To Admit or Observe: THAT Is the Question

Suzanne K. Powell, RN, MBA, CCM, CPHQ

Health Services Advisory Group

Objectives

Identify why Observation versus Inpatient is a national concern.

Define OBSERVATION (OBV). Determine the appropriate use of OBV vs.

INPATIENT hospital admissions. Identify a proven method to reduce

unnecessary admissions using a case management protocol.

CMS Concerns CMS paid $19.9 billion in error for Medicare fee-for-

service claims.* 17.2% were due to medically unnecessary services.* 43.7% were due to insufficient documentation.* 41% of admission errors were associated with one-day

stays that were billed as inpatient. – DRG 143 is one of the most common billing errors.

Because the payment error rates are increasing, there may be more auditing in the future.

* Improper Medicare FFS Payments Report FY 2004, Rev. 2/15/05, http://www.cms.hhs.gov/cert

Arizona Concerns In FY 2005 over 4,500 claims were submitted for

DRG 143 (chest pain) in Arizona:– One-day stays accounted for 52% of the claims.– Of those one-day-stay claims, InterQual (IQ) admission

criteria were applied to a random sample and 93.5% failed.– Of those same claims, a further sample of DRG 143 was

requested of the hospitals with the highest number of claims.• 97% failed to meet IQ admission criteria.

– Since each inappropriate admission cost $2,376, Medicare overpaid $5,393,520 for these admissions.

Arizona is #2 in the nation for one-day-stay claims (only one state has more than AZ).

Hospitals Concerns

SO . . .Start improving your processes NOW ―

Avoid the CMS RUSH to audit, and potentially deny, payment for

unnecessary hospitalizations!

Now What? Do we have a problem?YES. One-day stays for chest pain (DRG 143) in Arizona

are high. What can we do? (1) Case Management Protocol (or a ‘variation on a

theme’)(2) Use OBV status as a default for DRGs with high

error rates (DRG 143) How will we know if what we are doing is effective? Monthly audits / run charts to track progress

Why all the confusion over OBV?

Misunderstanding of the roles of physicians and facilities in determining patient status.

Confusion over the Medicare rules for appropriate selection of status.

Distinction between inpatient and extended outpatient observation is blurry.

It is difficult to correct admission errors “after-the-fact” (i.e., after discharge).

Difficult to convince clinicians that the difference is one of BILLING, not MEDICAL TREATMENT.

Definition: Observation Services

CMS Manual System, Pub. 100-02 Medicare Benefit Policy says …Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short-term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.

(up to 48 hours for Medicare FFS beneficiaries)***Note that managed Medicare and private insurance companies’ admission status

rules may vary from those of FFS Medicare (often 23 hours or 24 hours).

Purpose of Observation

Observation is used to evaluate a patient’s condition in order to determine the need for acute inpatient admission.

Advantages of Observation Allows the physician to observe the patient

when unsure of diagnosis or trajectory of current symptoms

Avoids potentially unnecessary acute care admission and costs

Decreases burden on ED and augments hospital reimbursement (does not alter physician reimbursement)

Does not preclude an eventual admission

Observation ServicesKEY Questions to ASK

In what condition will the patient most likely be tomorrow?

“Better” = Observation Is it risky to send the patient home today?

“Yes” = Observation

Is it likely I will know whether to admit or send the patient home by tomorrow?

“Yes” = Observation

Observation ServicesKEY Questions to ASK

Are vital signs stable?“Yes” = Observation

Will a diagnosis likely be made in 24 hours?“Yes” = Observation

Will treatment, such as IV fluids, require standard monitoring and be complete within 24 hours?

“Yes” = Observation

Observation ServicesKEY Questions to ASK

Is the patient presenting with a symptom(s) (e.g., chest pain, abdominal pain, TIA)

“Yes” = Observation Is the patient having an unusually long recovery period

following outpatient procedure (e.g., pain management issues, cardiopulmonary concerns, urinary retention)

“Yes” = Observation

Do NOT use OBV for….

Social reasons Physician or patient convenience Routine prep for diagnostic testing Routine recovery from outpatient

procedures Procedures designated as “inpatient only”

OBSERVATION: The RULEIt’s Elementary!

R/O Rule Out

= R/O Remember

Observation

Will my patients get second-class care? NO! And, by the way,

my hospital does NOT have an OBV Unit…

Observation services can be provided anywhere in the hospital– Example: Continuous monitoring (such as telemetry) can be

provided in observation or inpatient status; consider overall severity of illness and intensity of services in determining admission status rather than any single or specific intervention.

Level of care, not physical location of the bed, dictates admission status.

Observation . . . it’s not a “place”

It’s a state of Mind.

WHEN does the OBV “CLOCK” START?

Observation time begins at the documented time in the patient’s medical record that coincides with the time the patient is placed in a bed for the purpose of initiating observation.

Must be in accordance with a physician’s order / nursing note; computer time may be inaccurate

Round out to the nearest hour. FFS Medicare coverage for observation services

requires at least 8 hours of monitoring and is limited to no more than 48 hours unless the fiscal intermediary grants an exception.

WHEN does the OBV “CLOCK” END?

The ending time for observation occurs when:– The patient is discharged from the hospital, OR– The patient is admitted as an inpatient.

The time when a patient is “discharged” from observation status is the clock time when all clinical or medical interventions have been completed, including any necessary follow-up care.

Observation care does not include time in the hospital subsequent to the conclusion of medical interventions (e.g., time waiting for a ride home).

Can I change from OBV to Inpatient?

YES!

OBV-to-Inpatient An outpatient observation patient may be progressed to inpatient status when it is determined the patient’s condition requires an inpatient level of care―anytime up to 48 hours (for FFS Medicare patients).

Can I change from Inpatient to OBV?

YES!Inpatient-to-OBV (CODE 44): Hospitals can

convert and bill an inpatient case as an outpatient if the hospital utilization review committee determines before the patient is discharged and prior to submitting a bill/claim that this setting would have been more appropriate. The patient’s physician must concur with the decision of the review committee, and the physician’s concurrence and status change must be documented in the medical record.

Considerations when making OBS/Inpatient adjustments

Only use information available to the physician AT THE TIME of the decision to admit to OBV or inpatient. Patient Safety is number #1 criterion:

– Medical necessity for admission must be met and documented at the time of conversion.

– Physicians can only change admission status prior to discharge.

– Any change in admission status must be supported by the medical record (physician notes and orders).

Documentation is CriticalObservation status MUST be specifically stated in the

order Documentation must support the level of care

provided (inpatient admission versus OBV): – An order simply documented as “admit” will be

treated as an inpatient admission. – A clearly-worded order will ensure appropriate

patient care and prevent hospital billing errors. Some use: “admit to observation” or “place patient in outpatient observation”

Once the patient has been in OBV status for 24 hours . . .

Document the answers to these questions: Is there a need to continue observation status for the

next 12–24 hours?

or Is there a need to convert to inpatient status?

– It is important to document the medical necessity for admission status.

or Is the patient medically stable for discharge?

– Document the plan for follow-up as needed.

THE ADMISSION DECISION TEST

* The decision to admit a patient as an inpatient requires complex medical judgment, including consideration of the patient’s medical history and current medical needs, the medical predictability of something adverse happening to the patient, and the availability of diagnostic services/procedures when and where the patient presents.

Observation is appropriate.

Inpatient admission is appropriate.

Alternate level of care is appropriate

Additional time is needed to determine if inpatient admission is medically necessary. Observation is appropriate.

Yes

Unsure

No

No

Can condition be

evaluated / treated / improved

within 48 hours?

Does condition require hospital

Treatment?*

Medicare Observation or Inpatient? Admission Decision Test

Yes

THE CASE MANAGEMENT PROTOCOL

Physician Order “Admit patient per CaseManagement/Utilization Management Protocol”

Standing Orderfor all patients

regardless of payorsource?

PRN Orderat the discretion of

the individualphysician?

Other

Patient admitted to Protocol

Admitting Dept.and/or Business Office

has “hold status” (2-6 hrtimeframe) for patient until inpatient or

observation status are determinedby CM/UMpersonnel

Other

CM/UMpersonnel assess patient

admitted per protocolin 2-6 hrs

Default to observation status

CM/UM personnel assesspatient admitted per protocol

Case Management personnel assign patient to appropriate statusDecision binding and upheld by the physician writing the order

CM/UMDecision

Admitted as “Inpatient” usinghospital admission criteria

Assigned as“Observation status”

DecisionDischarged after evaluation and/or

treatment within 24-48 hrs afterplaced in observation status

Patient subsequently meetscriteria for conversion to

inpatient status within 24-48 hrs

and/orCM/UM continuousassessment

Physician notified, andassesses

Yes

No

Yes

No

Yes Yes

NoNo

Admission Per Case Management Protocol

Case Management ProtocolAn Answer to the Observation Conundrum

Physician admits patient to the Observation CM/UM Protocol

Case Manager/Utilization Manager assessment Determine appropriate status of patient (Inpatient vs.

Outpatient) Ordering Physician abides by case management

determination Protocol for all patients, regardless of payer (but only

send HSAG Medicare FFS charts)

Admission Per Case Management Protocol – Part 1

Physician Order “Admit patient per Case Management/Utilization Management Protocol”

Patient admitted to Protocol

Standing Order

for all patients regardless of payor source?

YES

NO

PRN Order

at the discretion of the individual

physician?

Other NO

YES

Admission Per Case Management Protocol – Part 2

Default to observation statusCM/UM personnel

assess patient admitted per protocol in 2-6 hrs

NO

Admitting Dept. and/or Business

Office has “hold status” (2-6 hr timeframe) for patient until inpatient or

observation status are determined by CM/UM personnel

Other NO

YES

YES

CM/UM personnel assess patient admitted per protocol

Case Management personnel assigns patient to appropriate status. Decision binding and upheld by

the physician writing the order

Admitted as “Inpatient” using hospital admission criteria Assigned as “Observation

status”

Patient subsequently meets criteria for

conversion to inpatient status within 24-48 hrs.

Discharged after evaluation and/or

treatment within 24-48 hrs after placed in observation status

CM/UM continuous assessment

Physician notified, & assesses

&/or

CM/UM Decision

Decision

Admission Per Case Management Protocol – Part 3

THE CHEST PAIN PROTOCOL

CHEST PAIN Considerations

Inpatient admission: consider when a patient has: – Elevated Troponin– ST elevation– MI or dynamic ST-T wave changes on the EKG– Hemodynamic instability– Chest pain not responding to Nitroglycerin

Observation: consider when the patient has no EKG or enzyme changes, but the patient’s story suggests the possibility of acute cardiac ischemia

Algorithm for Chest Pain PatientsObservation Status vs. Inpatient Admission

Age > 30 with chest pain? SOB or syncope and > 45

years of age? Women with typical sxs that

are anginal equivalent?

EKG

InpatientAdmission

Are EKG findings HighRisk for ischemia?

Positive Troponin?

EKG

MD H&P with Risk Stratification

Very Low

ObservationStatus

Low, but non-chest paindiagnosis (i.e., HTN,

pneumonia, CHF)

LOWHIGH

ObservationStatus

NO

YES

YES

NO

NO

YES

YES

Systolic BP <100 mmHgor > 180 mmHg and/orPersistent or Recurrent

Chest Pain?

NOOne or moreYES

All NO

NO

Admit as an inpatientwith a diagnosis related

to area of concern

Is Chest Pain fullyexplained by: obvious local trauma? CXR findings?OR is the chest pain… fully and unambiguously

positional, pleuritic, orreproducible by palpation?

TEST ~ Case Study #1 67-year-old seen in the ED with

gradual onset of CP over past 2 hours EKG normal First set of cardiac enzymes showed

increased Troponin level

Observation OR Inpatient

TEST ~ Case Study #2

66-year-old seen in the ED with CP EKG slight ST elevation First set of cardiac enzymes negative

Observation OR Inpatient

TEST ~ Case Study #3 74-year-old man presented to his doctor with chest pain

“off and on” for a week.

– Patient was found to be bradycardic in the 50s

– No syncope

– Medications included toprol

Sent to ED: VS stable, BP 180/70, HR of 50/min. EKG sinus bradycardia. Enzymes normal. Chest pain description in the chart did not support a diagnosis of unstable angina. Bradycardia is explained by the medications

Correct Call? DRG 143 Case Study #4

67-year-old male, history of palpitations for 2 months, usually at rest in evening before bed, was admitted for cardiac monitoring and enzymes related to complaint of chest pain and palpitations. Physical exam was unremarkable. Cardiac enzymes were negative. ECG showed sinus rhythm with occasional PVCs. Discharge diagnoses were unspecified chest pain and PVCs.

Correct Call? DRG 143 Case Study #5

84-year-old man, history of CABG, was admitted with atypical chest pain for a week, which increased on deep inspiration. Enzymes and ECG unremarkable. Also complaining of weight loss over 3-year period. MI was ruled out. Also had work-up for weight loss while in the hospital. Discharge diagnoses were unspecified chest pain and weight loss.

Correct Call? DRG 143 Case Study #6

63-year-old woman, history of CAD, HTN, CVA, with prior MI in the 1970s, was admitted with chest pain described as sharp, retrosternal, with dyspnea and diaphoresis occurring at rest. Pain lasted for minutes, increasing with exertion and decreasing with rest. Pain started day before and has recurred several times. BP 140/80. Initial ECG showed minor non-diagnostic ST-T-wave changes. The hospital admitted to rule out MI. Serial cardiac workup negative. Stress perfusion study negative for ischemia. Discharged with diagnosis of chest pain. GI work-up planned as outpatient.

Contact Information

Suzanne K. Powell, RN, MBA, CCM, CPHQDirector, Acute Care/QI Program

602.665.6109spowell@azqio.sdps.org

All Medicare beneficiaries have the right to appeal their discharge from

a hospital, skilled nursing facility, home health agency, or comprehensive outpatient

rehabilitation facility. For more information, go to

http://www.hsag.com/azmedicare or call 1.800.359.9909.

www.hsag.com

This material was prepared by Health Services Advisory Group, the Medicare Quality Improvement Organization for Arizona, under contract with the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. The contents presented do not necessarily reflect CMS policy. Publication No. AZ-8SOW-SS-120106-01