News to Note – March 2023

• Every Medicare inpatient gets the Important Message from Medicare (IM) outlining their right to appeal their discharge and it seems more and more patients are taking advantage of that opportunity. In data from 2019, one Quality Improvement Organization (QIO) received over 5,000 discharge appeals and approximately 89% of those appeals ruled in favor of the hospital. But, to take advantage of all protections provided to the patient during the appeal process, the patient must appeal by midnight on the day they were informed of their discharge. They are welcome to appeal after midnight, but they don’t keep all their protections.
• If the patient files a timely appeal and loses, they can stay in the hospital until noon on the day after the decision is conveyed by the QIO before they start owing the hospital money. But, if they don’t appeal by midnight, they have no such waiver of liability and their appeal is considered untimely. Not only does that give the QIO an extra day to make a determination, with two days instead of noon the day after they receive records, but if you present a Hospital-Issued Notice of Noncoverage 12 (HINN 12) before midnight and they do not appeal by midnight, you can start charging the patient as of 12:01 AM.
• How do you operationalize this? Other than asking someone to stay and wait until midnight to see if the patient calls the QIO, you can wait until the end of the work day and if they have not called, give the HINN 12. If the patient ends up appealing, the HINN 12 will be invalid. If not, send in the finance folks in the morning to start making arrangements.
• As for another patient notice, if you provide an Advance Beneficiary Notice (ABN) to a patient for an outpatient service and they sign it agreeing to pay, the hospital billers should place a GA modifier on the claim. This informs the MAC that a signed ABN is on file at the hospital. It turns out that even with that GA modifier, over the period of a single year, over 90% of those claims were actually paid by the MAC without any manual review at all. You read that right – the provider did not think it was a covered service, the patient agreed to pay the full price for the service, and the MAC still paid it.
• This waste of Medicare money shouldn’t be too big of a surprise, unfortunately. In 2011, the Office of the Inspector General (OIG) audited this situation and found CMS paid over $7,000,000 in such claims and told CMS to fix this which doesn’t seem to have happened.
• But, there is another side of this that should be noted. When an ABN is completed, the provider indicates the chargemaster price for the service and that is what the patient agrees to pay. When the MAC pays it, the hospital gets the Medicare rate for the service which is likely a small fraction of the chargemaster rate. So, in being paid by the MAC, the hospitals are actually losing money they would have been paid by the patient.
• During the Centers for Medicare and Medicaid Services (CMS) Hospital Open Door Forum last month, ACPA Update Editor, Dr. Ronald Hirsch, asked CMS to clarify if the rules about Medicare Advantage (MA) plans abiding by the Two Midnight Rule are already in place, shouldn’t they be followed today? The response was that there was no one from CMS on the call that could provide the answer but they would get back to him. He has assured us he will continue to pester CMS all year until they give an answer as there is no reason we should have to wait until next January.
• CMS recently posted data from 2019 Recovery Audit Contractor (RAC) activity. In that year, the RACs performed 168,000 reviews and denied 35,000 for a 20.8% denial rate.
• Of those denials, almost 20,000 were appealed at the first level to the Medicare Administrative Contractor (MAC) with 56% ruled partially or fully in favor of the provider.
• At the second level, the Qualified Independent Contractor (QIC), the RACs continued not to do very well. 33% of denials taken to the QIC were overturned in favor of the provider.
• 18,000 cases were appealed to the Administrative Law Judge (ALJ) with 27% of cases dismissed with no explanation provided, 0.3% of cases remanded back, and 37% of cases decided in favor of the provider.
• Finally, 525 cases went to the Department Appeals Board with only two decisions in favor of the provider and most of the rest dismissed or withdrawn.
• The RACs also reported their accuracy rate. The rates range from 94.6% to 99.6% and determine their contingency fee rate, with every percentage point over 95 leading to a 0.2% increase in their fee. But, how do they have an accuracy rate that high yet 56% of their denials are reversed at level 1? That sure sounds like a 44% accuracy rate.
• The worst performing RAC was HMS (Gainwell). Some have complained about how they perform Medicaid RAC audits and sure enough, there is a seven-page instruction manual on how to submit an appeal. If you appeal a denial and write, “your denial” it will apparently be rejected because the initial denial was from a different department, not the department receiving the appeal letter. If the records are received in the wrong order, the appeal will also be rejected. Yikes.
• Recently, a newsletter was sent out by one of the MACs about how they intervened in a hospitalized patient’s case. The patient was admitted with chest pain and elevated blood pressure. Testing was done and medication started. When after three days the patient was told they were being discharged, the wife called the MAC noting her husband’s blood pressure was still not normal and she felt he needed more time in the hospital.  It was not clear from the MAC’s description if this was a formal discharge appeal or simply a complaint about care but nonetheless, the MAC intervened and either convinced the doctor to let the patient stay another day, or ruled in favor of the patient and mandated the continuing stay. How was this the correct course of action?
• First of all, three days to work up chest pain is more than enough time for that evaluation. But, we don’t have the records to know if it was an appropriate inpatient admission or should have been a one-day outpatient stay with Observation services. More importantly, the medical goal is not to get the patient’s blood pressure to normal in three days. In fact, that’s more likely to lead to over-treatment and risk development of hypotension with all of its accompanying dangers to the patient.
• Secondly, there is no ICD-10 diagnosis code for “spouse discomfort with discharge.” That’s just not a valid reason for a continued stay. And, with widespread issues involving Emergency Department (ED) boarding, this patient inappropriately occupied an inpatient bed needed by another patient. I doubt the contractor inquired about how many patients were boarding in the ED.
• And, what if that patient got up at night to use the bathroom, fell, and broke a hip during that medically-unnecessary final midnight? Would the MAC face any consequences? Not a chance. Hospitals are for sick people – end of story. This MAC was wrong to intervene as they did and wrong to call this a “success story.” 
• Not too long ago, an Inpatient Rehabilitation Facility (IRF) obtained authorization to admit a Medicare Advantage patient, provided excellent care, and ultimately the patient no longer needed that level of intensity of care. As such, they arranged for transfer to a Skilled Nursing Facility (SNF) to continue the patient’s recovery. Like in a hospital, they provided the follow up IM and informed the patient. The patient appealed to the QIO and the QIO sided with the IRF. From there, the patient called their MA plan and the MA plan accepted the appeal and sided with the patient. What gives?
• It’s important to note that if a patient appeals to the QIO, they are not allowed to appeal to their MA plan. They can appeal again, but only thru the QIO. The MA plan should have directed the patient back to the QIO.
• It seems the MA plan knew this patient did not meet IRF requirements and their decision was based on payment. The MA plan was paying the IRF a per-admission rate and they did not want to have to pay for a SNF stay as well. So, they said the patient could stay at the IRF and they would “continue to pay.” Beware of these games.