The 2 Midnight Rule Surviving to Thriving May 15, 2014 Presented by Dr. Sandra M. Terra, DHS, MS, BSN, RNBC, CCM, CPHQ Brian Pisarsky MHA, BS, RN, ACM BRG Introduction Berkeley Research Group (BRG) is an expert services consulting firm with over 400 professionals and 19 offices. BRG’s Healthcare consultants have worked on engagements at hospitals and health systems throughout the United States. Healthcare Provider Practice Areas •Clinical Economics •Corporate Compliance •Financial Advisory •Disputes and Investigations •Healthcare Policy and Reform •Hospital Performance Improvement •Healthcare Construction Transformational Performance Improvement BRG helps hospitals improve operating performance and plan for tomorrow’s healthcare environment The 2MN Rule – What is it? Effective October 1st, 2013 The Centers for Medicare and Medicaid (CMS) new rule REQUIRES hospitals to apply guidelines for inpatient and observation status differently than before. This Rule can be confusing and is contrary to what we have done before. New sub regulatory rules were written to govern this Rule. The intent of the Rule is to minimize the Outpatient (Part B) copay impact on the Medicare Beneficiary, reduce multiple day Observation stays and to help clarify when Inpatient (Part A) services are appropriate. The Rule also imposes a 2% payment cut to inpatient admissions for Medicare Fee For Service patients admitted after October 1, 2013 to compensate for what CMS believes will be an increase in reimbursement. CMS Final Rule The Centers for Medicare & Medicaid Services (CMS) final rule (CMS-1599-F) updates Medicare payment policies. The final rule: o modifies and clarifies CMS’s longstanding policy on how Medicare contractors (including RAC auditors) review inpatient hospital admissions for payment purposes. Under this final rule, surgical procedures, diagnostic tests and other treatments (in addition to services designated as inpatientonly), are generally appropriate for inpatient hospital admission and payment under Medicare Part A when (1) the physician expects the beneficiary to require a stay that crosses at least two midnights and (2) Admits the beneficiary to the hospital based upon that expectation. 2 MN Benchmark vs. Presumption 2 MN Benchmark (clinical) 2 MN Presumption (auditor) Physicians should generally admit as inpatients beneficiaries they expect will require 2 or more midnights of hospital services, and should treat most other beneficiaries on an outpatient basis. The clock starts when care begins – after registration and triage vital signs in an outpatient setting. This can include time spent in another hospital but not ambulance transport time from that hospital The 2-midnight presumption directs medical reviewers (auditors) to select Part A claims for review under a presumption that the occurrence of 2 midnights after formal inpatient hospital admission pursuant to a physician order indicates an appropriate inpatient status for a reasonable and necessary Part A claim. CMS-1599-F Timeline • August 2, 2013 – Final rule published • August 19, 2013 – CMS holds open door forum. Many questions raised • Sept 5, 2013 – CMS issued further guidance on the Physician order and Certification • Sept 18, 2013 – AHA sent a letter to CMS asking to delay the effective date based on the perceived ubiquity of the Rule and the 2% reimbursement cut • Sept 26, 2013 – CMS held 2nd open door forum. Still many unanswered questions. CMS stated that they will continue to issue further guidance. • October 1,2013-Gov’t . Shut down and furlough stopped any further clarification from CMS CMS-1599-F Timeline, con’t • November 27, 2013 – CMS publishes guidance on the medical review of inpatient hospital claims • February 24, 2014 – CMS produces an inpatient hospital probe and educate update and extends the 120 day timeframe for appeal/redetermination of those claims which were denied under the educate and probe process. The educate and probe process is extended to September 30 2014 • March 12, 2014 – Guidance for Auditors is issued by CMS changing claim selection guidelines (again) • March 27, 2014 – Another extension until March 31, 2015 Perspectives The key stakeholders all see something from a different perspective CMS View • Beneficiary protection. o Despite a flawed rule, they don’t want patients lingering without decisions beyond 2- midnights. • They wish to provide time boundaries to providers. • They worry about 24-48 hour, inappropriately billed stays, i.e., waste. • Hospitals will bill more, not less, short inpatient stays. Pay reductions and penalties will level the field. Hospital View • • • • • Increased staff to oversee OBS, audit, and documentation efforts Prospective and retrospective changes in financial billing status (observation vs inpatient) with no clear guideline Angering patients and HCAHPS scores with all (essentially) stays under 48 hours as outpatient and subject to the co-pays Readmissions—how to utilize rule to best assist patients and hospitals (under readmit scrutiny) Revenue loss—some justified, some not. o CMS feels rule will increase hospital revenue. Hospitals see things differently. Physicians View • Documentation burden: o expected stay–need vs. appropriate o status on admission orders o CLEAR documentation! • Advocate for hospital or patient o pressure at MN or “48-hr” mark? • Coding and fraud— mindful of inpatient and observation billing • New work flow driven by documentation requirements Beneficiary View • • • • • Existing confusion about inpatient vs. outpatient Perceptions of care o Care by the clock o Does service suffer (lower value care)? Advanced beneficiary notice (ABN) o patients need to know their status. If OBS, the sooner patient out, less cost to them (Part B FFS)… o Longer OBS stays are more costly than short inpatient stay (Part A FFS). 3 night SNF rule. No bridge to post-acute care if inpatient status not declared. What the 2MN Rule Changes Before • Inpatient Medical Necessity • Arbitrary application of clinical criteria by Auditors • Unclear regulations governing inpatient vs. outpatient • Long outpatient observation stays • Minimal physician documentation • High Beneficiary co-pay costs • Review all cases against clinical criteria After • All medically necessary care • No more 1 day stays except: o o o o o “Inpatient only” list Acute to acute transfers AMA Death Unanticipated early recovery • Auditor focus on o ‘gaming’ the system o Unnecessary delays in service o Physician documentation Other Changes • Increase in revenue • New Occurrence Code (72) 12/1/2013 o Contiguous outpatient hospital services that preceded the inpatient admission” to be reported on inpatient claims • Shift in coding staff mix • Case Management & CDI personnel focus • Decrease in Physician Advisor activity • Increased burden on the physician for documentation of clinical judgment • New focus on delay in service Major Billing Changes • Redefining of Occurrence Code 72. o Now alerts CMS that outpatient services were provided prior to admission to an inpatient status (transmittal 1334, published date 2014) • Self denial without penalty during the Probe and Educate period o Now extended to March 31, 2015 o Process to ensure review of all MC FFS inpatient claims • Appeal for all services provided if billing under Part B o Bill for all services including IV fluids, associated nursing care as you would be billing for OBS o MUST follow NCD/LCD documentation requirements (start & stop times) • If a patient stays under 24 hours but at least 12 hours bill as extended visit and management for flat fee Impact on Coder Mix and CDI Coder Mix Clinical Documentation • More inpatient means less outpatient o Inpatient coding approximately 4 per hour o Outpatient coding approximately 6-8 per hour • More cases to review o Inpatient initial record approximately 40 minutes to 1 hour • Increased focus on components of physician certification documentation requirements including medical necessity and discharge plan The Role of Case Management • Decreased emphasis on 1st Level Reviewer Activities against selected clinical criteria o Guidance now comes from the physician, clinical documentation and estimated day of discharge • Increased emphasis on physician certification documentation, discharge plan and recertification if necessary o Reinforce physician education about the Rule • Capture of Avoidable days to identify delay in service o Patient and Physician convenience will be under closer scrutiny • No services on the weekends (facility issue) • Holding patients for specialist consultant exam Concerns Concerns • Auditor behavior o Probe and educate o Pre-payment/MAC o RAC • Physician documentation o o o o o Admission order SIGNED before discharge by the ordering physician Certification Statement Medical Necessity Discharge Plan Recertification as needed • Financial penalties for services that recovery auditors deem should have been documented as outpatient services • Overall 2% reduction in inpatient reimbursement Probe and Educate Probe and Educate • CMS has instituted a Probe and Educate program. That program has been extended several times. Primarily because the auditors inappropriately denied many claims. The exact concern most have about the Rule. o Some initial pre-payment reviews were incorrectly denied. Many of those claims are still unresolved o The MACs are still required to perform prepayment review of 10 (or 25 for large hospitals) claims from all applicable providers within their jurisdiction to ensure compliance with CMS-1599-F. o Hospitals that have 0 – 1 errors identified in the initial group of claims selected will be considered to be applying the new rule correctly. • The MAC will cease further reviews for these hospitals o Hospitals that have errors identified will receive education Probe and Educate Results (2/7/2014) • 29,158 records requested, 18,110 received, 6,012 reviews completed. These reviewed records will be re-reviewed under new guidance from CMS • Missing or Flawed Order for Inpatient Admission • Short-stay procedures not in the inpatient only list • Short stay for medical conditions MOST IMPORTANT • Physician Attestation statement without supporting documentation o Certification language states “2 Midnights” o Documentation stated “D/C in the AM” The Auditors The primary concern centers on the various regulatory auditors and how they will adjudicate payment under the 2 MN Rule. Historically, hospitals have not fared well under the retrospective nature of the auditors and are dubious that the guidelines and instructions will be correctly applied. Failure on the part of the auditors to adjudicate under the Probe and Educate period has only strengthen this concern. CASE STUDY # 1: FLAWED PHYSICAN ORDER • • • • • • • • • • 10/22/2013 75 year old female with history of chronic heart failure, COPD and arrhythmia, presents via the ED for complaints of dizziness. She reports working in her garden for most of the day. Onset of symptoms around 5 pm caused her to stop gardening and sit down. Symptoms not resolving, she proceeds to the ED driven by her neighbor. 7:30 PM triaged and vital signs taken. BP=105/62, HR=66, RR=20 7:45 PM patient is seen by the ED physician. She continues to complain of some dizziness but reports she has improved since arriving in the ED. 500 cc IV bolus NS infused. Patient reports improvement 8:45 PM patient given regular dinner tray. Reports some slight dizziness with nausea 9:45 PM Hospitalist re-examines the patient and writes an order certifying a 2 midnight stay for syncope. 10/23/2013 0730 AM Progress note: patient stable throughout night. Reports much improved. Physician order to discharge after regular lunch if tolerates. 100 PM patient discharged to home accompanied by neighbor This claim is billed as Part A based upon physician order. Upon selection for Probe and Educate this claim may be denied and deemed appropriate for outpatient observation. The claim is recoded as outpatient observation and resubmitted for payment under Part B. The MAC, RAC, MIC’s etc. Auditor Instructions • CMS has instructed the Auditors to assess three things: o The admission order requirements, o The certification requirements, and o The 2 midnight benchmark • CMS also instructed the Medicare Administrative Contractors (MACs) and Recovery Auditors that they are not to review claims spanning more than two midnights after admission for a determination of whether the inpatient hospital admission and patient status was appropriate • The Medicare review contractor will count only medically necessary services responsive to the beneficiary's clinical presentation as performed by medical personnel when determining if the ‘benchmark’ of 2 midnights has been met Audit Reviews • Initially, CMS instructed the MACs and Recovery Auditors not to review claims spanning more than two midnights after admission for appropriateness of patient status during the implementation period of October 1, 2013 until December 31, 2013 • Currently, CMS will not conduct post-payment patient status reviews for claims with dates of admission October 1, 2013 through March 31, 2015. • CMS will conduct prepayment patient status probe reviews for dates of admission on or after October 1, 2013 but before March 31, 2014 • Recovery Auditors may conduct automated reviews or complex reviews, for previously approved issues unrelated to CMS-1599-F for dates of services prior to October 1, 2013, which may continue through June 1, 2014. Recovery Audit Contractors • For a period of 12 months, CMS will not permit Recovery Auditors to conduct patient status reviews on inpatient claims with dates of admission between October 1, 2013 and March 31, 2015 o These reviews will be disallowed permanently; that is, the Recovery Auditors will never be allowed to conduct patient status reviews for inpatient medical necessity on claims with dates of admission during that time period. • In addition, CMS will not permit Recovery Auditors to review inpatient admissions of less than 2 midnights after formal inpatient admission that occur between October 1, 2013 and March 31, 2015 Auditor Red Flags • 1 day stays not on the “inpatient only” list o Missing occurrence code 72 can contribute to selection • An increase in 2 days stays • An increase in 3 day stays with a discharge to SNF • Routinely converting patients to inpatient on the day of discharge o Occurrence code 72 with no room and board charges • Delays in Care o No service on the weekend o Patients held for physician specialty consult Auditor Claim Selection (the presumption) • Describes whether claims will be selected for review under the 2-midnight rule • If a claim shows 2 or more midnights after formal inpatient admission begins, the contractor will presume for claim selection purposes that inpatient admission is appropriate. This claim will not be the focus of medical review. • Exception: Will monitor claim patterns for evidence of systematic gaming or abuse, such as unnecessary delays in the provision of care to surpass 2 inpatient midnights Case Study #2: Admit from Physician Office • • • • A 80 year-old woman presents to her primary care physician’s office not feeling well. Past medical history is significant for chronic obstructive pulmonary disease and the patient is on multiple medications. She has experienced increasing shortness of breath for several days. 10/1/2013 6:00 pm - Patient is evaluated by primary and sent to the hospital for further evaluation via ambulance. 9:00 pm – Upon arrival at the hospital the admitting practitioner confirms the suspected diagnosis and admits the beneficiary based on the expectation that the patient’s care will span at least 2 midnights. • • 10/2/2013 -10/4/2013 •Patient continues to receive medically necessary hospital level of care/services. • • 10/5/2013 •9:00 am - Patient is discharged home. • Hospital may bill this claim for inpatient Part A payment. Claim will demonstrate 2 midnights of inpatient services. Review contractors may not select this claim for review as it is subject to the “presumption.” Case Study #3: ED presentation • • • • • • • • • • • • 68 year-old man presents to the ED with several day history of urinary symptoms, vague intermittent abdominal discomfort, “gassy” and “feverish” feeling over the past several days, and intermittent chills and nausea without vomiting. Patient on oral medications for constipation, hypertension, cholesterol, and diabetes. Patient complains that he is not feeling like himself – no appetite, tired, “maybe a touch of the flu”. No other complaints. 10/1/2013 10:00 pm - Patient is triaged. 10:10 pm - Urine sample and glucometer reading obtained and patient sent to the waiting room. 11:00 pm - MD assesses patient, orders therapeutic/additional diagnostic modalities. 12:00 am - Patient with new complaint of chest pain – additional therapeutic/diagnostic modalities ordered. 10/2/2013 •12:15 am – MD re-evaluates and determines a need for medically necessary hospital level of care/services for this patient to beyond midnight #2. •12:35 am – Formal order/admission provided. 10/3/2013 •7:35 am: Patient is discharged home. Hospital may bill this claim for inpatient Part A payment. Claim will demonstrate 1 midnight of outpatient services and 1 midnight of inpatient services. This claim may be selected for medical review, but should be deemed appropriate for inpatient Part A payment so long as the documentation and other requirements are met. Documentation Physician Documentation The Rule does not have the previous caveat of “Acute or Inpatient Medically Necessary” simply “Medically Necessary” services. All services that are not considered custodial fall under this definition with appropriate and complete physician documentation. The key is appropriate and complete physician documentation. Documentation in the medical record must support a reasonable expectation of the need for the beneficiary to require a medically necessary stay lasting at least two midnights. Documentation Changes • Documentation MUST include Factors that support a reasonable expectation of the duration of stay to exceed 2 Midnights. o Factors may include: • The physician expectation that the patient will require care spanning at least two midnights. o Medical History o Comorbidities o Severity of signs/symptoms o Current medical needs (i.e., IV diuretics) o Risk of an adverse event during the time period of hospitalization Documentation Changes • There has always been a requirement for appropriate clinical documentation to justify an inpatient level of care. The documentation requirements under the 2 MN Rule will be much stricter than before. o The Rule REQUIRES a physician signature on any verbal or telephone orders BEFORE discharge • No more 30 days or even 72 hours • Medical Staff by-laws might need to be changed • The Probe and Educate data shows denial of claims (as inpatient) for this specific reason Case Study # 4: Flawed Physician Order • • • • • • • • • • 80 year-old patient presents from home to the ED on a Saturday with clinical presentation consistent with an acute exacerbation of chronic congestive heart failure. She is short of breath and hypoxic with ambulation. The physician determines that she will require hospital care for diuresis and monitoring, however it is unclear at presentation whether she will require 1 or 2 midnights of hospital care. 12/7/2013 9:00 pm – Patient begins receiving medically necessary services in the ED. She shows evidence of fluid overload, requiring intravenous diuresis and supplemental oxygen and continuous monitoring. 11:00 pm – Intravenous diuretics are provided and an order for observation services is written with a plan to re-evaluate her within 24 hours for the need for continued hospital care or discharge to home. 12/8/2013 9:00 am - She remains short of breath and hypoxic with ambulation, requiring additional intravenous diuresis and supplemental oxygen. 5:00 pm – She continues to respond to diuretics but remains short of breath and hypoxic with ambulation, requiring additional intravenous diuresis for another 12 to 24 hours. VERBAL Inpatient admission order is written based on the expectation that the patient will require at least 1 more midnight in the hospital for medically necessary hospital care. 12/9/2013 •10:00 am - The patient’s acute CHF exacerbation is resolved and she is discharged home. 12/10/2013 200PM – The attending physician signs and dates the admission order Additional l CASE STUDIES Case Study #5: Admission to the ICU • • • • • • • • • 73 year-old male with an accidental environmental toxic exposure presents to the ED. 12/1/2013 9:00 am - Patient arrives by ambulance to the ED. Patient is awake and alert. 9:03 am - Poison control/POISONINDEX consulted, which advises that patient requires telemetry monitoring; plan to intubate if necessary. Small hospital facility, telemetry monitoring is only available in the intensive care unit. 9:07 am - Therapeutic and diagnostic modalities have all been ordered and initiated. Patient airway intact. 10:00 am - MD requests transfer to ICU for telemetry monitoring. Unclear to the physician if this patient will need medically necessary hospital level care/services for 2 or more midnights. Determination will be dependent on clinical presentation and results of diagnostic and therapeutic modalities. 12/2/2013 10:30am - Medical concerns/ sequelae resolving; airway remained intact absent mechanical intervention. 12:00pm - Physician writes orders to discharge home. Hospital should bill for outpatient services. Location of care in the hospital does not dictate patient status. The patient’s expected length of stay was unclear upon presentation and the physician appropriately kept the patient as an outpatient because an expectation of care passing 2 midnights never developed. No other circumstance was applicable. Case Study #6: Unforeseen circumstances • • • • • • • • Disabled 50 year-old man presents to ED from home with history of cancer, now with probable metastases and various complaints, including nausea and vomiting, dehydration and renal insufficiency. 1/1/2014 10:00 pm - presents to the ED at which time the admitting provider evaluates and orders diagnostic/therapeutic modalities. 1/2/2014 4:00 am - Physician writes an order to admit. Patient is formally admitted with the expectation of medically necessary hospital level of care/services for 2 or more midnights. 9:00 am - Appropriate designee and the family discuss with the primary physician the desire for hospice care to begin for this patient immediately. 3:00 pm – Patient is discharged with home hospice. Hospital may bill this claim for inpatient Part A payment. Claim will demonstrate 1 midnight of inpatient services. This represents an unforeseen circumstance interrupting an otherwise reasonable admitting practitioner expectation for hospital care. Upon review, this should be appropriate for inpatient admission and payment so long as the physician expectation and unforeseen circumstance were supported in the medical record. Case Study # 7: Medical Necessity • • • • 78 year-old man with a past and current medical history of chronic illnesses that are well controlled with medications. Patient slips while shoveling and falls and sustains a closed wrist fracture. 11/9/2013 Saturday o 11:00 pm - Beneficiary presents to the ED following fall at home. Beneficiary presents alone. o 11:30 pm - Beneficiary arm fracture confirmed by practitioner. Pain medication provided. 11/10/13 Sunday o 3:30 am - Beneficiary pain well controlled, stable for discharge but continues to require custodial care. No family or friends available and hospital social services are unavailable until Monday morning. Beneficiary held in hospital pending home care plan, no IV access, pain well controlled with oral medication. • • 11/11/13 Monday •10:00 am – Beneficiary released to home with family member. No other complications. • Outpatient services may be provided and billed to Medicare as appropriate. What does this mean to my hospital's finances"? • Financial impact of more inpatient, less observation and a 2% reduction in overall payment o Probe and Educate period o After March 31, 2015 o Projection based on history • Patient co-pay o Effect on collections/patient accounting/work flow o Effect on bad debt • Staffing mix and responsibilities • Capture of all services for potential payment o MC FFS claim may be retro-reviewed in new work flow and will require billing as Part B if found deficient Recommendations for thriving • Review work flows for all staff including medical staff • Ensure adequate clinical documentation to include dates and times on physician orders • Institute robust Multidisciplinary Rounds to ensure close monitoring of delays in provision of services • Ensure correct status from all Points of Entry o Process to ensure all Medicare FFS records are reviewed prior to claim submission o 2MN rule only applies to Medicare FFS at this point • Educate, educate, educate o o o o o Medical staff CM/UR CDI Claim processing HIM Recommendations for thriving con’t • Configure automated claims management to accommodate new rules • Assess system vulnerability to delay in service denial • Educate/train CM and CDI staff on appropriate documentation • Institute internal audit of all short stay claims o o o Outpatient Observation Inpatient Track, trend and report • Fortify denial management activities to respond to MAC’s and RAC’s rapidly to avoid take back QUESTIONS?