Medicare Advantage Policies, ABNs, and QIO

Let’s start with what seems to be a never-ending topic of conversation: the new policies by Medicare Advantage (MA) plans to deny or reduce payments for inpatient admissions.

Last week Independence Blue Cross announced that starting in March, they will adopting Aetna’s tactic to pay less for inpatient admissions that do not meet “inpatient criteria.” But unlike Aetna, Independence will be using InterQual, rather than MCG, and will only be approving inpatient stays of six days or more without review – whereas Aetna is much more generous and allows five days or longer for a claim to be paid as inpatient.

For those who have not heard about this, the policy derives from the Centers for Medicare & Medicaid Services (CMS) requirement that MA plans follow the Two-Midnight Rule. Apparently, as Aetna’s MA plans saw the number of inpatient admissions climb and profits decline, they realized that they could both follow the Two-Midnight Rule and reduce payments to hospitals by allowing inpatient admission whenever requested, but then set the payment for many of those inpatient admissions at a much lower rate by applying commercial criteria and setting a high bar for payment at the inpatient rate.

And because the patient maintains their inpatient status, CMS has determined that the lower payment is a contractual issue that does not involve them.

This is going to be a growing problem for hospitals without access to both MCG and InterQual. The plans allow a post-payment peer-to-peer discussion, but without access to the actual criteria to know if the MA plan medical director is applying them correctly – and without a physician versed in the use of criteria, these discussions are likely to result in limited success.

A fascinating aspect of this policy is that for 86 percent of medical inpatient Diagnosis-Related Groups (DRGs), the Medicare geometric mean length of stay (GMLOS) is under five days – and 95 percent are under six days. That means that even if your patient remains hospitalized the “average” length of stay, you may have a significant reduction in your payment from the “appropriate” amount if “criteria” are not met.

I have also discussed here how the new CMS regulations require MA plans to notify the patient within 72 hours if they issue a denial, and many plans are asking the hospital to deliver that notice to the patient. I suggested telling the payers that the obligation is theirs to fulfill and not the hospital, thereby forcing them to figure out how to get it delivered, but Tiffany Ferguson, CEO of Phoenix Medical Management and Talk Ten Tuesdays commentator, has an even better idea.

She suggests telling the payer that you will deliver the denial letter, but that at the same time, you will be asking the patient to sign the Medicare appointment of representative form (CMS-1696), and the hospital then will be filing a formal appeal on behalf of the patient. Now, that is ingenious, as MA plans do not like patient appeals, which must be reviewed and then forwarded to the Quality Independent Contractor (QIC) if not overturned.

Moving on to the never-ending saga of expiring forms, we now need to add the Advance Beneficiary Notice (ABN), which expired Jan. 31. As you’d expect, I contacted CMS, and they once again said that the expired form remains valid until the new version is approved. Now, as with the other forms, the content is very similar, but in one way, CMS really has gone out on a limb. The old ABN requires the patient to check one of three boxes about how they want to proceed. The new form changes those small boxes to small circles. It will be interesting to see if that dramatic change gets approved by the Office of Management and Budget.

And finally, you may recall that two weeks ago, I told you about a hospital that was told by a QIO that they could not charge a patient for care because the Detailed Notice of Discharge (DND) was expired. They complained to CMS and finally got an apology from the QIO.

Well, last week the other QIO had an article in their monthly newsletter indicating that the DND is required, but has no effect on the patient’s financial liability.

Clearly, both QIOs received some remedial education from CMS. It is great to see that CMS does take your comments and concerns seriously. They often will not respond directly to your comments and concerns, but they do take action when it is warranted.