CMS Releases 2014 IPPS Proposed Rule

Michelle A. Leppert, CPC , April 30, 2013

In some circumstances, inpatient stays may occur if a patient stays less than two midnights, which would require explicit documentation by an ordering physician, Kennedy says. "The whole issue of medical necessity is not well understood by most physicians, yet with bundled payments on the horizon, it is an area that physicians will need substantial education and support." This is a big benchmark change that could make many more patients outpatient than under the previous 24 hour benchmark, says Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro, Inc. in Danvers, Mass.

"This coupled with the Part B rebilling where the facility can self-deny inpatient cases and rebill under Part B will probably mean that every stay less than two midnights will always be billed outpatient either up front or because of after-the-fact self-denials," Hoy says. CMS seems to be looking at the proposal in a different way, believing it will shift care to the inpatient side and is making a slight downward payment adjustment to account for it in the inpatient rates.

"The proposal would give constancy in decisions because I think that the only cases anyone will be questioning very much anymore will be those less than two midnights," Hoy says. One more interesting thing about the proposal is when to start counting inpatient time, Hoy says. With all the discussion on inpatient orders in the rule, it would be with the inpatient order when the patient officially becomes inpatient, but CMS includes an interesting statement:

"The starting point for this time-based instruction would be when the beneficiary is moved from any outpatient area to a bed in the hospital in which the additional hospital services will be provided."

That is usually the time when the physician orders observation services because observation is most often provided in an inpatient hospital bed, not a separate outpatient area, Hoy says.

"Therefore if I was interpreting this in light of how care is provided the time would start when the patient is moved from the ED to a bed on the floor even if the physician ordered observation," Hoy says. Presumably as the patient remains (and is sick) the physician admits the patient and services are billed as inpatient with the time counting back to the time they went to the bed.

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