To All:

Attached is a copy of an item of interest to everyone that was discussed at the Medical Executive Committee on April 7th. At the conclusion of the discussion, several people asked if there were some way to have the patient’s Level-of-Care Status displayed in Portal. In fact, Patient Type may be selected from the Edit menu as an option for display as a column in both the Patient Demographics and CM Station Census banners in Physician Portal. Patient Type will be displayed as either Inpatient or Outpatient. Just remember that Observation is a subcategory of Outpatient. I hope this is helpful.

As for the revitalization of the RACs and the attendant importance of proper Level-of-Care selection and documentation, this becomes even more significant for physicians, because a finding from the acute care environment can spill over into an evaluation of the involved physician’s coding and billing practices. Yes, there is a bit of gamesmanship involved here, but things will not go well for the institution or the individual physician if everyone doesn’t learn the rules and what is required for compliance and agree to work together. Thank you in advance for your cooperation.

John E. Stone, Jr., M.D., FACS, FACC

Vice President, Medical Informatics

CMIO

Providence Hospital

Office: 251-633-1520

Email:

Return of the RAC’s: Level-of-Care Determination (IPPS) is of Paramount Importance

The Problem: Inappropriate selection of the Level-of-Care and/or inadequate documentation related to the Level-of-Care determination with resultant loss of reimbursement

Background Information on The Problem:

  1. Recovery Audit Contractors (RACs) have been on stand-down for the last fiscal year (FY 2014), but they are back in the game on May 1, 2015.
  2. Providence had 454 Inpatient claims denied on first pass in FY 2013. These initial denials were due to our documentation’s not supporting the submitted level of care. These claims had an initial value of $2.3 million. Some of these were appealed and overturned, but some are still waiting to be heard by an Administrative Law Judge.
  3. Thus far in the first half of FY 2015, Providence has had 21 no-pay claims, 2 of which are Blue Advantage patients. This is from a self-audit, not a RAC audit. Even with the assistance of Dr. Mike Huddle, our Physician Advisor, this still amounts to a write-off of $107,000.
  4. Providence currently has $1,798,008 tied up in RAC cases and $384,644 tied up in MAC (Medicare Administrative Contractor) cases, for a combined total of $2,182,652.
  5. When the RACs are back in full operation in May, a finding against the hospital will also result in an examination of the physician’s billing practices. If the RACs deem any admission medically unnecessary, reimbursement to the physician will be denied.

Situations in which The Problem arises:

  1. Direct Admits and Transfers are a common source of issues.
  2. A focus of the RACs will be 2-day stays (not 2-midnight stays; rather 1-midnight stays)
  1. A patient admitted as an anticipated 2-midnight stay may be discharged on Day 2 without a penalty if there is adequate documentation, specifically in the discharge summary.
  2. A patient “admitted” into Observation Level-of-Care should either be discharged on Day 2 or converted to a 2-midnight stay Inpatient Level-of Care. Once, again, it’s all about the documentation.
  3. 2-midnight Inpatient Level-of-Care cannot be converted to Observation Level-of-Care at the time of discharge without a Physician Advisor or 3rd party review as a Code 44
  1. Red Flag “diagnoses”and LOS for 2-midnight Inpatient Admissions include:

chest pain (not an AMI)

abdominal pain (unclear etiology)

atrial fib for rate-control, cardioversion, etc.

for Placement (a real no-no!)

2-day stays (as noted above)

  1. Admission Source has an impact on Level-of-Care determination:
  1. Emergency Department – could be either Observation or 2-midnight Stay Inpatient, but most appropriate choice should be apparent at the time.
  2. Direct Admission – it should be obvious what the Level-of-Care should be.
  3. Transfer – this is commonly a “pig-in-a-poke” situation. You don’t always know, so Observation may be best choice. It can always be changed at Day 2, if the patient needs to stay.
  1. Summary of Decision-making for Level-of-Care Determination:
  2. If you don’t know what is actually going on with a patient or what you will need to do, choose Observation. You can always change it later.
  3. If you do know what’s going and what you will need to do, and it will take more than 2-midnights, choose the Inpatient 2-midnight Stay option. If it won’t require more than 2-midnights, choose Observation, remembering you may always change it later.
  4. Recent Communications from the RACs (4/6/2015)
  5. RACs will be looking for co-signatures to be present within 24 hours, even in surgical cases.
  6. Prolonged stays are a focus, especially those with 20-day outlier status. These cases require justification for the prolonged admission by comments from the Provider in the Progress Notes leading up the 20-day Length-of-Stay and beyond.