The readmission rate is dropping, but are hospitals just doing a quick shuffle--shifting patients from inpatient status to observation services--to make that change happen?
The study "Readmissions, Observation, and the Hospital Readmissions Reduction Program" published in the February 24 issue of the New England Journal of Medicine says that is not the case. The decline in readmissions is real, says the study, and likely in response to the Hospital Readmissions Reduction Program (HRRP), which fines hospitals for excessive readmissions.
CMS implemented the HRRP in 2010 in an effort to save the government money on the $17 million in estimated avoidable costs incurred each year from unnecessary hospital readmissions and to spare patients the poor outcomes that send them back to the hospital after they are discharged home.
The readmission rate has declined since the implementation of HRRP. But at the same time, some pointed to the fact that use of observation services was increasing and wondered if the two were connected. Others questioned whether the HRRP was actually making a difference in readmission rates, which were already on the decline before the program went into place.
The findings of this study validate what some case managers say they knew all along.
"Personally, as a director of case management I have never seen observation status used to avoid the readmission penalty," says June Stark, RN, BSN, MEd, director of care coordination at St. Elizabeth's Medical Center, Steward Healthcare in Boston.
CMS changed the status indicator for CPT code 99497 (advance care planning including the explanation and discussion of advance directives such as standard forms [with completion of such forms, when performed], by the physician or other qualified health care professional; first 30 minutes, face-to-face with the patient, family member, and/or surrogate) from N (no additional payment, payment included in line items with APCs for incidental service) to Q1 in the 2016 OPPS final rule.
Regulations adopted in October 2013 allow hospitals to bill Part B for inpatient cases that are internally reviewed and "self-denied" within one year of the date of service. But utilization review staff are unsure when to use the old condition code 44 process and when to opt for the new process using condition code W2. Operationalizing these rules can prove to be challenging, causing recoding, rebilling, and expensive slowdowns in the revenue cycle.
The utilization review (UR) process is a required process to determine if the care a physician provides the patient is medically necessary and reimbursable by the payer source. While the exact definition of medical necessity varies amongst insurers and government agencies, section 1862 (a)(1)(a) of the Social Security Act provides the basic groundwork, stating, "Notwithstanding any other provisions of this tile, no payment may be made … for any expenses incurred for items or services, which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member."
If your organization is like many others, you've probably still got some lingering questions about how to comply with the 2-midnight rule. During a recent HCPro webcast "Medical Necessity Documentation and Short Stays," Steven Greenspan, JD, LLM, vice president of regulatory affairs at Executive Health Resources in Newtown Square, Pennsylvania, and Kurt Hopfensperger, MD, JD, vice president of compliance and physician education for Executive Health Resources, tried to shed some light on areas of confusion.
