Inpatient Facility Coding & Compliance Alert

Know your facts on how CMS will scan LTCH reimbursement from now on.

The HHS Office of Inspector General (OIG) released a report on June 6 that analyzes overpayments under the Medicare’s Interrupted-Stay Policy for long-term care hospitals (LTCHs). If you work in an LTCH, reimbursement is likely to face detailed scrutiny from  CMS now on.

According to the OIG, Medicare paid $10.3 billion to 449 LTCHs for services rendered to about 254,000 patients from 2010 to 2011. LTCHs provide health care services to patients with multiple health problems of complicated nature and these services tend to be quite expensive.

Know What Constitutes a “Single Stay”

The Medicare LTCH interrupted-stay policy considers time spent at an LTCH before and after an interruption as a single stay, rather than considering the second portion of the LTCH stay to be readmission and thus paying for two separate days. However, this applies only if the patient returns within a specific number of days known as the “fixed day period,” failing which the revisit would be counted as a second stay. This policy would also not apply to patients receiving services from multiple providers in between-known as “intervening facilities.”

With a mission to rationalize the expenditure on LTCHs, OIG analyzed the claims data of the year 2010 and 2011 received from LTCHs and intervening facilities. 

A whopping $4.3 million in inappropriate payments went to LTCHs and intervening facilities during that time frame. As many as 59 LTCHs had a high number of readmissions immediately after the fixed day period and 24 LTCHs had a high number of readmissions following multiple short stays at intervening facilities. Medicare paid $12 million and $3.1 million, respectively, for these readmissions. The OIG has now recommended that the CMS should take several steps in response to the report:

1) Review existing safeguards to determine whether additional action is needed to prevent future inappropriate payments for interrupted stays.
2) Conduct additional analysis to know the extent to which financial incentives determine LTCHs’ readmission decisions.
3) Develop a system to enforce the 5-percent readmission threshold (i.e., the number of readmissions exceeding by five percent of the total admissions).
4) Take appropriate action regarding LTCHs exhibiting certain readmission patterns.
5) Take appropriate action on inappropriate payments and overpayments HHS identified.

For more information, visit: https://oig.hhs.gov/oei/reports/oei-04-12-00490.asp.
For the complete report read: https://oig.hhs.gov/oei/reports/oei-04-12-00491.pdf.