Justifying

Medicare Inpatient Admissions

RAC Response and Appeals

Tactics

Gregory Palega, MD JD

MedManagement LLC

Medical Director of Regulatory Affairs

gpalega@medmanagementllc.com

Objectives

Learn the Correct Medicare Level of Care (LOC) Rules.

Identify Common Errors in Recovery Auditor (RAC) denial of payment rationales

Understand the Appeal Process

Understand the Approach to an Effective Level of Care Appeal

This is How it Goes Down!

The Facts Are Not in Dispute

Connolly admitted these facts were documented:

71 year old Man

Creatinine up to 2.8

Potassium 7.2

Complained of hurting all over and decreased urination.

History of CAD and diabetes

Seriously? Acute Renal Failure

Signs and symptoms not severe?

Not threatened by less intensive care?

Observation was warranted?

Patient did not require inpatient level services and was discharged after a short stay.

Snap Back to Reality

For practicing doctors and nurses, letters like this can induce an emotional response.

Channel it into an effective appeal

Clarity of Medicare LOC Regulations

Black Belt Medicare LOC Rule Review

Legal Chain of Command

US Constitution

Federal Law/Social Security Act

Court Decisions

HHS/CMS Regulations and “Rulings”

NCDs

LCDs, Medicare Manuals and other published guidance

Title XVIII of the Social Security Act, Section 1862(a)(1)(A) states that no Medicare payment shall be made for items or services which are not reasonable and necessary for the diagnosis or treatment of illness or injury

Only one LCD in effect- Highmark – DE, DC, MD, NJ, PA…recently acquired OK+?

L32222 WPS effective 3/2012 IA,KS,MO,NE

Private Insurers and Medicaid have different definitions and rules. Beware!

Defining Medicare Inpatient LOC

REGULATIONS-CMS Inpatient Details

“Generally, a patient is considered an inpatient if formally admitted as inpatient with the expectation that he or she will remain at least overnight and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight.”

Defined as 24hours

Source: Medicare Benefit Policy Manual, Chapter 1

Expected to Need Inpatient Care for 24h

Physicians should use a 24-hour period as a benchmark, i.e., they should order admission for patients who are expected to need hospital care for 24 hours or more, and treat other patients on an outpatient basis.

Ch 1, Section 10, MBPMs

Subjectively and Does not say

Objectively. Must “inpatient” level

be reasonable.

defined on later slides

Current CMS Factors to Consider

“…the decision to admit a patient is a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient’s medical history and current medical needs, the type of facilities available to inpatients and outpatients, the hospital’s by-laws and admissions policies, and the relative appropriateness of treatment in each setting.” Can they reliably treat this

out of the hospital in

this town? Source: Medicare Benefit Policy Manual, Chapter 1

Must Balance Facts Impacting CMS Factors

More CMS Factors Bearing on LOC

“Factors to be considered when making the decision to admit include such things as:

The severity of the signs and symptoms exhibited by the patient;

The medical predictability of something adverse happening to the patient;

The need for diagnostic studies that appropriately are outpatient (i.e., their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more) to assist in assessing whether the patient should be admitted; and

The availability of diagnostic procedures at the time when and at the location where the patient presents.”

Can the threat be eliminated in less than 24 hours?

Source: Medicare Benefit Policy Manual, Chapter 1

“Need” Inpatient Care Means…

Inpatient care rather than outpatient care is required only if the beneficiary's medical condition, safety, or health would be significantly and directly threatened if care was provided in a less intensive setting.

did not use “level of care” implies hospital location needed

The reviewer shall consider, in his/her review of the medical record, any pre-existing medical problems or extenuating circumstances that make admission of the beneficiary medically necessary.

Medicare Program Integrity Manual, Chapter 6 - Intermediary MR Guidelines for Specific Services 6.5.2 - Medical Review of Acute Inpatient Prospective Payment System (IPPS) Hospital or Long-

term Care Hospital (LTCH) Claims, A. Determining Medical Necessity and Appropriateness of Admission

“Need” Inpatient Care Means…

Without accompanying medical conditions, factors that would only cause the beneficiary inconvenience in terms of time and money needed to care for the beneficiary at home or for travel to a physician's office, or that may cause the beneficiary to worry, do not justify a continued hospital stay. The fact that the patient or family was “uncomfortable” doing this at home means outpatient care was offered and thought reasonable and necessary by the offering MD. Identify your “wants” versus “needs” Medicare Program Integrity Manual, Chapter 6 - Intermediary MR Guidelines for Specific Services 6.5.2 - Medical Review of Acute Inpatient Prospective Payment System (IPPS) Hospital or Long-

term Care Hospital (LTCH) Claims, A. Determining Medical Necessity and Appropriateness of Admission

What is the Requisite Intensity?

Auditors love attacking hospitals with the PIM intensity stick.

must receive services of such intensity that they can be furnished safely and effectively only on an inpatient basis.

No mention of IV fluid rate, hospital ward v ICU, oxygen

minimums…etc… previously defined as a 24 or more hour physical hospital setting

Medicare Program Integrity Manual Chapter 6 - Intermediary MR Guidelines for Specific Services 6.5.2 - Medical Review of Acute Inpatient Prospective Payment System (IPPS) Hospital or Long-

term Care Hospital (LTCH) Claims (Rev. 264; Issued: 08-07-08; Effective Date: 08-01-08; Implementation Date: 08-15-08)

Safely and Effectively

Surgery NOT on Inpatient-Only List

“Minor Surgery or Other Treatment –

When patients with known diagnoses enter a hospital for a specific minor surgical procedure or other treatment that is expected to keep them in the hospital for only a few hours (less than 24), they are considered outpatients for coverage purposes regardless of the hour they came to the hospital, whether they used a bed, and whether they remained in the hospital past midnight.”

Chapter 1, section 10 of the Medicare Benefit Policy Manual.

“Exclusions” Trump Card

Custodial care is excluded from coverage. Custodial care serves to assist an individual in the

activities of daily living, such as assistance in walking, getting in and out of bed, bathing, dressing, feeding, and using the toilet, preparation of special diets, and supervision of medication that usually can be self-administered.

Custodial care essentially is personal care that does not require the continuing attention of trained medical or paramedical personnel.

In determining whether a person is receiving custodial care, the intermediary or carrier considers the level of care and medical supervision required and furnished. It does not base the decision on diagnosis, type of condition, degree of functional limitation, or rehabilitation potential.

Medicare Benefit Policy Manual Chapter 16

110 - Custodial Care (Rev. 1, 10-01-03) A3-3159, HO-260.10, HO-261, B3-2326

Observation Is Not Always an Option

Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment, that are furnished while a decision is being made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. Observation services are commonly ordered for patients who present to the emergency department and who then require a significant period of treatment or monitoring in order to make a decision concerning their admission or discharge. Observation services are covered only when provided by the order of a physician or another individual authorized by State licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient services.

Medicare Claims Processing Manual Chapter 4 - Part B Hospital 290.1 - Observation Services Overview (Rev. 1760, Issued: 06-23-09; Effective Date: 07-01-09;

Implementation Date: 07-06-09) Observation services must also be reasonable and necessary to be covered by Medicare. In only rare and

exceptional cases do reasonable and necessary outpatient observation services span more than 48 hours. In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours.

Avoid Observation “Definition” Traps

Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment, that are furnished while a decision is being made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. Observation services are commonly ordered for patients who present to the emergency department and who then require a significant period of treatment or monitoring in order to make a decision concerning their admission or discharge. Observation services are covered only when provided by the order of a physician or another individual authorized by State licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient services. don’t use these words in inpatient rationales

Medicare Claims Processing Manual Chapter 4 - Part B Hospital 290.1 - Observation Services Overview (Rev. 1760, Issued: 06-23-09; Effective Date: 07-01-09;

Implementation Date: 07-06-09) Observation services must also be reasonable and necessary to be covered by Medicare. In only rare and

exceptional cases do reasonable and necessary outpatient observation services span more than 48 hours. In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours.

Synthesis of Self-Contradictory Rules

Highmark’s PA, Delaware, … LCD

Essentially controls the LOC determination at Summit and is very persuasive in other jurisdictions

LCD ID Number L27548 LCD Title Acute Care: Inpatient, OBSERVATION and Treatment Room Services

The determination of an inpatient or outpatient status for any given patient is specifically reserved to the admitting physician. The decision must be based on the physician's expectation of the care that the patient will require. The general rule is that the physician should order an inpatient admission for patients who are expected to need hospital care for 24 hours or longer and treat other patients on an outpatient basis. An inpatient admission is not covered when the care can be provided in a less intensive setting without significantly and indirectly threatening the patient's safety or health.

Although in many institutions there is no difference between

the actual medical services provided in inpatient and outpatient observation settings, in such cases the designation still serves to assign patients to an appropriate billing category.

Rules of Evidence

Events and Facts After the Admission

Inpatient vs. Observation determination Evidentiary Rules

QIOs (and RACs)* consider only the medical evidence which was available to the physician at the time an admission decision had to be made. They do not take into account other information (e.g., test results) which became available only after admission, except in cases where considering the post-admission information would support a finding that an admission was medically necessary. Medicare Benefit Policy Manual,Chapter 1 ,Page 8, § 10 * Sacred Heart v. First Coast, Medicare Appeals Council, Nov. 10, 2009

Rules of Evidence Sacred Heart Case- November 10, 2009

Medicare Appeals Counsel- binding 4th level appeal

“no presumptive weight should be assigned to the treating physician’s medical opinion in determining the medical necessity of inpatient hospital or SNF services under section 1862(a)(1)of the Act.

A physician’s opinion will be evaluated in the context of the evidence in the complete administrative record

Thus, the Council notes that there is no presumption that a treating physician’s judgment establishes Medicare coverage

We have to deal with both facts and stated MD opinions /plans when determining if an inpatient LOC is supported by the record.

RACS and All Others Must Follow the PIM

Affiliated contractors (ACs) shall follow all sections of the PIM unless otherwise indicated.

Medicare administrative contractors (MACs), comprehensive error rate testing (CERT) contractors, recovery audit contractors (RACs), program safeguard contractor (PSCs) and zone program integrity contractors (ZPICs) shall follow the PIM as required by their applicable Statement of Work (SOW).

Medicare Program Integrity Manual Chapter 1 - Medicare Improper Payments: Measuring, Correcting, and Preventing Overpayments and Underpayments 1.1- Overview of Program Integrity and Provider Compliance (Rev. 313; Issued: 11-20-09; Effective/Implementation Date: 12-21-09)

The PIM yields to MBPM for details

Section 6.5.2 of the PIM

A. Determining Medical Necessity and

Appropriateness of Admission

“See Pub. 100-02, chapter 1, §10

for further detail on what

constitutes an appropriate

inpatient admission.” - aka the

Medicare Benefit Policy Manual Chapter 6 - Intermediary MR Guidelines for Specific Services 6.5.2 - Medical Review of

Acute Inpatient Prospective Payment System (IPPS) Hospital or Long-term Care Hospital

(LTCH) Claims

Nuts and Bolts

Medicare Level of Care

Medical Necessity

Appeals

Level 5 Appeal / US District Court

Level 4 Appeal / Appeals Council

Level 3 Appeal / Hearing by Administrative Law Judge

Level 2 Appeal / Reconsideration by Qualified Independent Contractor

Level 1 Appeal / Redetermination by MAC

Part A QIC Jurisdictions

2nd Level Appeals

The First Three Denials…

Don’t Confuse Discussions with

Appeals

-RAC SOW Section 14. Allowance of a Discussion Period

If during the discussion period the

recovery auditor is notified by the

contractor that the provider initiated the

appeals process, the recovery auditor

shall immediately discontinue the

discussion period …

Discussion does not toll the appeal or

recoup blocking deadlines.

Evidentiary Change?

RAC screen tools “shall not” make policy.

Section E, 4, page 20 of 2011 SOW

“In the absence of CMS policy

Review Guidelines shall be

developed using evidence-based

medical literature to assist reviewers

in making a determination.”

RA SOW Section E 2. The Claims Review Process.

2. Minor Omissions…not fatal?

Consistent with Section 937 of the MMA, the

Recovery Auditor shall not make denials on

minor omissions such as missing dates or

signatures if the medical documentation

indicates that other coverage/medical

necessity criteria are met.

How to Write an Effective Appeal

The MedManagement Format

Severity of the signs/symptoms exhibited by the

patient: Insert a brief summary of presenting signs,

symptoms, and test results. Cite/add the actual key quotes

from the HPI or key lab data supporting your

determination.

Pre-existing Medical Problems or Extenuating

Circumstances: List only significant history that impacts

the patients risk and complexity (Generally not every

surgery, fibromyalia, nor G3P1…)

Medical predictability of something adverse happening

to the patient: State the risk (high or low) and the

applicable threat. If you recommend admission based on

risk, use “high risk” here. Explain why the risk is high

despite some unimpressive “numbers.” Then, describe why

one would predict the need for 24 hours of care that can

only be given in the hospital.

Why? Because?

1- The risks of severe health threats are higher than the initial data show because...

2- The only safe way to manage the risk is inpatient care because…

3- More likely than not, necessary care will take > 24 hours because...

4- The expected inpatient level services (or actual services received)are the type that can only safely be done in an inpatient setting.

Back to this Nonsense (Non Sequitur)

Example Appeal

Severity of Signs and Symptoms: The patient was a 71 year old man who presented to the emergency room with hypotension (94/61). Moreover, objective testing revealed acute renal failure, with a creatinine already up to 2.8 (baseline of 1.3 or less) and severe hyperkalemia (potassium of 7.2). As a result, the responsible physician formally admitted the patient to the inpatient setting.

This is Your Argument

Complicating Pre-existing Medical Problems: Likely coronary artery disease (CAD) based on age, diabetes, and hypertension.

No need to repeat facts already in the record. The record will accompany your appeal. This is your chance to explain and educate. Note my liberties above…

Explain Why the Risk was So High

The medical predictability of having an adverse health outcome was moderate to high risk for CHF/pulmonary edema and deadly high potassium (K) arrhythmias from renal failure because of his likely cardiac disease and severely elevated K. Plus, the serum creatinine does not reflect the severity of the renal failure until the renal function is in equilibrium; which takes several days after a renal insult. Meanwhile, the creatinine would only rise a point or so per day, even if both kidneys completely failed before the patient arrived.***

Explain Why 24 Hours Needed

Likewise, the creatinine will take days to improve even if initial therapy is successful. However, at any time the potassium can shoot up to life threatening levels in hours. Therefore, the admitting doctor needs to expect to frequently and serially measure blood electrolytes and kidney function over 24-48 hours while frequently measuring and correcting vital electrolytes lest the patient suffer fatal cardiac arrhythmia. Acute IV therapies, IV fluids, and dialysis need be immediately available during this time

Define Inpatient Intensity Properly

Actual inpatient intensity services received:

More than 24 hours of IV fluids, continuous cardiac rhythm management, and serial testing and exams in a setting where IV electrolyte management, defibrillation, and IV antiarrhythmics were immediately available. This care can only be rendered in a hospital setting.

Questions

?