Providers Dodge a Bullet: Reimbursement Might Have Been Tied to Hospital Medical Necessity Denials

April 2nd, 2014 / By Barbara Aubry, RN

Doctors, nurse practitioners, nursing homes, lab, ambulance, and home health providers dodged a major bullet.

While it’s still freezing cold on the East Coast, CMS released Transmittal 505, Change Request 8425 on a very hot topic – extending record requests for medical necessity audits of admissions. The subject of the CR “Removing Prohibition” means (according to CMS) “allow(ing) the contractors to make a decision or take action on claims that are not currently being under review.”

But on March 19, 2014 CMS rescinded the transmittal citing “the need to clarify CMS’s policy” regarding removing prohibition. They also said the policy will not be replaced at this time. Let this be a warning: CMS came very close to denying collateral provider claims for medically unnecessary admissions. This is something they are obviously serious about.

Bottom line
CMS auditors can’t always make an accurate determination on a claim under review based solely on the hospital claim or supporting documents in their systems. CMS intended to allow its auditors to request office and other documentation from MDs, NPs, nursing home, labs, ambulance, and home health to give a complete picture of patient history and acuity. If CMS had not rescinded this transmittal, they would have granted the discretion to deny other related claims submitted before or after the claim in question.”

Impact on Providers
Admitting providers are not fiscally impacted for hospital medical necessity denials – the burden is always borne by the hospital alone. The release of Transmittal 505 indicated that CMS felt it was time for a change. In my opinion, the rescinding of the Transmittal means CMS has not abandoned the idea but that it needs to clarify the policy more fully. If I were a provider, I would expect more on this in the future.

How to prepare?
Document and think like an Auditor. Document your decision making process; help the auditor understand the rationale for admitting a patient. As an RN, I know firsthand that clinical documentation does not tell the full story of the patient’s acuity or risk. I suggest rethinking documentation of the chief complaint and history of present illness including modifying factors and context.

For example:
50 year old female, 10 year hx of chronic blood disorder with frequent transfusions, arrives home from Florida vacation with SOB that developed on the plane. She is dusky and wheezing; no history of bronchitis or asthma. Vitals are WNL; afebrile. Patent PICC in left UE managed by visiting nurse x 7 months infusing an iron chelating medication. 02 sat on RA is 90. Admission required. Etiology unclear; pneumonia or other respiratory complication in a chronically compromised individual, cardiac reaction to any of her multiple medications or circulatory complication at risk for worsening without warning.

50 YO female c/o SOB; no hx of asthma; 98.6, PICC, 02 sat 90%, for admission

Yes, initially it will take more time to document thoroughly, but should there be an audit this note provides a clear picture of the medical necessity decision making process. As CMS reminds us in Chapter 6, Section 6.5.3 of the Program Integrity Manual which states “review of the medical record must indicate inpatient care was medically necessary, reasonable and appropriate for the diagnosis and condition of the beneficiary at any time during the stay.” Patient acuity and risk is clear – something the auditor can’t appreciate unless it’s recorded. In the long run, thorough documentation will save time and money and it’s a good habit to develop.

Barbara Aubry is a Regulatory Analyst for 3M Health Information Systems.