April 22, 2015p

Pelham, Al

Evolving Medical Necessity Documentation Requirements:

How to Reduce Denials, Avoid Recoupments and Audits and

Support Revenue Integrity and Compliance Activities

presented to:

Joan C. Ragsdale, JDJoan C. Ragsdale, JD

Chief Executive OfficerChief Executive Offi

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AlaHA/HFMA Audit Summit

Introduction

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q The principle of providing and being paid for medically necessary care is the fundamental cornerstone of our health care delivery system.

q What is “medically necessary care” for which payment should be made?

Ø Medicare coverage is for “items and services that are reasonable and necessary for the diagnosis or treatment of illness or injury.” 42 US 1395y(a)(1)(A)

Ø Providers must ensure that services are “provided economically and only when, and to the extent, medically necessary.”

Ø Additional guidance may be provided through NCDs, LCDs and various forms of CMS/government guidance.

Both Civil and Criminal EnforcementBoth Civil and Criminal Enforcementof Medical Necessity Requirements

q Traditionally, the False Claims Act was applied to expressly false certifications, cases where worthless services were provided, or grossly inadequate services were provided.

q Today, the False Claims Act is being used as a tool to seek civil damages and criminal charges against individuals and institutions for failure to adhere to standards of care.

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Increasing Enforcement Activity

q Increase in Qui Tam cases– 713 filed last year.

q DOJ recovered $2.99 billion through Qui Tam actions last year.

q Government receives $7-$8 dollars for each dollar spent on fraud enforcement.

q Recovery Auditor program-- example of aggressive pursuit of “overpayments” or improper payments.

q Expansion of federal government role in Medicaid likely to increase Medicaid enforcement objectives.

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Increasing Data from Which to Derive Increasing Data from Which to Derive Targets for Reviews or Recoupments

q Traditional sources of data such as PEPPR reports, claims data, charge data

q HEDIS Data, Physician Payment and Supplier Information

q Readmissions Reduction data

q Hospital Acquired Conditions data (HACs)

q Medicare Physician Quality Reporting (PQRS)

q Value Based Purchasing information

q Data from the Sunshine Act disclosing relationships and payment arrangements

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Recent Educational Comments

q Physicians now firmly in the crosshairs of government enforcement agencies

q State AG enforcement actions are on the rise

q Increased focus by DOJ Criminal Division

q Use of Civil Investigative Demands (“CIDs”)

q Executives under scrutiny

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New World of Clinical Documentation of d of Clinical DocumenMedical Necessity

q As always, first purpose is to tell the patient story to facilitate patient care. This first priority is often difficult to maintain as patient “hand-offs” occur in a fragmented health care system.

q Second purpose is to accurately reflect services performed and the basis for the services. This is necessary to facilitate patient care, reflect the basis for clinical decision-making, provide the support to ensure the decision-making and judgments were in accordance with acceptable clinical standards.

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New World of Clinical l Documentationw Worof

rld of CliWorf f Medical

nical DocuDClil l Necessityyy (continued)

q Third, documentation supports the necessity of the orders and services provided in order to support the claim for payment.

q Fourth, documentation supports the necessity of specific services and frequency of services.

q Fifth, documentation supports the individualized plan of treatment based upon the unique presentation and characteristics of a patient.

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Important Education:Important Education:Roles Among Staff Leadership

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q Teamwork and coordination--clinical documentation is both a corporate and an individual responsibility. Billing and financial management is interdependent with clinical documentation.

q Roles vary from facility to facility. It is important to understand requirements and “best practices.”

q Conditions of Participation define broad parameters for utilization management activities, while allowing discretion as to how certain processes operate within a given institution.

q Must be ongoing educational activities about medical necessity issues and quality directives. Focus should include specific areas of interest by specialty such as: NCDs, LCDs, Regulatory Changes, CPT terminology and coding issues, Medical opinion and standards and presented through accepted publications, as well as individual and corporate data.

q Corporate wide regulatory changes, such as the “two midnight” rule require education, monitoring and re-education as interpretations evolve.

q There is no room for a silo mentality.

Important Roles

q Atmosphere of compliance is important—actively listen to complaints or questions.

q Ensure that issues of quality are addressed specifically with respect to an individual case and from a process perspective to ensure organizational compliance.

q UR committee must have active oversight of services rendered by the institution.

q Must have strong team effort with CEO, CFO, Compliance Officers, CMO, Legal Officers and Director of Case Management.

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The Buck Stops Where?

q Each person is critical to ensuring integrity in the reimbursement process. The FCA imposes liability on each person who submits or “causes to be submitted” a false claim. Note the previous comments about increased focus on physicians and hospital executives. In short, providers and staff all have an interest in ensuring that documentation is accurate and services are billed correctly.

q Accuracy and completeness in medical record documentation is important for patient care, appropriate reimbursement and compliance.

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CMS Regulationsns-- The Basics:CMS Regulationns The Basics:TNuts and Bolts of Two Midnight Rule

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q Rule is effective for admissions on and after October 1, 2013.

q The Rule is applicable to Inpatient Psychiatric Facilities.

q The Rule was coupled with NEW certification requirements which were in place for acute care facilities from October 1, 2013-December 31, 2014.

q Medicare Administrative Contractors are auditing for compliance; recovery auditors are currently precluded from auditing for patient status.

Two Midnights Rule e ((§§ 412.3(e))

q Inpatient Admission appropriate when:

Ø For procedure on Inpatient Only List, or

Ø THE PHYSICIAN EXPECTS the patient to require a stay that crosses at least two midnights. ( Is also an exception for newly initiated mechanical ventilation).

q Otherwise: the services are generally inappropriate for inpatient admission and Medicare Part A payment, “regardless of the hour that the patient came to the hospital or whether the patient used a bed.”

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2014 CERTIFICATION REQUIREMENTS(Changed for 2015)

Plans for post-hospital care

Proper Medical Necessity

documentation (2 Midnight expectation)

Estimated Length of Stay

Reasons for Inpatient

treatments and dx tests

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Doesn’t need to be a separate document. Can refer to other documents in the chart.

Certification-New Rules…≥20 days length of stay and cost outliers—NOW THE ONLY REQUIREMENT FOR ACUTE CARE FACILITIES

Must be completed, signed, and documented in the medical record prior to discharge when required

Revisions to Certification Requirementso Certification Reeffective 1/1/15

q In transmittal CMS-1613-FC released on October 31, 2014, CMS changed its interpretation of the certification requirements for acute care hospitals to “require a certification only for long-stay cases and outlier cases.”

q Long-stay cases are cases that are 20 inpatient days or more.

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What the New Certification Guidance e New Certification GuDoes NOT Change

q An explicit physician order for inpatient services, signed by a practitioner with admitting privileges prior to patient discharge remains a condition of payment.

q Unless it is an Inpatient Only procedure or admission for newly initiated mechanical ventilation, the admitting practitioner must have an expectation that the patient requires services in the hospital for a period spanning two midnights and the expectation must be supported by the evidence in the medical record.

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Psychiatric Hospitals

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q Recent CMS release on certification addresses unique characteristics of a psychiatric facility.

q Objective “evidence” often absent; thus clinical documentation of presentation, treatment and response to treatment are critical for supporting admission and length of stay.

q Balance issues of “boarding” patients in emergency department when not safe for discharge.

q Certification rules were not changed for inpatient psychiatric facilities or for inpatient rehabilitation facilities.

Time Calculation: 2 Midnights Rule

Look back to when patient first received hospital services (in ER)

Predict how much longer patient will

need hospital care

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Inpatient Admission Order

22-2-Midnights Presumption ((§§ 412.3(e))

q Based on ACTUAL time as an inpatient (not all time)

q “inpatient hospital claims with lengths of stay greater than 2 midnights after the formal admission following the order will be presumed generally appropriate for Part A payment”

q Stays of 1 midnight or less after the formal admission not presumed “reasonable and necessary,” but auditors are to “evaluate the claim pursuant to the two midnight benchmark”

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Critical Determinants

q “It has been longstanding Medicare policy to require physicians to admit . . . as a hospital inpatient based on their expected length of stay”

Ø Based on “…information available to the admitting

practitioner at the time of the admission.”

q “The crux of the medical decision is the choice to keep the beneficiary at the hospital in order to receive services or reduce risk, or discharge the beneficiary home because they may be safely treated through intermittent outpatient visits or some other care.”

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Medically Necessary Outpatient “Observation” Stays

q CMS and the OIG have both indicated that extended outpatient “observation” stays (beyond 2 midnights) are problematic.

q If the patient is expected to require medically necessary care in the facility spanning two midnights, then inpatient admission is appropriate; if the care is not medically necessary then CMS should not be billed for the hospital care (such as the observation services).

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Establishing the Expectation

q “The expectation of the physician should be based on such complex medical factors as patient history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event.”

q “The factors that lead to a particular clinical expectation must be documented in the medical record in order to be granted consideration.”

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No Presumption Regarding Medical Necessity

q “No presumptive weight shall be assigned to the physician’s order under § 412.3 or the physician’s

certification under Subpart B of Part 424 of the chapter in determining the medical necessity of inpatient hospital services under section 1862(a)(1) of the Act.”

q “A physician’s order or certification will be evaluated in the context of the evidence in the medical record.”

q 42 CFR § 412.46(b) (medical record review requirements)

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2014 4 IPPS Final l Rule20144 PPS FinaIP l RuleRSigned Inpatient Order …

q Must be signed and in the medical record prior to discharge.

q Must be signed by a physician who is responsible for the case or has knowledge of the case and has authority to sign.

q Order must be signed by practitioner with admitting privileges AND within the scope of the practitioner’s license.

q Must be supported by the clinical documentation in the medical record.

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Orders for Inpatient Only Procedures

q Change effective April 1, 2015: Inpatient only procedures performed as outpatients may be bundled into the contiguous inpatient stay.

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Inappropriate Considerations

q Patient / Family Inconvenience or Worry

q Custodial Care

Ø Custodial care serves to assist an individual in activities of daily living, such as assistance in walking, getting in and out of bed, bathing, dressing, feeding and using the toilet, preparation of special diets, and supervision of medication that usually can be self-administered.

Ø Custodial care essentially is personal care that does not require the continuing attention of trained medical or paramedical personnel.

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Evolving RAC Rules

q ADR limits to be incrementally applied to new providers under review.

q ADR limits based on provider compliance/denial rates.

q ADR limits to be diversified across all claim types (e.g., inpatient, outpatient).

q Physician opportunity to discuss improper payment identification with the Contractor Medical Director, who is a physician.

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Evolving RAC Rules s (continued)

q RAC look-back period limited to 6 months from the date of service for patient status reviews, on claims submitted within 3 months of the date of service.

q RACs will have 30 days to complete complex reviews and notify providers of their findings --- more immediate feedback.

q RACs must have a Contractor Medical Director and are encouraged to have a specialists panel for consultation.

q RACs must wait 30 days before sending denials to the MAC for adjustment.

Ø Providers will not have to choose between initiating a discussion and an appeal.

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UM and Physician Advisor Checkpoints

q Does the clinical documentation support the physician’s expectation that the patient requires care in the facility for a period spanning two midnights?

ü No presumption, so what is the evidence supporting the need for the stay?

ü Role of evidence based criteria

ü Role of physician advisor and timing of referral to physician advisor

ü Conflicting documentation should be addressed

ü Important to institute inter-rater reliability and quality checks for the reviewers

ü Timing considerations

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Self Auditing Opportunities

q Particular areas of focus for a facility would include;

Ø Inpatient stays of 0-1 days. Did the patient meet the Two Midnight Benchmark? Did the hospital miss an opportunity to get the inpatient order in the chart prior to the first midnight (and thus to obtain a presumption that the care was medically necessary and avoid some future reviews)?

Ø Outpatient Observation stays greater than two midnights. Was inpatient status appropriate? Was the care purely custodial?

Ø Stays where the actual time in the hospital was less than two midnights. Is there documentation as to why the patient did not stay two midnights, such as death, transfer, patient left AMA or patient improved more rapidly than expected?

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Self Auditing Opportunities

Ø Clinical documentation review. Does the clinical documentation support the expectation that care in the hospital was required and that the time frame was appropriate?

Ø Compliance or payment issues previously identified and not monitored routinely,

Ø Aberrancies in normative data such as PEPPER reports,

Ø Issues raised by employees or patients which are not fully resolved,

Ø Arrangements and relationships with medical staff members, and

Ø Areas identified by compliance professionals.

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Specific Requirements for Review

q For surgical cases:

Ø Is the procedure on the inpatient only list?

Ø Consider original procedure AND procedures that began as outpatient procedures that converted to inpatient.

q Be aware of LCDs and NCDs for various specialties.

Ø Examples: total joint replacement, blepharoplasty, ICD, etc.

Ø Should be a process in place to review documentation prior to scheduling elective procedures.

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Commercial Payers

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q Contract specific—what is review process and appeals process.

q Medicare Advantage Plans—contractual relationship but must provide basic Medicare coverage. Consider appeals rights.

q Beneficiaries have expanded appeal rights.

Compliance and Revenue Cycle Services

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q When do UR events occur—prior to admission, prior to second midnight, prior to discharge, prior to bill drop, post bill drop, upon denial?

q Pre-bill determinations—Second look at “high risk” cases. Ideal to review prior to patient discharge for technical compliance with signatures, complete documentation. May want to examine cases post discharge but prior to billing.

q Addressing Denials—use of physician advisors (internal or external), assessment of patterns and feedback of issues,

q MD / Revenue Cycle Liaison.

Conclusion: Challenges

q There are technical inpatient order and (for IPFs, IRFs and longer stays) certification requirements that if not met, preclude inpatient billing. As a threshold requirement, monitoring compliance is imperative.

q Documentation must support the clinical imperative of the expectation of two midnights of care. What is the review process to ensure that the documentation supports the status determination as the patient approaches a second midnight?

q Actual time in the hospital is critical for review purposes. If the patient did not actually stay in the hospital for a period spanning two midnights, does the documentation support the reason for the early discharge?

q CMS has indicated that outpatient with observation stays greater than 2 midnights will be scrutinized. What is happening to outpatient with observation stays? Each stay over two midnights should be scrutinized to ensure that patient status was correct and the process issues that led to extended outpatient observations services, if any.

q CMS has indicated that medical necessity documentation is more critical under the Two Midnights Rule rather than less critical. Because the MD’s conclusion is given no presumptive weight, objective medical necessity documentation must support the inpatient order.

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Conclusion: Challenges

q It is the EXPECTATION that care is required for two midnights that controls, not actual time in the facility. Some facilities have translated the relaxation of the certification requirements to a relaxation of documentation standards generally. This is problematic because the law is clear that the basis for the expectation must be supported by documentation in the medical record. This presents an educational challenge with medical staff and a process challenge for UM and compliance staff.

q Patient status is a time based analysis not an intensity of service analysis. For example, it is possible to have outpatient ICU stays. This is a “sea change” in thought process for physicians and for UM/case management staff. Evidence based criteria may be helpful to review adequacy of clinical documentation and discharge screens may be of assistance, but should not be relied upon because criteria are based generally on intensity of service analysis.

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Continuous Quality Improvement

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q Ask the following questions on a regular basis;

Ø Have we established metrics to evaluate improvement efforts?

Ø Are we accomplishing our goals?

Ø Do our processes support success?

Ø Can we be more effective?

Ø Can we be more efficient?

Ø Are we addressing identified issues with respect to quality, documentation, and billing issues.

Questions?

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Joan C. Ragsdale, JD

Chief Executive Officer

MedManagementntt, LLC

2050505-55-9707070-00-8804

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