OBSERVATION AND THE 2

MIDNIGHT RULE Maureen Ruga NP

AVP Quality Management

Peconic Bay Medical Center

DOES YOUR CFO LOOK LIKE THIS?

Roaming the halls while muttering about 1 Day Stays, Observation

Status, LOS, Medical Necessity Denials and the 2 Midnight

Rule???????

AND YOUR DOCTORS LIKE THIS?

While driving CDI and HIM crazy asking WHY can’t they just take care

of patients? And if you are making up these rules?

MOST LIKELY CAUSES……….

Observation Status

Code 44

2 Midnight Rule

Electronic Medical Record

ICD-10

RACS AND PREPAID DENIALS

The Recovery Audit Program’s mission is to

identify and correct Medicare improper payments

through the efficient detection and collection of

overpayments made on claims of health care

services provided to Medicare beneficiaries, and

the identification of underpayments to providers

so that the CMS can implement actions that will

prevent future improper payments in all 50

states.

Medicare Administrative Contractors prepaid

denials.

1 Day Stays

ww

w.cm

s.gov

RECOVERY AUDIT CONTRACTOR PROGRAM

What Does A Recovery Auditor Do?

Reviewed paid claims from 2009-2011

The Recovery Audit Review Process:

Recovery Auditors review claims on a post-payment basis

Three types of review:

Automated (no medical record needed)

Semi-Automated (claims review using data and potential human review of a medical record or other documentation)

Complex (medical record required)

Recovery Audits look back three years from the date the claim was paid

Recovery Auditors are required to employ a staff consisting of nurses, therapists, certified coders and a physician.

WHAT IS OBSERVATION STATUS?

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.

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.

ww

w.cm

s.gov

OBSERVATION STATUS

Specific criteria include: There must be a physician order to place the patient

in observation!!!!!

For Medicare payment, a HCPCS 99284, 99285, or G0384 ED visit code, critical care, or a 99205 or 99215 clinic visit is required to be billed on the day before or the day that the patient is placed in observation.

If the patient is a direct referral to observation the G0379 may be reported in lieu of an ED or clinic code.

In addition, the E/M code associated with these other services must be billed on the same claim form as the observation service and the E/M must be billed with a modifier -25 if it has the same date of service as the observation code G0378.

http

://ww

w.a

cep

.org

/

REQUIREMENTS

The observation stay must span a minimum 8 hours and these hours must be documented in the "units" field on the claim form.

For facilities, the "clock" starts at the time that observation services are initiated in accordance with a practitioner's order for placement of the patient into observation status.

Patients must be notified that they are being put on Observation Status (notified in writing prior to discharge)

Observation status can not be used towards a 3 day qualifying stay for SNF!

Part B billing more out of pocket expense

http

://ww

w.a

cep

.org

/

OBSERVATION CONTINUED

You must carve out time for tests i.e. Radiology

Patient’s home meds are not billable

Policy regarding taking medications from home

CONDITION CODE 44

Policy:

1. In cases where a hospital utilization review committee determines that an inpatient admission does not meet the hospital’s inpatient criteria, the hospital may change the beneficiary’s status from inpatient to outpatient and submit an outpatient claim (TOBs 13x, 85x) for medically necessary Medicare Part B services that were furnished to the beneficiary, provided all of the following conditions are met:

a. The change in patient status from inpatient to outpatient is made prior to discharge or release, while the beneficiary is still a patient of the hospital;

b. The hospital has not submitted a claim to Medicare for the inpatient admission;

c. A physician concurs with the utilization review committee’s decision; and

d. The physician’s concurrence with the utilization review committee’s decision is documented in the patient’s medical record.

2. When the hospital has determined that it may submit an outpatient claim according to the conditions described above, the entire episode of care should be treated as though the inpatient admission never occurred and should be billed as an outpatient episode of care.

3. Refer to Pub. 100-04, Medicare Claims Processing Manual; Chapter 30, Financial Liability Protections; Section 20, Limitation On Liability (LOL) Under §1879 Where Medicare Claims Are Disallowed; for information regarding financial liability protections.

4. When the hospital submits a 13x or 85x bill for services furnished to a beneficiary whose status was changed from inpatient to outpatient, the hospital is required to report Condition Code 44 in one of Form Locators 24-30, or in the ANSI X12N 837 I in Loop 2300, HI segment, with qualifier BG, on the outpatient claim.

ww

w.cm

s.gov

CASE MANAGEMENT

Assess for Medical Necessity

Provide Level 1 Screen

Milliman Care guidelines (MCG)

InterQual Criteria

Case Managers can not determine but can assist

practitioners in determining if the patient meets

inpatient criteria.

Many hospitals have case managers in the Emergency

Department to evaluate patients prior to admission

orders being written

MCG CONGESTIVE HEART FAILURE

Care Planning - Inpatient Admission and Alternatives

Return to top of Heart Failure - ISC Clinical Indications for Admission to Inpatient Care

Return to top of Heart Failure - ISC Admission is indicated by 1 or more of the following(1)(2)(3)(4):

Hemodynamic instability

Anasarca

Severe electrolyte abnormalities requiring inpatient care(9)

Cardiac arrhythmias of immediate concern

Precipitating cause for acute decompensation (eg, pneumonia, pulmonary embolism) requires inpatient care.

Acute cardiac ischemia causing or associated with failure. See AnginaISC or Myocardial InfarctionISC as appropriate.

Inpatient admission required rather than observation care (see Heart Failure: Observation CareISC guideline as appropriate) because of 1 or more of the following: Significant finding or clinical condition judged too severe (eg, treatment intensity or expected duration requires

inpatient admission) or too persistent (eg, insufficient improvement or worsening despite initial intervention or treatment for up to 24 hours) to be within scope of observation care, including 1 or more of the following:

Pulmonary edema that is severe or worsening

Cognitive impairment that is severe or persistent

Acute renal insufficiency that is severe (reduction of more than 50% in estimated glomerular filtration rate from baseline) or progressive (reduction of more than 25% in estimated glomerular filtration rate from baseline, with creatinine continuing to rise) GFR - Adult Calculator

Acute peripheral ischemia (eg, pulseless, cool, mottled, or cyanotic extremity)

Acute renal failure

Other significant finding or clinical condition judged not to be within scope of observation care

Treatment or monitoring requiring inpatient admission (eg, due to intensity or expected duration) as indicated by need for 1 or more of the following(10):

Supplemental oxygen or respiratory treatments for over 24 hours that are performable only in acute inpatient setting

Pulmonary artery catheter monitoring

Other treatment or monitoring requiring inpatient admission

mcg

18

th E

ditio

n

2 MIDNIGHT RULE

BACKGROUND

CMS wants to limit the use of observation status

to reduce its financial burden on Medicare

beneficiaries.

Observation stays result in greater out-of-pocket

expenses for beneficiaries and do not count

toward the three-day eligibility requirement for

Medicare skilled nursing facility (SNF) coverage.

CMS is particularly concerned about the growth

in long-stay observation cases (those greater than

48 hours) which have increased from 3% of all

observation cases in 2006 to 8% in 2011.

ww

w.cm

s.gov

2 MIDNIGHT REQUIREMENT

CMS contractors will operate under the presumption that stays of

at least two midnights are medically necessary, with the “clock”

beginning when the patient starts receiving hospital services

(including observation services).

During the September 26 open-door forum, CMS clarified that if a

patient stays one midnight in observation and the physician

expects that the patient will require at least another midnight in

the hospital, the patient can be appropriately admitted despite

the fact that it is a one-day inpatient stay.

If a patient is admitted but ultimately doesn’t stay two

midnights, clear physician documentation supporting the order

and expectation of two midnights will be required.

ww

w.cm

s.gov

WHEN CHANGING STATUS FROM OBS TO

INPATIENT

Observation time will count the towards 2 midnight stay

Observation time does not count toward SNF qualifying stay.

If the patient recovers prior to 2 midnights you can still bill as inpatient with the appropriate documentation

If the patient has a procedure on the inpatient only list you can bill as inpatient

If the patient is placed on a vent you can bill as inpatient

ICU status alone is not sufficient for inpatient billing if patient stays less than 2 midnights

MEDICARE PROBE AND EDUCATE

• Medicare Audit Contractors (MACs) will focus their reviews on claims that are less than "two midnights" after admission. They will continue to conduct coding reviews, or reviews to ensure coverage guidelines are met for a certain surgeries, but for the purpose of verifying inpatient, outpatient, and observation status, only claims marked as one inpatient midnight will be used.

• RACs will not be conducting medical necessity reviews during the three-month "amnesty" period. (restart in Oct)

• Ten claims will be gathered from most hospitals, while a larger sample—about 25 claims—will be taken for larger facilities.

• MACs will review the results of the claims to provide education back to providers, and inform hospitals how well they're doing in terms of compliance.

• At the end of the three-month period, CMS will review the results to gauge the need for more guidance and "go from there," Combs-Dyer said.

HOSPITALS GET A GRACE PERIOD—OF SORTS

The deadline to begin enforcement of certain

aspects of the "two-midnight" rule had already

been delayed from Oct. 1, 2013, to March 31,

2014, after providers voiced their concerns.

Friday's announcement pushes the deadline

another six months, requiring recovery

auditors—who use data-mining techniques to

locate suspicious admissions—to wait until Sept.

30 to begin penalties for incorrect claims under

the rule.

http

://ww

w.a

dviso

ry.co

m/

RISK ASSESSMENT OF OUR RECORDS

No LOS documented in H&P

Uncertainty of coders of status of patient

Consultant letters (Too late to place patient on OBS,

MD doesn’t agree, No UM note etc…..)

Registered as inpatient when physician order

was for observation and vice versa

No admit order what so ever!!!!

No inpatient order!!!!!!

Design of EHR

HYBRID CHARTS

Just complicate everything!!!!

ED still on paper

Coders are abstracting from EHR and paper.

Coders are dual coding preparing for ICD-10

THANK YOU!!!!!!

Questions??????