Special Bulletin: A Troubling Remark in OIG Language

Special Bulletin: A Troubling Remark in OIG Language

I’m working on a U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) audit wherein the question invites the reviewer to disregard Medicare regulations. 

The question reads: 

“Does the documentation support inpatient admission and level of care?  (InterQual Level of Care Criteria) [failure to comply with InterQual Level of Care Criteria will not be treated as an error, but will be noted and explained in the RRL.” 

There is so much to pick apart here.  First, I am surprised that the OIG has a question that refers to an “inpatient level of care.” Ron Hirsch (Dr. Ronald Hirsch) and I have written at length about the fact that Medicare admission status is determined by the Two-Midnight Rule.

Under the Two-Midnight Rule, an outpatient is defined as a patient who needs hospital care and is expected to need it for fewer than two midnights. An inpatient is a patient who needs hospital care and is expected to need it for more than two midnights.

Both outpatients and inpatients require hospital care. There is no distinction between the “level of care” needed for an outpatient and an inpatient. I will emphasize this. The amount of care needed by a hospital outpatient can be more, less, or the same than the amount of care needed by a hospital inpatient.

Medicare has determined that the distinction between an inpatient and an outpatient is temporal, not based on the patient’s medical needs. The OIG form should not make any inquiry into the “level of care,” except to the extent the question is “did this patient require hospital care?”

My second concern with the question is the reference to InterQual. To be fair to the OIG, they explicitly said in the form that InterQual would not be used as criteria to determine an error. It will be used in the “RRL,” whatever the heck that is.

If the OIG wants to look at InterQual, they have as much right as the next person to do so. It is a problem only if someone asserts that InterQual determines a patient’s status. But by including it in the question, it invites the reviewer to focus on InterQual, and in a case I am working on, the reviewer did just that.

Services were denied because “the InterQual criteria for the inpatient admission and level of care were not met based on the surgical procedure performed.” Now, what makes this particularly interesting is that the inpatient case in question involved a total knee arthroplasty.

The patients in question were to be discharged to a skilled nursing facility (SNF). In a Monitor Monday segment a few weeks ago, I talked about how days awaiting placement in an SNF counts towards the Two-Midnight Rule. But it’s nice to have really knowledgeable co panelists, because (Dr.) Ron Hirsch taught me something even more important. The 2018 Outpatient Prospective Payment System Final Rule says that:

“We agree that the physician should take the beneficiaries’ need for post-surgical services into account when selecting the site of care to perform the surgery. We would expect that Medicare beneficiaries who are selected for outpatient TKA would be less medically complex cases with few comorbidities and would not be expected to require SNF care following surgery.” 82 FR 52356,52524, https://www.federalregister.gov/d/2017-23932/p-2018, bolding and underlining added. 

The reviewer was clearly unaware of this. Hopefully, the OIG will recognize the error in the review and retract it. If you find yourself under OIG scrutiny, this is something to watch.

Facebook
Twitter
LinkedIn

David M. Glaser, Esq.

David M. Glaser is a shareholder in Fredrikson & Byron's Health Law Group. David assists clinics, hospitals, and other health care entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David's goal is to explain the government's enforcement position, and to analyze whether this position is supported by the law or represents government overreaching. David is a member of the RACmonitor editorial board and is a popular guest on Monitor Mondays.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Sepsis: Bridging the Clinical Documentation and Coding Gap to Reduce Denials

Sepsis: Bridging the Clinical Documentation and Coding Gap to Reduce Denials

Sepsis remains one of the most frequently denied and contested diagnoses, creating costly revenue loss and compliance risks. In this webcast, Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, provides practical, real-world strategies to align documentation with coding guidelines, reconcile Sepsis-2 and Sepsis-3 definitions, and apply compliant queries. You’ll learn how to identify and address documentation gaps, strengthen provider engagement, and defend diagnoses against payer scrutiny—equipping you to protect reimbursement, improve SOI/ROM capture, and reduce audit vulnerability in this high-risk area.

September 24, 2025
2026 IPPS Masterclass 3: Master MS-DRG Shifts and NTAPs

2026 IPPS Masterclass Day 3: MS-DRG Shifts and NTAPs

This third session in our 2026 IPPS Masterclass will feature a review of FY26 changes to the MS-DRG methodology and new technology add-on payments (NTAPs), presented by nationally recognized ICD-10 coding expert Christine Geiger, MA, RHIA, CCS, CRC, with bonus insights and analysis from Dr. James Kennedy.

August 14, 2025
2026 IPPS Masterclass Day 2: Master ICD-10-PCS Changes

2026 IPPS Masterclass Day 2: Master ICD-10-PCS Changes

This second session in our 2026 IPPS Masterclass will feature a review the FY26 changes to ICD-10-PCS codes. This information will be presented by nationally recognized ICD-10 coding expert Christine Geiger, MA, RHIA, CCS, CRC, with bonus insights and analysis from Dr. James Kennedy.

August 13, 2025

Trending News

Featured Webcasts

E/M Services Under Intensive Federal Scrutiny: Navigating Split/Shared, Incident-to & Critical Care Compliance in 2025-2026

E/M Services Under Intensive Federal Scrutiny: Navigating Split/Shared, Incident-to & Critical Care Compliance in 2025-2026

During this essential RACmonitor webcast Michael Calahan, PA, MBA Certified Compliance Officer, will clarify the rules, dispel common misconceptions, and equip you with practical strategies to code, document, and bill high-risk split/shared, incident-to & critical care E/M services with confidence. Don’t let audit risks or revenue losses catch your organization off guard — learn exactly what federal auditors are looking for and how to ensure your documentation and reporting stand up to scrutiny.

August 26, 2025
The Two-Midnight Rule: New Challenges, Proven Strategies

The Two-Midnight Rule: New Challenges, Proven Strategies

RACmonitor is proud to welcome back Dr. Ronald Hirsch, one of his most requested webcasts. In this highly anticipated session, Dr. Hirsch will break down the complex Two Midnight Rule Medicare regulations, translating them into clear, actionable guidance. He’ll walk you through the basics of the rule, offer expert interpretation, and apply the rule to real-world clinical scenarios—so you leave with greater clarity, confidence, and the tools to ensure compliance.

June 19, 2025
Open Door Forum Webcast Series

Open Door Forum Webcast Series

Bring your questions and join the conversation during this open forum series, live every Wednesday at 10 a.m. EST from June 11–July 30. Hosted by Chuck Buck, these fast-paced 30-minute sessions connect you directly with top healthcare experts tackling today’s most urgent compliance and policy issues.

June 11, 2025

Trending News

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24