Implementation Questions


In an effort to continue to assist clients with implementation of the requirements set forth in the 2014 IPPS we share below questions that have arisen recently and answers based on our interpretation.

Question: Will our admissions between October 1, 2013, and March 31, 2014, be audited?

Answer: The contractors are not supposed to audit admissions on or after October 1 for determination of patient status (inpatient v. outpatient) in the absence of gaming or intentional delay, but transmittal 1315 (see attached) applies the limitation on RAC reviews narrowly stating that the prohibition on patient status reviews applies to “…those that include denial language to indicate that while the patient care provided may have been appropriate, the setting in which it occurred was not warranted (i.e. it could have been provided on an outpatient basis).”  All other reviews remain “fair game.”

RACs and other contractors are permitted to review whether hospitalization was medically necessary for the patient and whether the patient

was medically required to remain in the hospital for the second midnight. The RACs can audit whether the patient could/should have been safely discharged. All medical necessity and coding reviews unrelated to patient status are expressly permitted.

QuestionAs long as the physician signs a certification form with each element in the statement (including rationale for a stay encompassing two midnights) have I met the requirements for inpatient billing?

Answer: The new 1599 requirements can be described as a three legged stool to support an inpatient admission:

1.   A valid inpatient order by a physician with admitting privileges

2.   Elements of certification signed by the MD (including addressing the rationale for the need for hospital care expected to span two midnights)

3.   Clinical documentation (“CLINICAL FACTS, orders, progress notes and other clinical documentation) that supports the conclusion of the MD that hospital care was necessary for a period spanning two midnight.

We have seen great progress with the first leg of the stool; order sets and forms that assist with the certification. However, we continue to see struggles with legs two and three; clear clinical rationale and documentation to support the rationale. We are, of course, available to help you in many ways to facilitate compliance; educational efforts, concurrent audits, retrospective audits, and appeals support.

Remember that the physician’s conclusion (certification statements) that the patient requires care spanning two midnights is given NO presumptive weight.

We will continue to share questions/answers and processes that provide some assistance.

Question:  How do case managers ensure compliance with the new rules?

Answer: Processes should be in place to review appropriate patient status at the time an order is issued to place a patient in the bed. If the order is for an outpatient bed with observation services, case management should review the case after the first midnight to ensure that a physician makes a decision to discharge or admit the patient prior to the second midnight depending on whether it is medically necessary to

keep the patient a second midnight.  If the decision is made to admit the patient, the case management staff should review all documentation to ensure that the documentation supports the medical necessity of the admission, and that all required elements of the certification are in the chart.


As always, if you have questions, please contact us for assistance.

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