Important: Livanta Confirms Stance on One Day Inpatient Admissions

As I reported last week for RACmonitor, Livanta released a newsletter about short inpatient stays at the end of July. Their case examples were, to put it mildly, surprising. And as I discussed, I provided them some feedback – and they were kind enough to respond to me. I expected them to backtrack on some points, based on my experiences defending one-day inpatient admissions that had been denied in prior audits, but they stuck to their case examples.

Overall, their interpretation of the provisions of the Two-Midnight Rule seems much more liberal than previous communications from them and the Centers for Medicare & Medicaid Services (CMS).  

How so? First, they continue to insist that the Medicare patient presenting to the ED who requires a cholecystectomy or appendectomy can be admitted as an inpatient even if they are likely to go home the next day, and regardless of the patient’s comorbidities.

Now, they did make it clear that the patient’s condition should be emergent, meaning that if the doctor is using the ED to expedite the evaluation and treatment, it would not qualify for inpatient admission. I can see that happening with gallbladder disease, but rarely is a patient with acute appendicitis worked up as an outpatient. Once again, the documentation should support the emergent presentation. While patients with these acute surgical needs are significantly less common than patients with heart failure, the ability to admit these patients as inpatients will lead to an increase in compliant revenue by at least $6,000 – and potentially much more for teaching hospitals and hospitals in underserved areas.

Their apparent change in stance also applies to medical patients. If you recall, there was also a patient with angioedema and a patient with a GI bleed. In both those cases, the patient’s description was that of someone who was clinically stable. But Livanta stuck by their support of inpatient admission, stating that in both cases, the patient was at risk of a relapse and required close monitoring.

They seemed to differentiate between close monitoring and routine observation without any details about what separates their definitions, so that is an unanswered question.

They also stressed that the documentation must support the requirement for more than routine monitoring. As they said, “since we do not question inpatient orders that can be supported by the record, we would approve this case.” They also did not specify that the physician must explicitly state that they were admitting individuals as inpatients based on increased risk, despite an expectation of a stay of less than two midnights, but implied that the description of the patient’s condition would suffice to illustrate that increased risk.

Livanta and I also had an esoteric discussion about their contention that there are medications that “can only be given as inpatient.” With that, I disagreed. Their example was intraarterial thrombolytic agents, which can be given for stroke or pulmonary embolus. But my argument is that for most of these patients, the patient’s status at the moment of the infusion is actually outpatient, because patient care comes first, and the inpatient order usually does not get written until the patient is stabilized, which is almost always after the treatment.

The same, by the way, also applies to inpatient-only surgery. The reality is that many patients have inpatient-only surgery as outpatients, then are formally admitted as inpatients after completion of the surgery. Yes, it must be an inpatient Part A claim for the surgery to be paid, but the three-day payment window allows the surgery to appear on the claim even if the surgery was performed as outpatient.

The Medicare Benefit Policy Manual, Chapter 1, even allows an inpatient Part A claim if the whole stay was outpatient, in rare circumstances. (I warned you it was esoteric.) It’s long past time for the phrase “only as an inpatient” was removed from use, especially by those who should best know the regulations. This issue is surely less significant to all of you, but for the regulatory nerd that I am, it’s crucial that they understand the difference.

Now, what should you all do?

First, go get the Livanta newsletter. Save a copy of it for reference. Then arrange a meeting with your utilization review staff, your physician advisor, your compliance team, and your denials team, and decide what changes to your processes, if any, are appropriate. Especially be sure to use this document if your short stays get audited and they deny any cases.

I know from my experience that medical directors have generally not been as generous with approval of one-day inpatient stays. In one case, the Livanta medical director denied a one-day inpatient admission for an 80+-year-old patient with a first-time grand mal seizure and a post-ictal period, noting that “I routinely send these patients home directly from the ED.”

And it is important to remember that since Livanta is the designated CMS contractor for short-stay reviews, we can take their examples as also applicable to the Medicare Advantage plans in 2024, when they will be held to the Two-Midnight Rule, as established in CMS-4201-F and codified in 42 CFR 422.101.

Programming note: Listen to Dr. Ronald Hirsch as he makes his Monday Rounds on Monitor Mondays, 10 Eastern, with Chuck Buck and sponsored by R1-RCM.