Livanta Memo Highlight of Healthcare News Week

The news cycle never seems to rest. First, a bill has been introduced in Congress to once again try to get observation days to count for the three-day stay requirement for Part A skilled nursing facility (SNF) coverage by Medicare.

Similar bills have been proposed for over 10 years and never get anywhere, so I have little faith that this one will be different. In addition, it makes no sense to limit it to counting observation days. Many Medicare beneficiaries would benefit from SNF care without any hospital stay.

We simply need Congress to realize that medical care in 2023 is not the same as in 1965, and the whole three-day inpatient stay requirement needs to go away.

I also have an update on the Livanta memo about short inpatient stays that I have been discussing for the last two weeks. I was looking through my files and noted that in March 2023, Livanta released a report on their short-stay inpatient audits that they had performed up to that time. And to my amazement, they reported that they had denied 11 short inpatient stays with the diagnosis of melena and 11 with a diagnosis of gastrointestinal hemorrhage. That’s the exact circumstances of one of the case examples in their memo.

In addition, they denied 10 cases with non-ST elevation MI, 10 admissions with ventricular tachycardia, and amazingly, 10 with complete heart block. Those results from earlier this year are in complete opposition to what the memo outlines as acceptable inpatient admissions. It is hard to argue that a patient with ventricular tachycardia or complete heart block is not at high risk of an adverse event. Of course, there are no case details, simply the primary diagnosis, but if they allow inpatient admission for a patient with resolved angioedema, how could they deny complete heart block?

But the bigger news is that on Friday afternoon, Aug. 8, Nina Youngstrom’s newsletter, the Report on Medicare Compliance, reported that the Centers for Medicare & Medicaid Services (CMS) confirmed to her in writing that they had reviewed the Livanta memo prior to publication.

That is huge.

If CMS did not support the case examples, they would not have let Livanta release it.

Now, the talk on discussion groups is that most don’t trust Livanta to abide by this, and I am also mildly skeptical, but knowing CMS reviewed this should go a long way to reducing hesitation at least about admitting all emergent cholecystitis and appendicitis as inpatient, if nothing else. Get a copy of her article and read it.

This new information from Livanta also brings up a fascinating proposal relayed to me by a hospital revenue cycle leader. Over the last year, they have had more than a few Medicare patients who were admitted as inpatients for cholecystitis or appendicitis and had a one-day stay, whereby the hospital then self-denied and rebilled to Part B. This person is considering refunding the Part B payment, then filing a corrected claim based on the inpatient order. That will get them the DRG that Livanta states is the appropriate payment and get an additional $7,000+ per case. In fact, now that Livanta has provided these examples, maybe everyone should go back and look at their short stays that were self-denied after discharge. Now, what is unclear is how this would be viewed. If you followed the requirements for self-denial with utilization review (UR) committee scrutiny and patient notification, what’s the process to reverse that? I honestly don’t know.

One last topic for today. I was contacted by a hospital asking how CMS calculates length of stay (LOS). The concern was that her hospital leaders calculate it from the start of care to discharge, then compare that to the Medicare GMLOS for the DRG.

Well, CMS uses the date of the inpatient admission for LOS calculations and ignores any outpatient or observation days: exactly the opposite of what her leaders do. As I told this person, measuring something this way is statistical malpractice. The only way they can have an LOS better than the GMLOS is to discharge unstable patients, which would be medical malpractice.

I hope this person can resolve this; it’s really senseless.