It seems that with each New Year, there are new healthcare regulations emerging that will affect the lives of case managers. Some have been around awhile and are "variations on a theme." Others are in response to legal altercations or congressional regulations. In addition to evidence-based research and practical hands-on tools, Professional Case Management (PCM) strives to keep case management abreast of these issues through either editorials or articles. In this issue, we will do both. In March-April 2007, Vol 12 (2), we discussed "An Important Message From Medicare: New Rules on July 1, 2007." That pales in comparison to the ones we will discuss in this issue!!
At the risk of sounding like chicken little, crying, "The sky is falling!!"-I will start with the recovery audit contractors (RAC)-(The RACs are coming!! The RACs are coming!!). The two other regulatory issues in this editorial include the present on admission (POA) indicator and preventable hospital errors for which Medicare will no longer pay. These two are intrinsically related in evolutionary fashion.
Surviving the RAC
On January 11, 2005, Centers for Medicare and Medicaid Services (CMS) announced the RAC demonstration project, mandated by The Medicare Prescription Drug Improvement and Modernization Act of 2003. This 3-year effort was to determine whether the use of RACs was a cost-effective method of identifying and recouping Medicare underpayments and overpayments. Using three states with the largest Medicare expenditures-California, New York, and Florida-the RACs were not just successful: they were very successful. With hundreds of millions of dollars at stake for the Medicare Trust Fund, the CMS has spread the effort to three more states before the demonstration project was over: Arizona, Massachusetts, and South Carolina. We can safely guess that it will be nationwide in the near future.
There are several areas of investigation and many ways that the RACs identify underpayments or overpayments. Some include looking at specific diagnosis-related groups (DRGs), durable medical equipment, high-cost injectable drugs, renal dialysis services, outpatient services (such as physical therapy or psychiatric encounters), and physician services. Of the DRGs, the most often looked-at include DRG 143 (chest pain), DRG 127 (CHF [congestive heart failure]), DRG 243 (back pain), and DRGs 182/183 (gastroenteritis). It has become clear that these DRGs, especially with short length-of-stays, should have been "Observation," and are the low-hanging fruit for RACs.
First, the RACs find these cases, and then the claims are forwarded to the Medicare Fiscal Intermediary for payment reprocessing to the provider. In an RAC status report from December 2006, the following (staggering) dollar amounts were presented:
The financial ramifications to healthcare organizations are enormous, and the implications for the job descriptions of case management may be significant. In the March-April 2008 issue of PCM, we will address how case management, using the case management protocol and other interventions, impacted correct patient status assignments for DRG 143 (chest pain). This particular DRG has been determined to be a major reason for "give-back" to the Medicare Trust Fund, and the article has important lessons about this system change. Make no mistake-the RAC initiative and the case management protocol results from various projects are bringing case management front-and-center in a new way. We are on the radar-screen of major healthcare players.
It is a wise move to develop an RAC team now and to peruse the following Web site for more information on this initiative: http://www.mahima.org/resources/documents/RACInformation-TheMassachusettsHealthI
We can be reasonably certain that this initiative will expand to all states; we can also be reasonably sure that it will not "go away." But there is an upside to everything: "C" Suite Upper Management, Boards of Directors and Parent Corporations will look to (and hopefully listen to) case management and hear what we have been saying all along about medical necessity and observation versus inpatient (for starters).
POA1
Present on admission is a new indicator that providers must submit on hospital claims on(after January 1, 2008 (was effective October 1, 2007). After April 1, 2008, hospitals submitting claims lacking the POA indicator will have their claims returned unpaid.
Present on admission is defined as present at the time the order for inpatient admission occurs. These include conditions that develop during an outpatient encounter, in the emergency department, during observation, or in outpatient surgery. The POA indicator makes a distinction between a patient's actual comorbidities and a hospital-acquired complication.
The reasoning for this new coding wrinkle is simple: under the current/newest Medicare DRG system, a hospital that fails to prevent a complication after admission can potentially receive a higher payment because the diagnosis associated with the complication may result in the patient being assigned a higher paying DRG. In essence, this means that a hospital is being financially rewarded for poor care. Medicare will no longer pay for conditions that are potentially preventable or complications that result from processes of care and treatment, rather than the natural progression of an underlying illness.
There are four possible reporting options for the POA indicator:
1. Y-yes (the condition was present at the time of inpatient admission).
2. N-no (the condition was not present at the time of inpatient admission).
3. U-unknown (documentation is insufficient to determine whether condition was present at the time of inpatient admission).
4. W-cannot be determined (the provider is unable to clinically determine whether the condition was present at the time of inpatient admission or not).
It is safe to assume that, at least in some hospitals, case managers will be requested to assist in the determination of when a particular condition manifested. This may occur at the beginning of an admission-or it may be a request from medical records, retrospectively. So, it behooves case managers to at least be aware of the POA indicator from the onset.
It is not hard to deduce the types of conditions that are being explored for the POA indicator. We can think about fall-related injuries, decubitus ulcers, accidental laceration during a procedure, improper administration of medications, hospital-acquired pneumonia, air emboli, pneumothorax during a central line insertion, urinary tract infections, and so forth. This list closely mirrors the eight complications that Medicare will no longer pay for.
Preventable Errors-The CMS No-Payment Rule
Medicare will no longer pay hospitals to treat the following eight preventable complications if they occur during a patient admission. The first three are also known as "never events" as they should never happen:
1. Objects left in the body during surgery
2. Air embolism
3. Blood incompatibility
4. Catheter-associated urinary tract infection
5. Pressure Ulcers
6. Vascular catheter-associated infection
7. Surgical site infection-mediastinitis after coronary artery bypass graft surgery
8. Hospital-acquired injuries from patient falls, for example, fractures, dislocations, intracranial injury, crushing injury, burns, and other unspecified effects of external causes
The list takes effect for discharges occurring on or after October 1, 2008, with reports that Medicare will add three more conditions to the no-payment list the following year. Like POA conditions, it is reasonable for Medicare to balk at paying to retrieve surgical tools or sponges left in a patient after an operation, or to reimburse for extra care given to the patients harmed by incompatible blood or air embolisms, or for treating bedsores developed in the hospital, or for injuries caused by falls in the hospital, or infections caused by prolonged use of catheters in the bladder or blood vessels, or for a surgical site infection after a coronary artery bypass graft.
But, there is always another side to the story. Here are a few of the considerations already published in the media that will need to be addressed:
* Some of the conditions cited by Medicare may not be entirely preventable. Even with the best of care, certain patients including those at the end-of-life may be exceptionally prone to developing pressure ulcers or infections (for example).
* One common theme is that extra tests may be required to "prove" that a condition is POA: for example, hospitals may feel compelled to do urinalysis testing upon admission to determine whether patients have urinary tract infections before admission. The new rules could encourage unnecessary testing by hospitals eager to show that infections were already present at the time of admission and did not develop in the hospital. Hospital executives worry that they will have to absorb the costs of these extra tests because Medicare generally pays a flat amount for each case.
* One element missing from the initial steps is any penalty for the doctors who commit some of the errors. The hospital loses any extra payment for a second operation to retrieve an object left behind the first time, which seems appropriate, given that nurses are supposed to keep track of all instruments and sponges.
Medicare will take the heat as they work through these factors. And, on their coat-tails will be private insurers who are considering similar changes. If quality-of-care projects did not improve healthcare in the transformational fashion hoped for, certainly financial "incentives" will move the mountain.
What can we do? For the RACs, continue to monitor for medical necessity and correct admission status. For the POA and no-pay conditions, thorough and consistent documentation now takes on a whole new dimension. Documentation has always been a tremendous challenge to coders and case managers alike; now the stakes are higher. Yes, it is the physician's job. The question is: who will be accountable for ensuring that the documentation is complete? One last caveat-make sure your teams that deal with these issues have all the necessary players: do not overlook compliance and financial officers. Their clout and perspectives are invaluable.
Have a safe, peaceful, and healthy 2008 from PCM!!
1Not to be confused with Power of Attorney. [Context Link]
Section Description
Mission Statement:Professional Case Management is a peer-reviewed, progressive journal that crosses all case management settings. PCM uses evidenced-based articles to foster the exchange of ideas, elevate the standard of practice, and improve the quality of patient care.