billing, documentation, inpatient, Medicare, payment



  1. Hightower, Rebecca E. MS, RN, CPUM


Background: Since the publication of the first analysis of Medicare payment error rates in 1998, the Office of Inspector General and the Centers for Medicare & Medicaid Services have focused resources on Medicare payment error prevention programs, now referred to as the Hospital Payment Monitoring Program. The purpose of the Hospital Payment Monitoring Program is to educate providers of Medicare Part A services in strategies to improve medical record documentation and decrease the potential for payment errors through appropriate claims completion. Although the payment error rates by state (and dollars paid in error) have decreased significantly, opportunities for improvement remain as demonstrated in this study of nine hospitals with a high proportion of short-term admissions over time. Previous studies by the Quality Improvement Organization had focused on inpatient stays of 1 day or less, a primary target due to the large amount of Medicare dollars spent on these admissions. Random review of Louisiana Medicare admissions revealed persistent medical record documentation and process issues regardless of length of stay as well as the opportunity for significant future savings to the Medicare Trust Fund.


Purpose of the study: The purpose of this study was to determine whether opportunities for improvement in reduction of payment error continue to exist for inpatient admissions of greater than 1 day, despite focused education provided by Louisiana Health Care Review, the Louisiana Medicare Quality Improvement Organization, from 1999 to 2005, and to work individually with the nine selected hospitals to assist them in reducing the number of unnecessary short-term admissions and billing errors in each hospital by a minimum of 50% by the end of the study period.


Primary practice setting: Inpatient Short-Term Acute Care Hospitals.


Methodology and sample: A sample of claims for short-term stays (defined as an inpatient admission with a length of stay of 3 days or less excluding deaths, interim bills for those still a patient and those who left against medical advice) occurring during the baseline and remeasurement time frames was examined. The baseline period consisted of 1 month's claims-the complete month just prior to the start of approved project activities. Remeasurement was performed by each hospital and reported to the Quality Improvement Organization on a monthly basis following implementation of the hospital's quality improvement plan. Each hospital was required to provide a monthly remeasurement report by indicator until it had met its stated goal(s) for improvement for 2 consecutive months; therefore, each hospital completed its required monthly reporting for a specific indicator in a different month.


Results: Results were calculated for the following indicators:


Indicator 1: Proportion of unnecessary short-term admissions = number of unnecessary short-term inpatient admissions/total short-term inpatient admissions in time frame.


Indicator 2: Proportion of errors in billed treatment setting, that is, outpatient observation billed as inpatient = number of errors in billed treatment setting/total short-term admissions in time frame.


Six of the 9 hospitals were able to accomplish reduction of their error rates within 6 months from the beginning of the study. The seventh hospital reached its goals in the 7th month, with the 2 remaining hospitals making progress toward their goals by the conclusion of the study.


Implications for case management practice


1. Case managers must be up-to-date with payor requirements regarding medical record documentation for medical necessity of services and timing of inpatient admission, e.g., for Medicare, the date and time of the written physician's order for admission to the inpatient care setting is the date and time of inpatient admission.


2. The balancing of clinical decisions and financial considerations required of case managers in hospital settings remains an ongoing challenge.


3. Senior leadership must be engaged in ensuring the success of the case management program by providing the resources required.


4. Managers of case management programs must have in place an effective process to address compliance with changes in federal and state regulations and maintain collaborative relationships with senior leaders responsible for clinical, financial, and strategic plans and goals for the organization.


5. The case management process must include all related services, e.g., admissions, nursing services, health information management, finance/business services, contracting, medical staff, etc.