Hospital Admissions: Combining Two into One Doesn’t Add Up

Should hospitals combine two admissions into one? In the absence of CMS guidance, hospitals are urged to do the right thing.

Today I have a confession to make. For the last five years, I have been lying.

Now, don’t get me wrong; I have not been doing it on purpose. In fact, I had a very noble purpose for saying what I have been saying. But the time has come to confess.

What have I been saying? Let me use a case example to illustrate. Say a patient is admitted as an inpatient with pneumonia. They receive antibiotics and fluids and seem to improve. On day five, the patient has a follow-up chest X-ray and is discharged home. But the patient returns to the emergency department (ED) the next day with shortness of breath.

The ED doctor looks at the chest X-ray from the day of discharge and notes that the patient had developed a pleural effusion. Furthermore, the discharge vital signs were not normal. The patient is admitted again as inpatient, staying another week.

It was clear that the first discharge was inappropriate; the patient was not stable enough to go home. Now, here is my confession: I have been advising hospitals to combine these two admissions into one. If the readmission was their fault, it did not seem right that the hospital should bill for it and get a second diagnosis-related grouping (DRG) payment.

But unfortunately, there is no guidance from the Centers for Medicare & Medicaid Services (CMS) that allows hospitals to do that. The Medicare Claims Processing Manual tells hospitals to combine admissions when the patient is readmitted on the same calendar day for a related reason, and it also allows hospitals to combine two admissions if the second admission is planned and the patient is placed on a leave of absence. CMS also tasks each Quality Improvement Organization (QIO) with reviewing readmissions, and they can deny the second admission if they feel the services should have been provided during the first admission – but only upon retrospective review.

So since there is no Medicare guidance on how to bill a readmission when the first admission is premature, what should a hospital do? Well, I see three potential billing scenarios. The first would be to go ahead and use the planned readmission billing guidelines even though the readmission was not planned. The second would be to bill the second admission as a no-pay 110 claim so that the diagnoses and procedures could be entered in the common working file to be used for calculations of quality measures. The third option would be to follow the regulations to the letter and bill the second admission and collect both DRG payments.

Billing a no-pay 110 claim may be appropriate in some cases, but only if the hospital’s actions clearly caused the readmission, such as sending a patient home with the wrong medications. But technically, there is no Medicare manual provision that allows that. Collecting two full DRGs just seems wrong. So in many cases, the most rational way to bill would be to combine the two admissions into one. But is it allowed?

I contacted two Medicare Administrative Contractors (MACs), and neither could tell me if two admissions could be combined or if a hospital was permitted to submit a no-pay claim in this situation. The MAC representatives said their best answer was to follow the regulations as written, bill two admissions, and accept two payments.

So from now on, my response to this situation will be to decide if the second admission was fully preventable – and if so, to bill it as a payable claim, but also call the QIO to self-report it. If the readmission was not preventable, then I still would recommend combining them because it is the right thing to do, but I would admit that I don’t know how that is done.

Although I understand that the Medicare manuals cannot possibly address every billing scenario, it should not be so hard to do the right thing.