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Health Care Compliance AssociationClinical Practice Compliance Conference

Philadelphia, PA October 13-15, 2013

Timothy P. BlanchardRobert H. OssoffMyla R. Reizen

Clinical Appropriateness: Implications for Compliance Across the Continuum of Care:

Improving Quality and Avoiding Readmissions

Course Topics

What continuum?

What challenges?

What concerns?

What's new?

What’s better?

What to beware of.

What you can (try) to do about it.

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Continuum of Care

Outpatient, including observation services

Inpatient admission

Discharge planning

– Post-acute care (coverage implications)

Readmission reduction

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The Challenges

Taking care of people while providing services:

– Only when “reasonable and necessary”

– Meeting recognized standards of quality

– Economically (right level of care, etc.)

Adequate medical record documentation

Proper billing and correction when necessary

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Practical Challenges for Providers

Patient care

Observation vs. inpatient admission

– Making the determinations

– Documenting the decisions

Correcting patient status errors

Part A/Part B payment adjustments

Discharge planning and effective follow-up

Reducing inappropriate readmissions

Avoiding fraud & abuse allegations in the process

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OIG Patient Status Concerns: Both Ways OIG Report: Hospitals’ Use of Observation Stays and Short Inpatient Stays for Medicare Beneficiaries, OEI-02-12-00040 (July 29, 2013)

“Observation Stays,” “Long Outpatient Stays” and “Short Inpatient Stays”

– Similar reasons for encounters, but

– Generally higher reimbursement for inpatient stays

– Generally greater beneficiary liability for inpatient stays

– Adverse impact of observation and long outpatient stays on SNF coverage (lack of 3-day inpatient stay)

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CMS Policy Changes

New inpatient admission benchmark/presumption

New documentation requirements

New final rule for correcting patient status errors

Potential confusion regarding post-acute coverage requirements

Expansion of Readmission Reduction Program

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Observation:

Handling Changes and Errors in Patient Status

Assignment

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Observation is Not a Patient Status

Patient Status = Inpatient or Outpatient, not Observation

Observation is a type of outpatient service

– Frequently the UR question is whether an inpatient could have been treated with observation service (i.e., as an outpatient)

Patient Status ≠ Coverage Criteria

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Observation Services

“[A] well-defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.”

Observation services DO NOT include:– Those provided for convenience of patient/family/physician

– Those provided when inpatient admission would have been appropriate

– Standard preparation for, or monitoring related to, other services

– Post-op monitoring during standard recovery period

– Those lasting more than 48 hours, in most circumstances

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Causes of Patient Status Assignment Errors

Differences of opinion

Proprietary non-Medicare-specific guidelines

Misunderstandings– Physicians’ obligations

– Coverage and payment implications

– Clinical care implications

Medical record documentation issues– “Medical-ese”

– Unclear orders

– Unclear supporting documentation

– Timing of orders/authentication/implementation

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False Claims Exposure: Recent Cases

WakeMed

– Cahaba (PSC) audit in 2007

– $8 million settlement

– Deferred prosecution agreement

– Corporate integrity agreement

Shands HealthCare

– 2008 whistleblower case

$26 million settlement (Federal and State claims) Orlando Sentinel, August 2013

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Medicare Reimbursement (Summary) Inpatient DRG vs. Outpatient APC Patient can be admitted as inpatient after observation

– Purpose of observation is to determine whether inpatient admission in necessary

– Effective at time of the admitting order– 3-day payment window might (or might not) apply

Once admitted as an inpatient (after inpatient order):– No APC billing

• Unless Condition Code 44 requirements are met– No change of patient status: still inpatient– Only certain services can be billed under Part B

»No services requiring outpatient status

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Final Rule Replacing CMS Ruling 1455–R

If Medicare Part A inpatient claim is denied as not “reasonable” and “necessary” or Hospital UR discovers after discharge that admit was not “reasonable” and “necessary”

– Payment may be made under Part B for:• Any inpatient services that would have been reasonable and necessary if the beneficiary had been treated as a hospital outpatient

– Excluding services required outpatient status (with certain exceptions (e.g., outpatient therapy services))

– Any services furnished in the 3-day payment window

– Provided . . .

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Final Rule Requirements and Limitations

PROVIDED THAT ---

Beneficiary was enrolled in Part B

Part A claim is withdrawn

Part A appeal rights waived

Part B claims billed (i.e., re-billed) within the 1-year claim filing deadline

– See 42 CFR § 424.44(a)

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Final Rule Limitation

Part B payment will not be available for denials issued too late for timely rebilling – i.e., for most denials

42 C.F.R. § 414.5; 78 Fed. Reg. 50496 (Aug. 19. 2013)

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Handling Patient Status Errors

Errors detected before discharge (CC-44)

Post-discharge determinations (Final Rule)

– Expanded Part B billing for inpatient services

– 1-year re-billing deadline

Strong incentive for:– Concurrent case management and/or

– Prompt post-discharge internal utilization review

Disincentive for reliance on denial management and appeals

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Condition Code 44 Criteria (Not Changed)

UR Committee decides inpatient criteria are not satisfied

Change before discharge and before hospital billing

Physician’s concurrence is documented in medical record

Observation time starts when the physician orders observation and nursing begins to implement it.

– Not retroactive; time on inpatient status does not count toward OPPS observation service claim

“Reporting of individual HCPCS codes on an outpatient claim must be consistent with all instructions and CMS guidance, including . . . direct supervision required for hospital outpatient therapeutic services.”

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Utilization Review Rules vs. Condition Code 44

Normal UR committee rules allow decisions to be made either:

– (1) by one member of the UR Committee and the “practitioner or practitioners responsible for the care of the patient” or

– (2) by two physician members of the UR Committee without the concurrence of the treating physician(s).

In either case, the patient’s rights are protected by mandatory opportunity to confer regarding UR Committee determinations

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Inpatient Admissions--

Decisionmaking and Documentation

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Inpatient/Outpatient: Patient Status Matters

Basis of hospital coverage and payment

Impact on coverage for SNF care

Patient co-payment obligations

Focus of Recovery Audit Contractors (RACs)

Overpayment exposure

Potential False Claims exposure

Effectiveness of Provider’s

Utilization Review and Discharge Planning Functions

Compliance Program

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Patient Status: New Rules

Concern about recent increases in time Medicare beneficiaries spend as outpatients receiving observation services:– Number of Medicare beneficiaries receiving observation services

for more than 48 hours increased from approximately 3 percent in 2006 to approximately 8 percent in 2011. “This trend concerns us because of the potential financial impact on Medicare beneficiaries.”

Desire to improve clarity and consensus regarding relationship between admissions decisions and appropriate Medicare payment

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Revised Inpatient Admission Requirements

[A]n individual is considered an inpatient of a hospital, including a critical access hospital, if formally admitted as an inpatient pursuant to an order for inpatient admission by a physician or other qualified practitioner in accordance with this section and §§ 482.24(c), 482.12(c), and 485.638(a)(4)(iii) of this chapter for a critical access hospital.

42 CFR § 412.3(a); 78 Fed. Reg. 50496, 50965 (Aug. 19, 2013) (emphasis added).

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Specific Inpatient Admission Requirements

§ 482.24(c) – Medical Records Condition of Participation

§ 482.12(c) – Medical Staff Appointment, Admitting Privileges, Condition of Participation

§ 485.636(a)(4)(iii) – CAH-specific rule

§ 412.622 – IRF-specific rules

New requirements in § 412.3 itself

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§ 412.3(a) Requirements

“This physician order must be present in the medical record and be supported by the physician admission and progress notes, in order for the hospital to be paid for hospital inpatient services under Medicare Part A.”– It is a Condition of Payment, not just a Condition of

Participation (COP)

– Note the ANDs

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§ 412.3(b) Requirements

“The order must be furnished by a qualified and licensed practitioner who has admitting privileges at the hospital as permitted by State law, and who is knowledgeable about the patient’s hospital course, medical plan of care, and current condition.”

The ordering may not be delegated to an individual who is not authorized to admit patients, . . . “or has not been granted admitting privileges applicable to that patient by the hospital’s medical staff.”

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§ 412.3(c) and (d) Requirements

Physician order also constitutes required component of physician certification of the medical necessity of hospital inpatient services under subpart B of Part 424

“Physician order must be furnished at or before the time of the inpatient admission.”

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Physician Certification Requirements

Physician must certify/recertify:

– That services are provided in accordance with §412.3;

– Reasons for inpatient admission or special or unusual services in cost outlier cases;

– Estimated time patient needs to remain in the hospital;

– Plans for posthospital care, if appropriate.

Must be completed, signed, documented in the medical record prior to discharge.

42 CFR § 424.13, see also §§ 424.11, 424.14-.15

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Benchmark and Presumption § 412.3(e)

Inpatient Admission appropriate when:

– For procedure on Inpatient Only List, or

– THE PHYSICIAN EXPECTS the patient to require a stay that crosses at least two midnights.

Otherwise: the services are generally inappropriate for inpatient admission and Medicare Part A payment, “regardless of the hour that the patient came to the hospital or whether the patient used a bed.”

– Except in unforeseen circumstances, e.g., death or transfer resulting in a shorter stay than expected

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Application of the 2-Midnights Rule

“Medicare’s review contractors [are to] consider all time after the initiation of care at the hospital in applying the benchmark.”

“in the hospital receiving medically necessary services” ≠ as an “inpatient” – i.e., after the inpatient order

– Outpatient observation time counts toward benchmark, but is not considered inpatient

– Inpatient care starts with the inpatient order, but one midnight in OBS can be considered towards the new (2-midnights) benchmark

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No Presumption Regarding Medical Necessity

“No presumptive weight shall be assigned to the physician’s order under § 412.3 or the physician’s certification under Subpart B of Part 424 of the chapter in determining the medical necessity of inpatient hospital services under section 1862(a)(1) of the Act.”

“A physician’s order or certification will be evaluated in the context of the evidence in the medical record.”

42 CFR § 412.46(b) (medical review requirements)

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Two-Midnights Rule Compliance is Rebuttable

If a hospital is found to be abusing this 2-midnight presumption for nonmedically necessary inpatient hospital admissions and payment (in other words, the hospital is systematically prolonging the provision of care to surpass the 2-midnight timeframe), CMS review contractors would disregard the 2-midnight presumption when conducting review of that hospital.

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§ 412.3(e) Requirements

“The expectation of the physician should be based on such complex medical factors as patient history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event.”

“The factors that lead to a particular clinical expectation must be documented in the medical record in order to be granted consideration.”

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Discharge Planning

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CoP: Discharge Planning (42 U.S.C. § 1395x(ee))

• Identify, at an early stage of hospitalization, patients likely to have adverse health consequences without adequate discharge planning• Discharge Planning Evaluation

• Ensure that appropriate arrangements for post-hospital care will be made before discharge• Include likely need for appropriate post-hospital services and the availability of those services through participating providers in the area (“that request to be listed by the hospital”)• Discuss with the patient (or representative)

• Hospital must arrange for the development AND initial implementation of a discharge plan for the patient (“upon the request of a patient's physician”)

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Discharge Planning: Survey Interpretation

The hospital is responsible for developing the discharge plan for patients who need a plan and for arranging its initial implementation. The hospital's ability to meet discharge planning requirements is based on the following:

• Implementation of a needs assessment process with identified high-risk criteria;• Evidence of a complete, timely, and accurate assessment;• Maintenance of a complete and accurate file on community-based services and facilities including long-term care, sub-acute care, home care or other appropriate levels of care to which patients can be referred; and • Coordination of the discharge planning evaluation among various disciplines responsible for patient care.

• State Operations Manual, App. A, A-0808; see 42 C.F.R. § 482.43(b)(4)

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QIO Review Implications

• Quality Improvement Organization (QIO) Review

“Focusing on readmissions is a great way totackle inappropriate use of hospital stays, ”…[Readmissions are] “the intersection of threethings we care about: cost, quality, and patientsafety.” Jane Brock, M.D., Colorado Foundationfor Medical Care

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• QIO Reviews Include:

• Reasonable and medically necessary

• Early readmissions (<31 days) “to determine if the previous inpatient hospital services and the post-hospital services met professionally recognized standards of health care.”

• Whether a hospital has misrepresented admission or discharge information or has taken an action that results in—(i) The unnecessary admission . . . under Part A;(ii) Unnecessary multiple admissions of an individual; or . . .

• 42 U.S.C. § 1320c-3; 42 C.F.R. § 476.71; QIO Manual, IOM 100-10, Chap. 4

QIO Review Implications

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Defending Discharge Appropriateness-1

• Documentation Quality

• EMR vs. hard copy medical records

• Discharge summary vs. discharge/transfer records

• Discharge summary vs. internal consultation reports, PT/OT/speech/respiratory therapy recommendations

• Discharge summary vs. discharge/take home orders vs. problem list vs. care plan vs. medication reconciliation vs. discharge plan

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Defending Discharge Appropriateness-2

• Process, Process, Process• Appropriate, coordinated inpatient consultations

• Address all clinical recommendations, resolve conflicts

• Communication: patient and family comprehension

• Communication: post-acute and primary care providers

• Ongoing case management and utilization review

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Readmission Reduction

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• Estimated 12% of all 2011 Medicareadmissions were followed by a potentiallypreventable readmission.

• Potential savings from reducing avoidablereadmissions by 10% would achieve $1billion or more.

Medicare Payment Advisory Commission (MedPAC) (2013)

The Problem – for Medicare and Patients

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Problems for Providers – Practical

Lack of Actual Control

Admission Decisions – physician ordered

Discharge Decisions – physician ordered

Patient Compliance with discharge orders

Availability of appropriate post-acute care

Effectiveness of post-acute care providers

Physician follow-up after discharge

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Problems for Providers – Practical

Service area demographics

Poverty, high risk populations

Social circumstances, home environment, social services

Other providers/suppliers in the continuum of care

Physicians, clinics, HHAs, SNFs, PT/OT, DME, public health

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Problems for Providers – Regulatory

• Reimbursement• Payment Denials (Not Reasonable and Necessary)

• Hospital Readmission Reduction Program

• Adverse Impact on Value-Based Purchasing

• Licensing & Certification (e.g., Discharge Planning, UR)

• QIO Review• Adverse Quality Findings

• Alleged Circumvention of the Prospective Payment System

• OIG Work Plan

• “Hospital Compare” Website Reporting Implications

• Potential CMPL/FCA/Fraud & Abuse Allegations

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Between a Rock and a Hard Place

• Potential Civil Money Penalty Law (CMPL) Allegations

• HIPAA Privacy/Security Rule Implications

• Avoiding Fraud and Abuse Allegations While Trying to Avoid Unnecessary Readmissions Findings/Allegations• Beneficiary Inducement Prohibition

• Anti-kickback Implications of Provider/Supplier Arrangements

• Honoring Patient Choice

• Uncertainty in Medicine / Medical Judgment

• Not Discouraging Appropriate Readmissions

• All While Taking Care of Patients

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CMS on the Patient Compliance Problem

We recognize that some patients choose not to follow a recommended treatment plan, even when they have access to the care they need. However, all hospitals have the opportunity to reduce the rate of readmission, even among less compliant patients. Improving readmission rates is the joint responsibility of hospitals and clinicians. Measuring readmissions will create incentives to invest in interventions to improve hospital care, better assess the readiness of patients for discharge, and facilitate transitions to outpatient status.

78 Fed. Reg. at 50652 (emphasis added).

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Readmission Reduction Program

• Reduction to base DRG rate for hospitals with “excessive readmissions” within 30 days

• Maximum FY2013 1%, FY2014 2%, FY 2015 3%

• Excess readmission ratio: actual to expected risk-adjusted readmissions of specified DRGs/conditions

• Planned Readmission Algorithm 2.1 • 42 CFR § 412.152; 77 Fed. Reg. 53258, 53374-401

(Aug. 31, 2012); 78 Fed. Reg. 50496, 50649-76 (Aug. 19, 2013)

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Factors Not in Risk Adjustment

Patient race, ethnicity, language,

Income

Lifestyle

Health literacy

Dual-eligible status; insurance status

Functional status, cognitive impairment

Post-discharge care support structure

Access to primary care

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Readmission Reduction Program

Conditions:• FY 2013-FY 2014

• Acute myocardial infarction (MI),

• Heart failure (HF)

• Pneumonia (PN)• Add for FY 2015

• Acute exacerbation of chronic pulmonary obstructive disease (COPD)

• Total hip arthroplasty (THA)

• Total knee arthroplasty (TKA)

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Readmission Reduction Program Penalties

• $227 million this year in penalties.

• 2225 penalized hospitals (2/3s of hospitals)

• 18 maximum 2% penalty

• 154 penalized 1% or more

• Who has the highest readmission rates?

• How does this compare to Year 1?

(Kaiser Health News, August 2013)

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Approaches to Reducing Readmissions-1

Avoiding Readmissions Starts at Admission

Inpatient Care – Effective Staff Nurses

– Medication Reconciliation and Problem Lists

– Communication Among Care Teams

– Care Plan Communication – Including Patient Involvement

Comprehensive Case Management

Discharge Planning – Assess Patient Self-Care Capability, Home Circumstances

– Physician Coordination

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Approaches to Reducing Readmissions-2

Encouraging Compliance with Discharge Instructions

Patient Coaching Initiate Implementation of Discharge Plan

– Improve Transitions/Handoffs to Post-Acute Providers

Post-Discharge Hospital Follow-Up

– Scheduling Assistance Follow Up Appointments– Follow-up Home Visits (not covered HHA?)

Integration Between Acute and Post Acute Providers

– e.g., Accountable Care Organizations (ACOs), etc.

Providing or facilitating transportation for follow-up care and other patient assistance (beware fraud & abuse issues)

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Summaries and Resources

“Preventing Hospital Readmissions: The First Test Case For Continuity Of Care” (Computer Sciences Corporation, 2012)

– http://assets1.csc.com/health_services/downloads/CSC_Preventing_Hospital_Readmission.pdf

The Revolving Door: A Report on U.S. Hospital Readmissions (Robert Wood Johnson Foundation, February 2013)

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Best Practices / Compliance Risks

Patient Inducement (42 U.S.C. §1320a-7a(a)(5))

[O]ffers or transfers remuneration . . . to any individual eligible . . . that such person knows or should know is likely to influence such individual to order or to receivefrom a particular provider, practitioner or supplier any item or service for which payment may be made, . . . , under Medicare or a State health care program.

Patient Steering and Patient Choice

• HHA, SNF, DME, Provider-Affiliated Physicians

Anti-Kickback Statute (AKS) Allegations

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Additional Compliance Issues

Patient confidentiality/privacy

Licensure (for outreach/follow-up personnel

Credentials (for outreach/follow-up personnel)

Consent for treatment

Orders for treatment and evaluation

Liability

State-specific requirements

Managed care contract

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Shared Savings Program Waivers

• Protect certain beneficiary inducements by ACOs in the program, 76 Fed. Reg. 67992 (Nov. 2, 2011) if:– There is a reasonable connection between the

items/services and patient medical care– The items or services are in-kind.– The items or services are preventative; or– The inducements a\dvance one or more of the

following clinical goals:• i. Adherence to a treatment regime.• ii. Adherence to a drug regime.• iii. Adherence to a follow-up care plan.• iv. Management of a chronic disease or condition.

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Favorable OIG Advisory Opinion 13-10First AO specifically addressing readmissions

Contract with hospital to provide services to patients with certain diagnoses following hospital discharge to reduce preventable readmissions

–Patient liaison

–24-hour nurse hotline

–Reports, e.g., on patient medication adherence and post-discharge physician appointment completion

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Other OIG Guidance -1

OIG Advisory Opinion: 06-01—Free Pre-Operative Home Safety Assessment By HHA: Unfavorable

“[T]he purpose of the assessment is to ascertain whether the patient’s home is suitable for postoperative recovery. During the assessment, a physical therapist gathers basic information about the patient (e.g., past surgical history and history of falls) and basic information about the patient’s residence (e.g., number of stories, number of steps, and presence of tripping hazards). The therapist conducting the assessment may also offer limited suggestions about simple home safety improvements (e.g., removing throw rugs and placing a telephone in an accessible location), but the assessment does not include any skilled care, significant patient education, or exercise or other therapeutic instruction.”

“Requestor delivers the free services in a manner that would lead a reasonable beneficiary to believe that he or she is receiving a valuable service, and that may actually comprise a valuable service.”

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Other OIG Guidance-2

OIG Advisory Opinion 12-13 – Free Hearing Tests: Favorable

OIG Advisory Opinion: 02-14 – Free Safety Equipment and Pagers for Hemophilia Patients/Parents: Unfavorable

OIG Advisory Opinion: 03-04 – Medical Alert Pagers For Homebound: Favorable

OIG Advisory Opinion: 07-16 – Educational Videos by HHA for Prospective Ortho Patients: Favorable

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Other OIG Guidance-3

OIG Advisory Opinion: 8-14 – Motivational Incentives at Substance Abuse Center: Favorable

OIG Advisory Opinion: 11-7 – Vaccine Reminder Program Without Incentives: Favorable

OIG Advisory Opinion: 02-12 – Online Clinical Compliance Program With Incentives: Favorable

OIG Advisory Opinion: 10-08 – Radiation Therapy Center Provision of Dietitian and Social Worker Services Without Additional Charge: Favorable

– Analysis of scope of “covered services”• OIG Advisory Opinion: 07-19 – Radiology Reports Part of

Professional Service: Favorable

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Key Questions for AKS Risk Assessment

Does the arrangement or practice have a potential to interfere with, or skew, clinical decision-making?

Does the arrangement or practice have a potential to increase costs to Federal health care programs, beneficiaries, or enrollees?

Does the arrangement or practice have a potential to increase the risk of overutilization or inappropriate utilization?

Does the arrangement or practice raise patient safety or quality of care concerns?

OIG Supp. Compliance Guidance; 70 Fed. Reg. 4858, 4864 (Jan. 31, 2005) (emphasis added).

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Final Thoughts

First, Do No Harm

Don’t Forget the Patient

Don’t Forget Compliance Review

Don’t Forget to Get Legal Advice

Don’t Forget State Law and State Oversight

Don’t Forget Risk Management Concerns

Focus on the Fundamentals and Follow Up

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Fundamentals and Follow-Up

Documenting orders (planned admits, ED, OBS)

– What were the instructions?

Supporting medical record documentation

– What was the clinical thinking?

Case Management and Discharge Planning

Prompt, concurrent if possible, Utilization Review

Post discharge coordination and communication– Follow up on the follow up

Handling unavoided re-admission situations

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Questions

Timothy P. BlanchardBlanchard Manning LLP

360.376.3260tim@blanchardmanning.com

Myla R. ReizenJones Walker LLP

305.679.5716mreizen@joneswalker.com

Robert H. OssoffVanderbilt University Medical Center

615.343.0429robert.ossoff@vanderbilt.edu

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