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Inpatient Hospital Reviews

Inpatient Hospital Reviews

Updates 3-12-14

1. Reviewing Hospital Claims for Patient Status: Update

CMS has updated the Reviewing Hospital Claims for Patient Status: Admissions On or After October 1, 2013 document.  All changes and clarifications are in red italics.  

2. Questions and Answers Related to Patient Status Reviews: Update

CMS has updated the Questions and Answers Relating to Patient Status Reviews document.  All changes and clarifications are in red italics.  

3. Requesting Redeterminations Under the Extended Timeframe

As indicated in the 2-24-14, update, CMS will waive the 120 day timeframe for filing redetermination requests received before September 30, 2014 for claim denials under the Probe & Educate process that occurred on or before January 30, 2014.  If a provider believes their claim to fall into this category, and is requesting redetermination outside of the normal 120 day timeframe, CMS suggests that the provider include an indication of such in their appeal request. For example, providers may include a note within the redetermination request coversheet stating “This claim is being submitted for redetermination, outside of the normal 120 day timeframe, per CMS instruction.) The MAC will review your request, and after ensuring the claim is subject to “late” filing under the Probe & Educate re-review process and all other administrative requirements have been met, will accept the request for redetermination.

Updates 2-24-14

1. Reopenings and Appeals of Inpatient Probe and Educate Claims

On August 2, 2013 the Centers for Medicare & Medicaid Services (CMS) issued a final rule, CMS-1599-F, updating fiscal year FY 2014 Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital Prospective Payment System (LTCH PPS). The final rule modifies and clarifies CMS’s longstanding policy on how Medicare contractors review inpatient hospital and critical access hospital (CAH) admissions for payment purposes.  CMS subsequently released guidance on September 5, 2013 and January 30, 2014 that clarified the physician order and physician certification requirements for hospital inpatient admissions.  
CMS is requesting that the Medicare Administrative Contractors (MACs) re-review all claim denials under the Probe & Educate process to ensure the claim decision and subsequent education is consistent with the most recent clarifications.  The MAC may reverse their decision and issue payment outside of the appeals process if the MAC determines that a claim is payable upon re-review by the MAC.  Therefore, CMS urges providers to work with their MACs to determine if a claim has undergone final adjustment (in other words, has been re-reviewed) prior to submitting an appeal request. To ensure that the re-review process does not affect the ability of a provider to file a timely appeal of a denied claim, CMS will waive the 120 day timeframe for filing redetermination requests received before September 30, 2014 for claim denials under the Probe & Educate process that occurred on or before January 30, 2014.
Claim denials under the Probe & Educate process that occurred on or before January 30, 2014 for which an appeal has been filed will also be subject to re-review.  Claims determined payable following re-review will be adjusted accordingly.  Claims for which the denial is affirmed following re-review will be transferred to appeals automatically for a redetermination.
Providers can access the September 5th 2013 and January 30th 2014 documents
here.

2. Medicare Inpatient Probe and Educate Status Update

CMS has posted a document entitled Medicare Inpatient Hospital Probe and Educate Status Update in the Downloads section at the bottom of this page.  This document provides initial data collected from the inpatient hospital probe and educate reviews and examples of common denials made during the probe and educate period, to date.  

3. Selecting Hospital Claims for Patient Status Reviews: Update

CMS has updated the Selecting Hospital Claims for Patient Status Reviews document.  All changes and clarifications are in red italics.  

Updates 1-31-14

1. Extension of the Probe and Educate Period

CMS has decided to extend the Inpatient Hospital Prepayment Review “Probe & Educate” review process (described below in “Reviews Impacted by CMS-1599-F”) for an additional 6 months (through September 30, 2014).  This means that:

  • Medicare Administrative Contractors (MACs) will continue to select claims for review with dates of admission between March 31, 2014 and September 30, 2014.  MACs will continue to review and deny claims found not in compliance with CMS-1599-F (commonly known as the “2-Midnight Rule”).
  • MACs will continue to hold educational sessions with hospitals as described below in “Selecting Hospitals for Review” through September 30, 2014.
  • Generally, Recovery Auditors and other Medicare review contractors will not conduct post-payment patient status reviews of inpatient hospital claims with dates of admission on or after October 1, 2013 through September 30, 2014.  

The remainder of this website and related content will continue to be updated to reflect this extension

2. Additional Clarification of Guidance on the Physician Order and Physician Certification for Hospital Inpatient Admissions

CMS has released additional clarification on the provisions of the final rule regarding the physician order and physician certification of hospital inpatient services. This guidance can be found on the CMS Hospital Center website, http://www.cms.gov/Center/Provider-Type/Hospital-Center.html.

Background

On August 2, 2013 the Centers for Medicare & Medicaid Services (CMS) issued a final rule, CMS-1599-F, updating fiscal year FY 2014 Medicare payment policies and rates under the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital Prospective Payment System (LTCH PPS). The final rule modifies and clarifies CMS’s longstanding policy on how Medicare contractors review inpatient hospital and critical access hospital (CAH) admissions for payment purposes. Under this final rule, surgical procedures, diagnostic tests and other treatments (in addition to services designated as inpatient-only), are generally appropriate for inpatient hospital admission and payment under Medicare Part A when (1) the physician expects the beneficiary to require a stay that crosses at least two midnights and (2) admits the beneficiary to the hospital based upon that expectation. This policy responds to both hospital calls for more guidance about when a beneficiary is appropriately treated—and paid by Medicare—as an inpatient, and beneficiaries’ concerns about increasingly long stays as outpatients due to hospital uncertainties about payment.

The final rule clarifies that the timeframe used in determining the expectation of a stay surpassing two midnights begins when care in the hospital begins. This will include outpatient observation services or services in an emergency department, operating room or other treatment area at the hospital. While the final rule emphasizes that the time a beneficiary spends as an outpatient before the formal inpatient admission order is not inpatient time, the physician—and the Medicare review contractor—may consider this period when determining if it is reasonable to expect the patient to require hospital care spanning two or more midnights as part of an admission decision. Except in cases involving services on the inpatient-only list and in certain other rare and unusual circumstances (See Reviewing Hospital Claims for Patient Status: Admissions On or After October 1, 2013), documentation in the medical record must support a reasonable expectation of the need for the beneficiary to require a medically necessary stay lasting at least two midnights. If the inpatient admission lasts fewer than two midnights due to an unforeseen circumstance, this must also be clearly documented in the medical record.
Please refer to the Related Links section below to access the final rule "FY2014 Hospital IPPS Final Rule CMS-1599-F".

Please refer to the Downloads section below to access "Questions and Answers Relating to Patient Status Reviews."  This document has been updated, and includes any updates to previously released questions and responses.

Inpatient Hospital Reviews

CMS is issuing guidance about how we will review 1) inpatient hospital claims impacted by the Final Rule and 2) inpatient hospital claims not impacted by the Final Rule.

1. Reviews Impacted by CMS-1599-F

Prepayment Review

CMS will conduct prepayment patient status probe reviews for dates of admission on or after October 1, 2013 but before September 30, 2014.

Medicare Administrative Contractors (MACs) will conduct patient status reviews using a probe and educate strategy for claims submitted by acute care inpatient hospital facilities, Long Term Care Hospitals (LTCHs) and Inpatient Psychiatric Facilities (IPFs) for dates of admission on or after October 1, 2013 but before September 30, 2014.

  • MACs will select a sample of 10 claims for prepayment review for most hospitals (25 claims for large hospitals).
  • Based on the results of these initial reviews, MACs will conduct educational outreach efforts and repeat the process where necessary

For more information please see “Selecting Hospital Claims for Patient Status Reviews" in the Downloads section below and “Reviewing Hospital Claims for Patient Status" in the Downloads section below.

Post-payment Review

In general, CMS will not conduct post-payment patient status reviews for claims with dates of admission October 1, 2013 through September 30, 2014.

Recovery Audit Prepayment Demonstration Reviews

Recovery Auditors will not conduct pre-payment patient status reviews for claims with dates of admission October 1, 2013 through September 30, 2014. Recovery Auditors may continue to conduct CMS-approved claim reviews, unrelated to the appropriateness of the inpatient admission (i.e. patient status), as described on the Recovery Audit Program webpage entitled Prepayment Review Demonstration.

2. Reviews Not Impacted by CMS-1599-F

Other Inpatient Hospital Reviews

MACs, Recovery Auditors and the Supplemental Medical Review Contractor will continue other types of inpatient hospital reviews, including, but not limited to:

  • Coding reviews
  • Reviews for the medical necessity of a surgical procedure provided to a hospitalized beneficiary
  • Inpatient hospital patient status reviews for dates of admission prior to October 1, 2013 (based on the applicable policy at the time of admission)

Recovery Audit Reviews

  • Recovery Auditors may conduct automated reviews or complex reviews, for previously approved issues unrelated to CMS-1599-F for dates of services prior to October 1st 2013, which may continue through June 1st 2014.  

Other Circumstances Supporting Short Inpatient Stays

CMS identified in the final rule and provider outreach circumstances in which the physician’s expectation of a required hospital stay spanning two or more midnights was reasonable, and Part A payment would be generally appropriate, despite an unforeseen circumstance that result in the beneficiary’s length of the stay being shorter (i.e., unforeseen beneficiary death, unforeseen transfer, unforeseen departure against medical advice, and unforeseen clinical improvement). CMS also provided that procedures defined as “Inpatient-Only” are exceptions to the 2-midnight benchmark, and may be appropriately furnished on an inpatient basis regardless of the beneficiary’s length of stay, but do not constitute an all-inclusive list.

Other circumstances where an inpatient admission would be reasonable in the absence of an expectation of a 2 midnight stay should be rare and unusual.  To date, CMS has identified “Mechanical Ventilation Initiated during Present Visit” as the only rare and unusual circumstance in which the 2-midnight benchmark would not apply (see “Reviewing Hospital Claims for Patient Status" in the Downloads section below).  CMS will work with the hospital industry and with MACs to determine if there are any categories of patients that should be added to this list. Suggestions should be emailed to IPPSAdmissions@cms.hhs.gov with “Suggested Exceptions to the 2-Midnight Benchmark” in the subject line. If any rare and unusual exceptions are identified by CMS, these will be provided through subregulatory instruction.  

Questions can be sent to: IPPSAdmissions@cms.hhs.gov.

Stay Tuned: CMS will be updating this page with additional medical review information.