Decoding Cancelled Surgery – When, Why, and What

I was recently presented with a case and asked about the proper way to handle it, and I thought it would be a good matter to cover here.

I have written about surgery in the past, but it is always worth another look, since such cases will show up in every hospital at some point.

This patient was an elderly female with a litany of the usual medical issues, including diabetes, chronic kidney disease, coronary artery disease, and atrial fibrillation. The planned procedure was placement of a left atrial occlusion device, the Watchman.

Of course, many of you could likely predict that my first question was “who is the insurer?” And as I think about it, in the past, we often presented cases by noting the patient’s race, such as “this 47-year-old black female.” But with the increasing realization that race-based decisions in healthcare have no data to support them, perhaps we should adjust to presenting cases by instead noting the payor, such as “this 67-year-old female, covered by a Blue Cross Medicare Advantage plan, presents with…” since their insurer can influence what care can be provided and who can provide it.  

In this case, the patient had traditional Medicare. So, the procedure was scheduled as inpatient, since the procedure was on the Medicare Inpatient-Only List (IPO). She arrived at the hospital and signed her Important Message from Medicare (IMM) and the myriad of other papers that we present to patients that no one ever reads. She was prepped for her procedure, taken to the procedure room, and anesthesia started. The transesophageal echocardiography (TEE) probe was inserted, and it was noted that the dimensions of the left atrial appendage were such that the Watchman could not be used. The procedure was terminated, and the patient was awakened and discharged soon thereafter.

How do we handle this? We must look at two aspects of the case: admission status and billable services.

Should this visit be billed as an inpatient admission? That’s a reasonable question. This patient was appropriately scheduled as an inpatient, and on arrival she was formally admitted as an inpatient. But with every cancelled inpatient procedure, we need to ask: since it was cancelled, should the reason for the cancellation have been found before the patient even arrived? In this case, was a prior TEE done, with assessment of the size of the left atrial appendage? If so, how long ago? Should one have been done more recently to ensure that the patient was a Watchman candidate?

If there was a lapse here, you should not bill inpatient, but instead either do a quick Condition Code 44 change to outpatient – or self-deny and rebill to Part B. This would also be the proper action if in the pre-op area the patient reported a sore throat or fever, or a lab test was performed that was abnormal.

In fact, some hospitals have adopted a policy that an elective inpatient surgery patient is not considered formally admitted as an inpatient until the patient arrives in the operating room. This simplifies the situation wherein a condition found in pre-op leads to cancellation. Since the patient has not yet been formally admitted, the services provided in pre-op can be billed as outpatient services, avoiding the need for a Condition Code 44 change or self-denial and rebill. 

If the cancellation occurred after the procedure was commenced, and was truly unavoidable, such as the patient developing an arrythmia after anesthesia was induced or the patient developing unrelenting hypotension when the femoral catheter was placed, then it is appropriate to bill the inpatient admission.

Now that you know what admission status to bill, what services can go on the claim, be it an inpatient claim or an outpatient claim? Well, it should not have to be said that you cannot bill for the placement of the Watchman device with the appropriate ICD-10-PCS code, since the placement was not even started. If your operating room staff opened the Watchman packaging, you better hope that Boston Scientific will give you a refund, because the Centers for Medicare & Medicaid Services (CMS) won’t pay you anything for a device that was never used. But the claim can include the codes for what was done: the work in pre-op, anesthesia services, the TEE (if done), the femoral artery catheter placement, and so on.

Then the complex payment rules kick in, be it inpatient or outpatient, and you get paid what you get paid. For an inpatient claim, the principal diagnosis in this case will be atrial fibrillation, and depending on which secondary diagnoses are coded, it will fall into DRGs 308 to 310, which have weights of 0.55 to 1.20. In comparison, if the Watchman was placed, the DRG would be 273 or 274, with weights of 3.24 or 3.90. Interestingly, if the device was attempted to be placed and it was unsuccessful, according to billing instructions from the manufacturer, and my attempts to assign the appropriate DRG based on the ICD-10-PCS codes, that would fall into DRG 228 or 229, which have weights of 3.18 and 5.04.  

For outpatient, the (nearly incomprehensible) Ambulatory Payment Classification (APC) payment rules apply, but the payment would likely be under $1,000, with the TEE paying about $526. In addition, depending on the point of cancellation, there may be modifiers that must be applied to specific services.

In summary, cancelled inpatient surgeries require special attention.

Be sure that the correct status and services are billed. Billing for an inpatient admission when the proper claim would be outpatient can lead to an overpayment with increased scrutiny. Ensuring that the claim uses the appropriate procedure codes, either ICD-10-PCS or HCPCS, is also crucial to ensure that the payment is appropriate.

Programming note:

Listen to Dr. Ronald Hirsch every Monday morning as he makes his rounds on Monitor Mondays, and sponsored by R-1, RCM at 10 Eastern with program host Chuck Buck.