News to Note – July 2024

• Richelle Marting, a health care lawyer from Missouri and 2024 National Physician Advisor Conference speaker, recently had a client with  a problem.  They were being denied payment for a specific type of bariatric surgery because the claim did not clear the coding edits.  The problem was that the surgery was being done laparoscopically but the NCD required three codes describing the surgery and one of the three had to be a code for an open surgery.  This made no sense at all and Richelle got to working and got CMS to change the rules, retroactive to 2020!  Congratulations Richelle, that’s an impressive outcome.
• Does “Outpatient in a Bed” require a physician order?  Remember, this is not a status designation, as there is only Inpatient or Outpatient status.  Any patient who has not met the requirements to be an Inpatient is an Outpatient, whether with or without observation services.  The real reason many people ask about Outpatient in a Bed “status” is that they have patients in the hospital who don’t require hospital care and they want to separate them from those with medical necessity for payment and tracking purposes.  Here are a few tips to do just that:

1. It’s commonly believed that patients who undergo outpatient surgery should always go home the same day but this is not true.  While we are getting much better at optimizing care, there are many outpatient surgeries where an overnight stay is absolutely the standard of care in select patients.  Those patients should not be lumped in with the outpatients who are staying overnight because it’s starting to snow, they can’t get a ride home, or they simply request to spend the night.  Feel free to name this “sub-status” anything you want, including “Outpatient in a Bed”.  Many use the term “extended recovery,” but the key is that they are Outpatients, their care is not custodial, and the recovery time should be billed as recovery services.
2. Once an Inpatient, always an Inpatient.  Unless you are a rural or Critical Access Hospital (CAH) and your Inpatient is transitioning to a swing bed, an Inpatient remains an Inpatient until they either die or are formally discharged.  You can’t discharge a patient from Inpatient when their acute care is completed and then create an Outpatient encounter for the custodial care.  This would be great so you could get paid separately for ancillary services, but it’s not allowed.  Rather, you should leave them Inpatient and work with your billing staff to apply the correct occurrence span code to the days that are not medically necessary.

• If “Outpatient in a Bed” is not real, does that mean it’s prohibited?  Absolutely not, feel free to use it for your patients staying overnight because they are waiting for their family to get back from Disney World.  The key is to ensure that when it is ordered, there is communication between the clinical and finance teams so when these Outpatients without medical necessity are in the hospital, everyone knows – the hours and days are properly tracked, and action can be taken to minimize giving away free care. 
• SCAN health plan, a Medicare Advantage (MA) plan, sued Medicare because their star rating dropped from 4.5 to 3.5.  SCAN claimed that Medicare’s method for calculating the rating was contrary to regulations.  They won the case and as a result, they will receive an additional $250 million in bonus payment.  It’s amazing how one star rating is worth that much money, isn’t it?  Imagine the care that could be provided to patients with $250 million.  And, remember that patient complaints affect MA plans’ star rating, as well.  So, when your patient is not happy with their plan for skilled nursing facility (SNF) or inpatient rehabilitation facility (IRF) coverage (or, the lack thereof), advise them to call 1-800-MEDICARE to complain.
• Everyone should know MA plans must follow the Two-Midnight Rule and that hospitals should file complaints when the MA plans blatantly ignore the Rule.  But, many don’t know there are also rules for Medicaid about when inpatient admission is appropriate.
• 42 CFR 440.2 defines an Inpatient as, “a patient who has been admitted to a medical institution as an inpatient on recommendation of a physician or dentist and who receives room, board and professional services in the institution for a 24 hour period or longer…or is expected to stay but does not actually stay in the institution for 24 hours.”  That’s right, no midnights to count, this rule strictly involves 24 hours.
• But, as was discussed at the American College of Physician Advisors’ combined Observation Committee and Pediatrics Committee Town Hall last month, most Medicaid plans, especially Managed Medicaid, ignore this rule.  Their usual argument involves the patient was getting better at 24 hours, so Inpatient admission is not approved or that criteria for Inpatient admission are not met. 
• Maybe it is time for providers to push back.  Remember that “CMS” stands for “Centers for Medicare and Medicaid Services” so when Medicaid plans ignore federal regulations, report them to your CMS regional office.  With enough complaints, CMS will be forced to address this abhorrent behavior. 
• It’s been over six months since the update to the Code of Federal Regulations obligated MA plans to follow the Medicare Two-Midnight Rule.  Have all of the projected outcomes from 2023 come to fruition?  Hardly.  Let’s consider two of them:

1. Denials from MA plans will drop precipitously.
1. This has NOT happened because the Rule doesn’t simply involve passage of a second midnight.  It involves medical necessity of the second midnight.  As much as it seems we have been talking about this incessantly, many continue to apply the concept of medical necessity inappropriately. 
2. While CMS made it clear that MA plans must utilize the Rule, they didn’t include any consequences if they don’t.  Some have recommended filing complaints to CMS, but there isn’t a formal grievance process.  As such, there is technically nothing – at this point – to stop MA plans from electing not to comply with the Rule.  
2. Scores of MA plan medical directors will lose their jobs due to the simplicity of status determination related to application of the Rule and subsequent decline of MA plan denials.
1. Since application of the Rule for MA plans hasn’t resulted in fewer denials, there likely has been no decline in employment opportunities for MA plan medical directors.  In fact, a cursory review of job search engine sites results in plenty of postings for this type of position.

• The problem with “medical necessity” is the term itself. The concept is REALLY, “medically necessary care which can ONLY take place in the hospital setting.”  Physical therapy, oral medications, and assistance with ADLs can all take place outside of the hospital.  
• Passage of a second midnight related to delay in care also doesn’t fit the bill.  If discharge is delayed today because the hospitalist is waiting for cardiology to read an echocardiogram which was performed yesterday – that’s a no brainer.  But, what if a patient with appendicitis presents to the Emergency Department at noon, an uncomplicated laparoscopic appendectomy takes place the following day at 4 PM, and the patient discharges at 7 AM on the third day following an unremarkable recovery?  Was the passage of two midnights medically necessary?  
• Finally, let’s talk about urinary tract infections as a general stand-in condition when considering medical necessity.  You know the drill, “IV Ceftriaxone until urine culture and sensitivities return,” followed by a statement about anticipation of two midnights.  Why is this so common?   Because it generally takes at least two midnights for a urine culture to demonstrate the pathogen and sensitivities to antibiotics.  Why can’t the patient be placed on an oral antibiotic and discharged with follow-up by their primary care provider?  Is there a history of complicated UTIs?  Has the patient been infected with resistant organisms in the past?  If these points are not applicable or documented in the record, medical necessity of two midnights can’t be assured as proven.  
• It's imperative for clinicians, physician advisors, utilization managers, and yes, MA plan medical directors, to understand the Medicare Two-Midnight Rule.  Applying the Rule to any patient who remains hospitalized for at least two midnights is a non-compliant practice.  Don’t create confusion and frustration for your staff.  Utilize the Rule correctly, request additional documentation when warranted to support medical necessity, and find other ways to address discharge delays in your hospital other than attempting to pass them as appropriate Inpatients.  
• There is power in our words.  The wrong word or phrase can negatively influence the way a patient is treated by others.  We no longer say that a patient “denies” a symptom and we avoid the term “drug seeker.”  We are moving away from saying someone is “homeless” and now state they are “unhoused.”  People are not “addicts” but have a “substance abuse disorder.”  Of course, no one is purposefully using such terms in order to negatively affect patient care, but it happens. 
• Medical terminology also changes.  “Congestive heart failure” is being replaced by “heart failure.”  “Central pontine myelinolysis” is now “osmotic demyelination syndrome.”  For many of these new terms, it is easy to determine the meaning and our colleagues can interpret it for patient care issues and coding of claims.  But, clinicians are now starting to document patients “left via patient directed discharge” instead of “against medical advice.”  This new terminology is less stigmatizing but the meaning is not necessarily self-evident.  Was the patient given a choice of going home or going to a SNF and they chose to go home?  Or, was it determined the patient’s home environment was not safe and they insisted on going home despite the risks?  
• Time will tell whether this phrase is adopted more widely but it may be worthwhile to spread the word amongst your case management, utilization review, coding, quality, and compliance staff so they are aware.  It should be noted that a patient who departs as a “self-directed discharge” when the patient is insisting on an unsafe discharge plan can still be coded as departing against medical advice.  There is no regulatory requirement that the exact words, “against medical advice” must appear in the medical record when applicable.  
• Of course, the documentation from the physician must indicate that they advised continuing hospital care or discharge to a different destination than what was chosen by the patient.  As ACPA Update Editor, Dr. Ronald Hirch, described in a previous RACmonitor article, coding a claim as “against medical advice” has important implications and one does not want to miss the opportunity to most accurately report the patient’s course of care.