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As reported on RACmonitor on April 18, the BFCC-QIO audits have not been without problems. The audits went back further than anticipated, the timelines for audit results and scheduling provider education are routinely being missed, and the timely filing deadline for hospitals to rebill denied claims to part B is fast approaching on many of the first-round denied claims.

And now CMS has announced that the audits have been suspended. In a notice posted on its website, Livanta, one of the two BFCC-QIOs, stated, “On May 4, 2016, CMS notified the BFCC-QIOs of a temporary pause of Two-Midnight Reviews in order to improve standardization across the program. During this period, Livanta will be collaborating with CMS and the other BFCC-QIO to ensure consistency in how the rule is applied to QIO case review.” RACMonitor has been told by a hospital that contacted Livanta prior to that statement that CMS has instructed Livanta to re-audit all claims that were denied in the first round “to ensure Livanta was interpreting the rule correctly.” 

To quote Yogi Berra, this is deja vu all over again. 

When the MACs started the auditing of short-stay inpatient admissions as part of the Two-Midnight Rule, there were reports from around the country that the MAC reviewers were misinterpreting the rule. Hospitals spent a great deal of time educating the MACs on the proper interpretation of the rule. When CMS announced the BFCC-QIOs were taking over the audits, there was a sigh of relief, as it was thought the QIOs would guarantee more physician involvement in the review process, but with this report it appears our optimism was all for naught.

Discussion on some internet user groups indicates that the most common error was the QIOs were misinterpreting the benchmark and denying admissions of patients who spent one midnight in the hospital as an outpatient, either in the emergency department receiving care or receiving observation services, and then were admitted as inpatient and spent a second, medically necessary midnight. The regulations are clear that no patient in a necessary hospitalization should pass the second midnight without being admitted as an inpatient without differentiating the status of the patient for that first midnight, yet the QIOs were requiring two inpatient midnights to approve admissions.

There were also reports of denials for lack of medical necessity for the second midnight, which suggests that once again hospitals will be facing the problem of determining which physician’s judgment is correct—the treating physician or the QIO reviewer physician.

There was also concern that the second round of records were requested before the first educational sessions took place, so hospitals had no opportunity to incorporate their takeaways into their work processes, and it is believed CMS will also be addressing that when the audits resume.

CMS has not released any timelines for resumption of the audits, so be sure to listen to Monitor Monday for the latest updates.

About the Author

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at Accretive Physician Advisory Services at Accretive Health. 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. 

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