Admission Order Regulation Change Brings Relief – And Uncertainty: Part 2

2019 IPPS removes requirement for authentication of admission orders prior to discharge.

EDITOR’S NOTE: This is the second and final installment of a two-part series.

Last week I tackled the easy part, interpreting the new Centers for Medicare & Medicaid Services (CMS) regulations on the inpatient admission order, explaining what I think is appropriate to do if the admission order is not authenticated prior to discharge. And that means this week I have to provide some guidance on the more vexing situation, the complete lack of an admission order. And as I indicated last week, the guidance provided by CMS is vague and seemingly contradictory, so every hospital must evaluate the regulations themselves and determine what policy they are going to establish and follow.

What that really means is that my writings here are my personal opinion and do not represent official CMS policy, nor the official opinion of my employer. Read this, read the CMS rule, read the CMS sub-regulatory guidance, gather together all interested parties (whether they want to participate or not), and determine what is best for your hospital – then write a policy and follow it. Then keep watching for more guidance from CMS and make adjustments as necessary.

With that out of the way, what has CMS told us about hospital stays without an admission order? The 2014 Inpatient Prospective Payment System Final Rule, also known as the “two-midnight rule” (which, by the way, will be five years old on Oct. 1), reads that “in the extremely rare circumstance the order to admit is missing or defective, yet the intent, decision, and recommendation of the ordering physician or other qualified practitioner to admit the beneficiary as an inpatient can clearly be derived from the medical record, medical review contractors are provided with discretion to determine that this information constructively satisfies the requirement that a written hospital inpatient admission order be present in the medical record.”

This actually was not new; in a technical direction letter sent by CMS to the Medicare Administrative Contractors (MACs) in 2011, they said the same thing, providing as an example a patient who was placed in the hospital as outpatient with observation services, went on to have a cardiac catheterization, was determined to need bypass surgery, underwent surgery, and post-operatively required mechanical ventilation. CMS stated that in this case, there was no question of the physician’s intent to admit the patient as an inpatient.

Absent Admission Orders Should be “Rare:” How Often is That?

With that in mind, the first question to ask is how often is “extremely rare?” We really have no idea. When I asked this question during the CMS Open Door Forum, the answer was that the contractors determine it. But in the five years since CMS has used those words, no contractor has ever given a number or percentage to quantify it. Then we ask how the contractors would use their discretion. The answer here is that if they audit the case as part of a targeted or random audit and find the order absent during their normal review process, the contractors then will use their discretion. In other words, there is no condition code or occurrence code to be added to the claim to indicate that the hospital is invoking “intent” to allow a contractor to know that they need to consider using discretion – or even how often an admission is billed with an absent order. It seems it really boils down to the luck of the draw.

Was the Patient Formally Admitted?

The process of determining if a stay is “eligible” to be declared as an inpatient admission invoking intent should be a multi-step process. The first step is to determine if in fact the patient was formally admitted as an inpatient. While CMS has never defined “formal admission,” I think that a patient who has received their copy of the Important Message from Medicare (IMM), is registered as an inpatient, is receiving care based on a full set of orders beyond the emergency department, and is under the care of a practitioner with admitting privileges can be considered formally admitted as an inpatient, even in the absence of an admission order. If some but not all of these elements are present, you get to determine if formal admission occurred.

The Search for Intent

Next, one should determine if there is any indication in the medical record that the physician intended inpatient admission. The history and physical and progress notes from the attending should be reviewed for use of the word “admit.” The emergency department notes should be reviewed to see if “admission” was discussed with the attending. And the physician should be asked if he or she intended to admit the patient but either forgot to write the admission order or accidentally selected the wrong status, perhaps clicking the observation check box in haste. If this is the case, a notation should be made in the billing and/or utilization review notes of that discussion.

Was the Two-Midnight Rule Followed?

If the patient was formally admitted and there is documented evidence of the physician intent, the next step is to determine if the admission was appropriate and met the requirements of the two-midnight rule. If so, it seems appropriate to consider billing the stay to inpatient Part A for payment. The thought process and evidence used to make that determination should be documented in the event of an audit, with it being noted, for example, “patient received and signed IMM, care provided by Dr. Smith for five days for pneumonia. Discussed with Dr. Smith, who stated her intent was inpatient admission.”

Only You Can Prevent Absent Admission Orders

The process should not end there; a root cause should be sought. It should be determined how a patient was registered as an inpatient and given an Important Message from Medicare without the presence of an admission order. Perhaps a physician gave a verbal order that was relayed to the registration clerk, but inadvertently not transcribed in the chart. Perhaps a nurse knew the patient was going to need inpatient admission and related that information to the registration staff, who formally registered the patient, but the actual order was never obtained.

If the patient was formally admitted and there is evidence of physician intent to admit, but the hospital stay did not meet the requirements of the two-midnight rule, then the regulations work in your favor. You may simply bill the stay as outpatient Part B. Although not required, I think the patient should be notified in writing that even though they were told they were being admitted as an inpatient and received the IMM, their stay will be billed to Part B. This should avoid any confusion when they receive bills for their Part B coinsurance obligation, rather than their Part A deductible.

Who Would Do an Inpatient Only Surgery as Outpatient?

If the patient was not formally admitted and there is no written evidence of physician intent, or if one is present but the other is absent, a hospital still has the option to consider declaring intent based on the circumstances of the stay. In the case of a scheduled inpatient-only surgery, it is self-evident that the physician intended to admit the patient as inpatient; no physician wakes up in the morning and says to themselves, “today I am going to intentionally violate federal law by performing an inpatient-only surgery as outpatient.”

But once again, billing an inpatient-only surgery that did not have an inpatient admission order to Part A should also lead to an analysis and process improvement. Perhaps when the physician scheduled the surgery, the wrong CPT code was provided, so it was not apparent that it was inpatient-only until the coders actually read the operative report. Perhaps an outpatient surgery was converted to inpatient only intraoperatively and there was no process to have such occurrences flag the utilization review staff to check the case. And many inpatient-only surgeries are performed emergently on patients presenting to the emergency department in extremis. In this case, patient care was clearly the top priority, and a missed admission order should be understood.

Swimming Through Murkier Waters

The case for outpatient surgery patients whose stay exceeds two midnights due to delayed recovery or a complication is more complex and more nebulous. In these cases, you most likely will not have any evidence of formal admission, with no IMM provided to the patient, nor any use of the word “admit” in the progress notes. Yet, their medically necessary stay of over two midnights warranted inpatient admission. The decision to declare intent to admit and bill to Part A in these cases should be made on a case-by-case basis, taking into account the total length of stay, the severity of the symptoms that warranted continued hospital care, and the robustness of the documentation of that medical necessity.

Patients hospitalized for medical conditions whose stay exceeds two midnight pose a similar dilemma. An admission order should have been obtained. This could occur in two situations. If a patient presented in extremis and the admission order was missed because patient care came first, as with a patient with septic shock who required continuous care from the physician and was then whisked to the intensive care unit, would seem to present a good case for declaring intent to admit. On the other hand, the asthmatic patient placed as an outpatient with observation who does not improve and requires care beyond the second midnight, staying another one or two days, seems to present less of an opportunity to declare that intent. But what if that asthmatic got significantly worse and the patient was transferred to the intensive care unit and intubated: would that warrant declaring intent?

On the other hand, keeping any Medicare patient as an outpatient past the second midnight violates the primary tenet of the two-midnight rule, that being that “the decision to admit becomes easier as the time approaches the second midnight, and beneficiaries in necessary hospitalizations should not pass a second midnight prior to the admission order being written.” If that is the edict of CMS, should we not be considering declaring intent in any case over two midnights if medical necessity exists and it is an “extremely rare occurrence,” whatever that is? That is a question each hospital must answer on its own.

Communication with your Billing Staff Crucial

It is also important to work with the billing staff on this process, since they will be the ones who most likely discover the absence of the admission order and need to know who to contact to resolve the issue. They then will be the ones entering the information indicating the claim type, the dates of care, and the date of “intended” inpatient admission. That date could be the first date of care, as with a scheduled inpatient-only surgery, but may be the day after the start of care, in the case of a medical patient who was an outpatient receiving observation services and then worsened. It should be noted that if the patient is sent to a skilled nursing facility (SNF) with Part A coverage after their hospital stay, there must be an inpatient stay of at least three days in the common working file. If the incorrect dates are entered on the claim, that SNF claim may be denied and create a very uncomfortable situation for all.

As you can see, there is no right or wrong answer to declaring intent when the admission order is absent. You provided excellent care and you used significant hospital resources to care for the patient, so shouldn’t you get paid properly for that care? Of course you should. But when you agreed to participate in the Medicare program, you agreed to follow the rules. And obtaining an admission order is one of those rules. When those two issues collide, you get to decide how to resolve it. Hopefully, this overview will serve as your collision avoidance system and guide you to develop a compliant road map for your hospital.

Program Note: Register to listen to Dr. Ronald Hirsch every Monday on Monitor Mondays at 10-10:30 a.m. ET.


Ronald Hirsch, MD, FACP, CHCQM, CHRI

Ronald Hirsch, MD, is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays. The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

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