations which must be clearly and completely documented in the medical record."
Timing of the admission may be critical to the appropriateness of the admission. The decision to admit should be based on the cumulative time spent at the hospital, beginning with the initial outpatient service. Thus, if the physician makes the decision to admit after the beneficiary arrived at the hospital and began receiving services, he or she should consider the time already spent receiving those services in estimating the beneficiary’s total expected length of stay.
For example, if the patient has already passed one midnight as an outpatient observation patient or in routine recovery following outpatient surgery, the physicians should consider the two-midnight benchmark met if the patient is expected to require an additional midnight in the hospital. This anticipates that the patient would not spend a second midnight prior to writing the admission order.
Medicare expects this revision to "virtually eliminate the use of extended observation" and to limit beneficiary cost-sharing for outpatient services. Outpatient services often carry higher co-pays than inpatient services, so this rule is expected to reduce patient expenditures. Further, Medicare charges patients for utilization days. A patient who is admitted just before midnight and discharged three hours later is currently charged two utilization days, while the patient admitted just after midnight is charged one day. Medicare believes that the two-midnight concept will simplify the concept for its beneficiaries in assessing the appropriateness of their status, coverage, and the impact.
Condition Code 44
When a patient status is changed from inpatient to outpatient following utilization review and after the patient has been admitted, condition code 44 must be affixed to the claim form to indicate that the patient status was changed and approved by the admitting physician. As this has always applied to the unexpected change of patient status following utilization review, Medicare holds that patients who are appropriately admitted with the two-midnight expectation would not require conversion to outpatient. Rather, the patient would remain an inpatient with the expectation that the admission was appropriate and the patient unexpectedly improved and was discharged, not changed in status from inpatient to outpatient.
Medicare proposes that all hospitals, long-term care facilities and critical access hospitals, with the exception of inpatient rehabilitation facilities, will be included in the final policies for two-midnight admission.
Medicare has addressed the expectations for medical review following implementation of the two-midnight rule by establishing medical review policies: (1) a two-midnight presumption; and (2) a two-midnight benchmark. Under the presumption, claims with lengths of stay greater than two midnights after formal admission will be considered appropriate and will not be the focus of medical review unless evidence indicates inappropriate gaming, abuse, or delays to exceed the two-midnight threshold. Medical review will focus on inpatient stays that do not meet the two-midnight threshold. In these cases, documentation must support why the decision was made to admit the patient and why the patient was deemed medically fit to be discharged prior to the second midnight.
Issues Related to ED Boarding
Specific to the emergency department, patients who are "boarded" in the ED until a bed becomes available after the admission order has been written present a special problem. The expectation is that the ordering physician may consider time the beneficiary spent receiving outpatient services (including observation, treatments in the ED, and procedures provided in the operating room or other treatment area) for purposes of determining whether or not the two-midnight benchmark is expected to be met; thus, inpatient admission is generally appropriate.
The starting point for medical review purposes will be from the time the patient starts receiving any services after arrival to the hospital, including the ED. However, the time prior to admission is not considered part of the admission stay, but will be considered for determining whether or not the patient should be admitted. An important consideration is if the physician is unable to make an evaluation and expectation of length of stay when the patient presents for treatment, it is appropriate to monitor the patient in observation or continue to perform diagnostics in the outpatient area.
If patient condition after one midnight as an outpatient dictate the need for an additional midnight receiving medically necessary care, the physician may consider the case in the outpatient setting when making the admission decision. Medicare review contractors would apply the two-midnight benchmark for all time spent within the hospital in evaluation of the claim. Hospitals can expect prepayment audits of 10-25 claims to determine appropriateness of billing.
Of note, based on actuarial data from FY 2009-2011 claims data, "Medicare expects approximately 400,000 encounters would shift from outpatient to inpatient, and approximately 360,000 encounters would shift from inpatient to outpatient, resulting in a net reduction of 40,000 outpatient encounters."
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