As recovery audit contractors set their sites on medical necessity of inpatient stays, hospitals enter a hazy area of compliance. RAC consultants say Medicare definitions of what constitutes inpatient and outpatient services do not offer clear guidance. In a recent podcast, CMS tried to clarify the issue. The podcast, titled "Recovery Audit Program Demonstration High-Risk Medical Necessity Vulnerabilities for Inpatient Hospitals," identified five lessons learned from denials of claims, based on medical necessity errors.
1. Be aware of common medical necessity denials. Common denials involve use of multiple codes, charges for services not medically necessary in the inpatient setting, and coding ambulatory surgical center visits at the inpatient rate rather than the outpatient rate. Claims were denied because documentation did not support the diagnosis, justify treatment or procedures, show the course of care, identify treatment or diagnostic results, or promote continuity of care.
The most expensive denied categories care were cardiac defibrillator implant at $64.7 million, heart failure and shock at $34.1 million, other cardiac pacemaker implantation at $21.9 million, and chest pain at $19.1 million. In many of these cases, documentation did not justify inpatient services or the billed services weren't medically necessary in the inpatient setting.
2. Document what makes the admission medically necessary. Provide sufficient documentation showing that the patient's signs and symptoms were severe enough to require inpatient care. Document pre-existing medical problems or extenuating circumstances that make the admission medically necessary. "Factors resulting in a simple inconvenience to the beneficiary are not enough to justify an inpatient admission," CMS stated. "The beneficiary requires inpatient care only if his or her medical condition, safety or health would be significantly and directly threatened in a less intensive setting."
3. Follow guidelines for admission. Admission should be based on the severity of the signs and symptoms, possibility an adverse event occurring to the patient, the need for diagnostic exams or the availability of diagnostic tests.
4. Length of stay doesn't justify inpatient status. Coding experts say a stay of less than 24 hours is generally considered outpatient, but a stay of more than 24 hours still has to be documented to be billed as an inpatient stay. "CMS does not base Medicare coverage solely on the length of time the patient was in the hospital," the podcast stated.
5. Ensure consistency within the medical record. Ensure all entries are consistent with other parts of the medical record, including assessments, treatment plans, physician orders, nursing notes, medication and treatment records, admission and discharge data, and pharmacy records. If an entry contradicts previous documentation, include documentation to explain the contradiction. Document all significant changes in the patient's condition or care that could influence the determination.
Read a transcript of the CMS podcast on medical necessity vulnerabilities for hospitals (pdf).
1. Be aware of common medical necessity denials. Common denials involve use of multiple codes, charges for services not medically necessary in the inpatient setting, and coding ambulatory surgical center visits at the inpatient rate rather than the outpatient rate. Claims were denied because documentation did not support the diagnosis, justify treatment or procedures, show the course of care, identify treatment or diagnostic results, or promote continuity of care.
The most expensive denied categories care were cardiac defibrillator implant at $64.7 million, heart failure and shock at $34.1 million, other cardiac pacemaker implantation at $21.9 million, and chest pain at $19.1 million. In many of these cases, documentation did not justify inpatient services or the billed services weren't medically necessary in the inpatient setting.
2. Document what makes the admission medically necessary. Provide sufficient documentation showing that the patient's signs and symptoms were severe enough to require inpatient care. Document pre-existing medical problems or extenuating circumstances that make the admission medically necessary. "Factors resulting in a simple inconvenience to the beneficiary are not enough to justify an inpatient admission," CMS stated. "The beneficiary requires inpatient care only if his or her medical condition, safety or health would be significantly and directly threatened in a less intensive setting."
3. Follow guidelines for admission. Admission should be based on the severity of the signs and symptoms, possibility an adverse event occurring to the patient, the need for diagnostic exams or the availability of diagnostic tests.
4. Length of stay doesn't justify inpatient status. Coding experts say a stay of less than 24 hours is generally considered outpatient, but a stay of more than 24 hours still has to be documented to be billed as an inpatient stay. "CMS does not base Medicare coverage solely on the length of time the patient was in the hospital," the podcast stated.
5. Ensure consistency within the medical record. Ensure all entries are consistent with other parts of the medical record, including assessments, treatment plans, physician orders, nursing notes, medication and treatment records, admission and discharge data, and pharmacy records. If an entry contradicts previous documentation, include documentation to explain the contradiction. Document all significant changes in the patient's condition or care that could influence the determination.
Read a transcript of the CMS podcast on medical necessity vulnerabilities for hospitals (pdf).