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Medicare Compliance & Reimbursement

Industry Notes:

$6 Million Question for Denver Hospital -- 'Observation,' 'Inpatient,' Or 'Outpatient'?

Published on Tue Jan 31, 2012

When your physician admits a patient to the hospital, your coding work isn't done -- you need to know whether the patient was admitted as an inpatient, admitted to observation care, or admitted to the ER (which qualifies as outpatient care). That differentiation cost a Denver hospital over $6 million recently.

Based on a whistleblower lawsuit, the OIG investigated the admission practices of a Denver hospital, which was alleged to be inappropriately admitting patients as "inpatients" when the patients were actually in outpatient or observation status. As most coders know, inpatient reimbursement can typically be higher than outpatient or observation pay.

The hospital agreed to pay $6.3 million to resolve the allegations of impropriety, which occurred between Jan. 1, 2006 and Dec. 31, 2009, according to a Jan. 5 Colorado Attorney General press release.

"It is crucially important for government health care plans to be efficient as possible," said U.S. Attorney John Walsh in the statement. "This case serves as a reminder that hospitals must scrutinize their billing practices to prevent overbilling. I want to thank the excellent work of agents with the Health and Human Services Office of the Inspector General and the Colorado Attorney General's Medicaid Fraud Control Unit for bringing this matter to a successful conclusion."

To read the complete release, visit www.coloradoattorneygeneral.gov/press/news/2012/01/05/denver_health_medical_center_pay_63_million_settle_allegations_relating_overbi.

Check Out What Your RACs Are Reviewing These Days

When the Recovery Audit Contractor (RAC) system first began, providers stayed very well-connected to the review issues, but as time passed, some practices stopped paying attention. However, RACs continue to add new issues to their target lists, and it's incumbent upon you to keep track of the issues at hand.

For example: DCS Healthcare, the RAC for seven states in the Northeast, announced on Jan. 6 that it is reviewing overpayments made for E/M services billed without modifier 25 on the same date as allergy testing or allergen immunotherapy. "Claims having a 'claim paid date' which is more than three years prior to the ADR date will be excluded," DCS notes.

That same RAC has also been working to identify overpayments made by practices that billed more than one new patient E/M visit (such as 99201-99205) for the same patient within a three-year time period.

CGI Federal, the RAC which handles review for seven Midwestern states, has been identifying surgery claims reported by two physicians when one doctor appended modifier 62 (Co-surgery) and the other did not.

CGI is also reviewing add-on codes to find instances when MACs paid for add-on codes "when the required primary procedure either was not reported or was not paid for other reasons."

A third RAC (Connolly), which handles issues for 17 states, is currently reviewing global period billing following major surgeries when the claims don't include modifiers 58, 78, or 79.

Connolly is also reviewing claims that include a CPT® code for chemotherapy administration but don't include the corresponding medication administered.

And the fourth RAC, HealthDataInsights (HDI), which covers 17 states and 4 U.S. territories, is looking at several additional issues. For instance, HDI is reviewing claims for outpatient E/M services (99201-99215) erroneously being billed for patients who are inpatients.

HDI is also looking at claims for services which appear to be rendered after a patient's date of death.

Don't Waste Your Time With An Extra Home Health Face-To-Face Visit When You Don't Have To

That's the takeaway from a recent question-and-answer issued by Medicare Administrative Contractor NHIC. "If a home health patient is admitted twice within the same 90-day period for the same reason, can the first face-to-face encounter documentation be used for both admissions?" asked a home health agency in NHIC's Aug. 3 Ask the Contractor Teleconference.

"In this instance, the same face-to-face encounter could be utilized for both home health admissions," NHIC replies in the ACT summary.

But home health agencies may not like another of NHIC's answers to a F2F question quite as much. "If a home health patient was scheduled to have the face-to-face encounter on day 10, but transferred to hospice on day eight, and is now refusing to go to the doctor for the home health face-to-face encounter, would this be considered an exceptional circumstance?" a provider asked in the conference.

"The face-to-face encounter is a requirement for payment," NHIC says. "The home health services could not be billed if it does not occur."

NHIC also reminds providers that they must have the signed F2F documentation in hand before billing Medicare for an episode. "You cannot bill Medicare until you have the signed documentation," NHIC explains. "The face-to-face encounter is part of the re-certification."

Resource: The four-page ACT summary is online at www.medicarenhic.com/RHHI/billing/J14%20HHH%20ACT8311QAs.pdf.

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