DEVELOPING: Countdown to New Medicare Appeal Process

By now you may have heard that the Trump Administration has halted external correspondence from government agencies, including the U.S. Department of Health and Human Services (HHS). It is still too early to know what that really means. So far, I have seen the publication of a few notices in the Federal Register, although no notices from HHS, and last Thursday I sent two questions to a Centers for Medicare & Medicaid Services (CMS) department that usually responds quickly – and they have yet to answer.

This may be an issue, as the rollout of the Medicare Change of Status Notice (MCSN) is just over two weeks away, and there are sure to be questions that arise. And speaking of the MCSN, let me add some additional information.

First, I had several providers tell me they contacted their Quality Improvement Organization (QIO) to find out what phone number to put on the form, and the response was “we don’t know what you are talking about.” I checked with CMS, and that was just miscommunication within the QIOs. Both Livanta and Acentra (previously known as Kepro) will be handling these appeals, and Dr. Elizabeth Dunbar, physician advisor for Novant Health, posted that at least for Acentra, she was informed that the phone number is the same number as for inpatient discharge appeals.

I will note that it is a bit worrisome that Acentra will be doing some of these appeals. Why? Well, these appeals are, in essence, short-stay inpatient admission reviews; the QIO will be deciding if the correct admission status was ordered. And when the Two-Midnight Rule was introduced in 2013, CMS had both QIOs doing these audits.

But then CMS gave the contact to Livanta in 2019 to do all short-stay audits. Now, why they stopped allowing Kepro to do these audits was not clear, but what it does mean is that for the last five years, Acentra has had no experience reviewing these cases. I am sure they are fully capable of getting their reviewers up to speed on the rule, but nonetheless, I would hope all of us hold both QIOs accountable for reviewing the patient appeals appropriately.

We have to remember that if you changed a Medicare patient from inpatient to outpatient, your utilization review (UR) committee physician and the attending physician both determined that the change was appropriate. So my expectation is that the QIOs will rule in favor of the hospital in 100 percent of these cases.

And that brings up another issue. What if the QIO determines that inpatient was the correct assignment, and you disagree? Do you object to it and ask for a reconsideration, or do you accept it and take the significantly higher DRG payment and keep quiet? And if the QIO determined that inpatient was correct, is that admission now exempt from any further audits? And if you want to object, what is the appeal process? CMS has laid out the appeal process for patients, but not for providers.

And let me remind you that the way to avoid this whole process is to get the status right for every patient up front. The Two-Midnight Rule is really not that complicated. Let the doctors tell you the patient needs to be hospitalized, and then have utilization staff and physician advisors help determine the right admission status. If you never do a Condition Code 44 change, you will never have to give out a Medicare Change of Status Notice.

I will also mention that there has been discussion about one tactic to avoid having to give out the MCSN: to forego the Condition Code 44 process to change an inpatient to outpatient completely, and simply use the post-discharge self-denial and rebill process, often called the W2 process. This tactic would be completely compliant; there is no regulation requiring the use of the Condition Code 44 process when a patient is inappropriately admitted as inpatient.

But the question you must ask is whether it is the right thing to do. And it is complicated.

To get you thinking, consider these questions. Are you respecting the patient’s right to be informed? Are you delaying cash flow? Are you creating more work for your coding and billing staff? Are you easing the burden on the staff who must execute the Condition Code 44 process? Are you depriving patients of a mandated appeal right?

There is no one right answer, and I will leave you to contemplate that.