Outpatient in a Bed – Compliance is Key

Today I am going to do something a little different. I am going to write about outpatient care in a bed from the regulatory side, and then Tiffany Ferguson is going to address operationalizing it in a separate article in Tuesday’s ICD10monitor.

But first, a bit of news. First, never doubt the power of one person. Some of you may have heard of Richelle Marting, a healthcare lawyer from Missouri who spoke at the National Physician Advisor Conference. Well, one of her clients recently had a problem. They were being denied payment for a specific type of bariatric surgery because the claim did not clear the coding edits. The problem was that the surgery was being done laparoscopically, but the National Coverage Determination (NCD) required three codes describing the surgery, and one of the three had to be a code for an open surgery. It made no sense at all. But Richelle got to work and got the Centers for Medicare & Medicaid Services (CMS) to change the rules, and they even made it retroactive to 2020! Congratulations, Richelle.

Second, none of us like prior authorizations, especially physicians who are simply trying to care for their patients. And by now you all should have heard about the recent audits by the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) that found that Medicare Advantage (MA) plans were using prior authorizations to deny care to beneficiaries that would have been covered if they were enrolled in traditional Medicare. Well, the OIG tweeted about a recent “Impact Brief” they published on this issue.  And that’s great; the more attention to the issue, the better. But what irked me was that the tweet stated “prior authorization requirements in Medicare Advantage occasionally obstructed enrollees’ access to vital services.” Occasional??? More than 13 percent of denials were inappropriate. That’s not occasional. That’s frequent, and that’s way too much so. OIG, do better.

Now, about outpatient in a bed. This came back up with a recent post on RAC Relief wherein someone asked if outpatient in a bed requires a physician order. My response, as some of you probably could have predicted, was that outpatient in a bed is not a real thing. What I then explained was that outpatient in a bed is not a real admission status; a patient is either an inpatient or an outpatient. I won’t go through the requirements to be an inpatient but suffice to say that any patient who has not met the requirements to be an inpatient is an outpatient.

But the real reason many people ask about outpatient in a bed is that they have patients in the hospital who don’t require hospital care, and they want to separate them from those with medical necessity for payment and tracking purposes. So, a few tips.

First, I occasionally hear that a patient having outpatient surgery should always go home the same day. That’s not true. While we are getting much better at optimizing care, there are many outpatient surgeries for which an overnight stay is absolutely the standard of care in select patients. Those patients should not be lumped in with the outpatient who is staying overnight because it is starting to snow or they cannot get a ride. Now, feel free to name this sub-status anything you want; many use the term “extended recovery,” but the key is that they are outpatients, their care is not custodial, and that recovery time should be billed as recovery services, not as “outpatient in a bed” hours.

Second, once an inpatient, always an inpatient. Unless you are a rural or critical access hospital and your inpatient is transitioning to a swing bed, an inpatient remains an inpatient until they either die or are formally discharged. You cannot discharge a patient from inpatient care when their acute care is completed and then create an outpatient encounter for the custodial care. We wish you could, so you could get paid separately for ancillary services, but you can’t. Rather, you should leave them as inpatients and work with your billing staff to apply the correct occurrence span code to the days that are not necessary.

So, if outpatient in a bed is not real, does that mean it’s prohibited? Nope; feel free to use it for the patient staying because it’s snowing or waiting for a ride or waiting for the family to get back from Disney World. But as Tiffany will discuss tomorrow, the key is to ensure that when it is ordered, there is communication between the clinical and the finance teams, so when these outpatients without medical necessity are in the hospital, everyone knows – and the hours and days are properly tracked and action can be taken to minimize giving away all this free care.

In addition, as I noted, “outpatient in a bed” is not a real service, as are observation services or recovery room services. And as such, it does not require an order. In fact, the outpatient who is hospitalized, be it a surgical patient whose in-hospital recovery has ended, an outpatient receiving observation services whose need for hospital care has ended, or a patient being hospitalized from the ED for custodial care, can have their care be designated as “outpatient in a bed” by the case manager, the bedside nurse, the physician, or even the compliance officer. If hospital care is not needed, the care should not be billed as necessary care.