CMS puts short-stay audits on hold

Learning objective

At the completion of this educational activity, the learner will be able to:

• Identify what prompted CMS’ decision to temporarily suspend 2-midnight short-stay Quality Improvement Organization audits and what the decision means for compliance efforts

There’s good news and bad news on the 2-midnight rule front.

The good news: CMS has put short-stay inpatient audits related to the 2-midnight rule on hold as of May 4.

The bad news: This isn’t a free pass, and it isn’t going to last.

"Response at hospitals should be to do nothing different," says Ronald Hirsch, MD, FACP, CHCQM, vice president of the Regulations and Education Group at Accretive Physician Advisory Services at Accretive Health in Chicago. "Follow the rules on every case. This is not a three-year delay; the audits will resume soon, and we have no idea if the look-back period will be altered to account for this delay."

The May announcement

Livanta, one of the two Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIO) charged with conducting 2-midnight rule compliance audits, posted a notification about the audit suspension on its website: http://bfccqioarea5.com/twomidnight.html. The announcement stated:

On May 4, 2016, CMS notified the BFCC-QIOs of a temporary pause of Two-Midnight Reviews in order to improve standardization across the program. During this period, Livanta will be collaborating with CMS and the other BFCC-QIO to ensure consistency in how the rule is applied to QIO case review. If your facility has submitted Livanta requested medical records, they will remain in the pipeline for review upon further direction from CMS. Going forward it is CMS’ intention that providers will have at least six weeks to implement changes prior to the next round of BFCC-QIO reviews.

"It seems that inconsistencies had resulted in many complaints, which is what prompted the suspension," says Stefani Daniels, RN, MSNA, CMAC, ACM, president and managing partner at Phoenix Medical Management, Inc., in Pompano Beach, Florida.

This suspension marks the second time CMS auditors have apparently fumbled 2-midnight rule interpretation. Medicare Administrative Contractors who conducted the initial probe and educate audits of the 2-midnight rule were also accused by hospitals of misinterpreting the standard?and hospitals had hoped that having BFCC-QIOs take over the task would solve the problem, says Hirsch. Unfortunately, it appears BFCC-QIOs are running into the same challenge.

When the BFCC-QIO audits first began back in October 2015, they brought some unwelcome surprises. Many hospitals anticipated that the reviews would only look at records from October 2015 forward. But hospitals soon began reporting that BFCC-QIOs were requesting records for cases as far back as May 2015, according to Hirsch. That wasn’t the only issue?BFCC-QIOs were also missing deadlines. Audit results were late, and the BFCC-QIOs were slowing the scheduled education for providers.

This created two problems for hospitals. First, the late BFCC-QIO audit results meant that hospitals with denied claims were poised to miss the filing deadline to rebill denied claims to Part B. Because of the delays in scheduling education related to the first round of claim denials, hospitals didn’t have an opportunity to understand their mistakes and fix them before the next set of audits began.

In addition, there was also some online buzz that BFCC-QIOs were misinterpreting the rule, says Hirsch. The main problem: benchmark admissions. Some hospitals reported that BFCC-QIOs were routinely denying inpatient admissions when patients spent one night as an outpatient in the emergency room or in observation services before they were admitted. This was the case even though these patients then spent a second night in the hospital as an inpatient that the physicians documented as medically necessary. This is a clear misinterpretation of the rule, says Hirsch. In other cases, the BFCC-QIOs were also denying the second midnight due to a lack of medical necessity, essentially overruling the judgment of hospital physicians.

Moving forward

As of presstime, it was unclear when the audits were going to resume or what the outcome of the suspension would be. In the meantime, though, hospitals should continue with business as usual?after all, it’s always good practice to assume claims will be audited and to be prepared for such a situation.

Best practices to follow to prepare for audits include those listed below:

• Review every short-stay admission?those between zero and one day?prior to billing.
• Ensure every patient’s status is appropriate up front, says Hirsch. Review the chart of every patient that goes upstairs.
• Use the physician advisor to check compliance on cases that are murky to ensure they meet one of the exceptions under the 2-midnight rule. Change cases that don’t meet an exception using condition code 44. If the problem isn’t discovered until after discharge, self-deny and rebill the claim.
• Ensure that case managers and physicians are up-to-date about any potential changes to the 2-midnight rule and how to comply with them.

In addition, it’s important to understand how audits work and be aware of any changes that will occur when they resume. KEPRO said before the audit suspension that auditors of short-stay claims need to see the following two components:

1.Documentation of medical necessity

2.Application of the 2-midnight rule

Reviewers also were charged with looking for quality-of-care issues and will validate coding associated with the claims. Before the suspension, a nonphysician using InterQual® would perform the first BFCC-QIO audit. If the case fails the initial review, a physician review would then follow, which is based on the physician’s medical judgment

Specifically, the physician reviewer would look at:

• Acuity of the patient’s signs and symptoms
• Medical predictability of adverse events
• Need for diagnostic studies

Another concurrent review was designed to look at physician documentation to ensure patients needed hospital-level care and that their admission was not for social, custodial, or convenience reasons.

Ultimately, when it comes to BFCC-QIO reviews, the advice remains the same despite the temporary suspension: Stay on top of this issue, make sure physicians are assigning patients to the proper status, and ensure docs have the documentation to back up their decisions.

HCPro.com – Case Management Monthly