Inpatient Facility Coding & Compliance Alert

Here’s the scoop from the latest CMS provider call.

The FY 2014 Inpatient Prospective Payment System (IPPS) final rule gave providers a definition of what constitutes an “appropriate” inpatient admission—when a patient needs to stay at your hospital for over at least two midnights. Several CMS staff members further clarified the definition in a National Provider Call on January 14. Read on for some of the biggest take-aways from “2-Midnight Benchmark for Inpatient Hospital Admissions.”

Begin by Understanding the Baseline

Surgical procedures, diagnostic tests, and other treatments are generally appropriate for inpatient hospital payment under Medicare Part A when the circumstances meet two criteria:

• The physician expects the patient to require a stay that crosses at least 2 midnights, and
• The physician admits the patient to the hospital based on that expectation.

“The converse to this rule, which is that surgical procedures, diagnostic tests, and other treatments are generally inappropriate for inpatient hospital payment under Medicare Part A when the physician expects to keep the patient in the hospital for only a limited period of time that does not cross two midnights,” explained Jennifer Dupee, a nurse consultant with the CMS Provider Compliance Group. “In these cases, we anticipate that such services would be submitted for Part B payment,” she added.

Know When Unforeseen Circumstances Are Legitimate

“You can see from the language used that this is highly based on the physician’s expectation,” Dupee said. “And as such, we recognize that there can be circumstances that interrupt an otherwise appropriate expectation.”

CMS states that unforeseen circumstances may lead to a shorter beneficiary stay than the physician’s original expectation for a hospital stay of more than two midnights. A few potential scenarios that could qualify as unforeseen circumstances include:

- Unforeseen patient death
- Unforeseen transfer to another hospital or facility
- Unforeseen departure from the hospital against medical advice
-Unforeseen recovery
- Unforeseen election of hospice care that results in patient discharge before two midnights have passed.

“Keep in mind that this is not an all-inclusive list,” Dupee said. “But in these cases, claims may be considered appropriate for hospital inpatient payment.”

Important: The physician’s expectation in any of these unforeseen interruptions in care must be documented in the medical record before they can be taken into account upon review.

Scenario: A 50-year-old male presents to the emergency department on Jan. 1 at 10 p.m., complaining of nausea, vomiting, dehydration, and renal insufficiency. He has a history of cancer with probable metastases. A physician evaluates the patient and orders diagnostic and therapeutic modalities. On Jan. 2 at 4 a.m., the physician writes an admission order, based on his expectation that the patient will need to stay in the hospital for at least two midnights. At 9 a.m., however, an appropriate designee (and family member) discusses the patient’s desire to move into hospice care. The patient is discharged at 3 p.m. with home hospice.

Billing: The hospital can bill this claim for inpatient Part A payment. The claim represents inpatient services that span only one midnight, but includes an unforeseen circumstance that interrupted an otherwise reasonable admission based on the physician’s expectation for hospital care lasting two or more midnights (assuming the expectation and unforeseen circumstance were adequately documented in the medical record).

Watch for Possible Rule Exceptions

Some exceptions to the 2-Midnight Rule do apply, so don’t let those opportunities slip past.

Distinguishing point: Dupee spent time during the call clarifying how CMS differentiates exceptions from unforeseen circumstances.

“With the unforeseen circumstances, there is an expectation that the patient will require a 2-midnight stay when the inpatient order is written,” she explained. “With these exceptions, we are saying that an inpatient hospital admission will be appropriate even if the physician does not have an expectation that the patient may require a 2-midnight stay. The patient could stay for either no midnights or one midnight, and it would still be an appropriate inpatient admission.”

The definition of “exception” includes medically necessary procedures on the inpatient-only list, as well as other circumstances that could be approved by CMS at a later date and outlined in sub-regulatory guidance. Previous terminology classified these scenarios as “rare and unusual circumstances.”

As of the call date, CMS had identified one exceptional circumstance – New Onset Mechanical Ventilation. This exception, however, does not apply to anticipated intubations that are related to minor surgical procedures or other treatments, Dupee said.

Input: CMS is inviting feedback regarding other exceptions that might be appropriate to qualify for an inpatient admission after a short inpatient stay. You can email IPPSAdmissions@cms.hhs.gov with “Suggested exception” as the subject line.

Next month: The speakers also discussed how CMS will review claims under the 2-Midnight Rule, including when hospital time begins and medical necessity. Check out next month’s issue of Inpatient Facility Coding and Compliance Alert for more details.