Will OIG’s Latest Report on Short Stays Lead to More Administrative Harm?

Last week I discussed the new-to-me terminology of “the patient-directed discharge.” Well, this week my new term is “administrative harm,” which was highlighted in an article in the Journal of the American Medical Association (JAMA). This is defined as, “the adverse consequences of administrative decisions within healthcare” and “directly influences patient care and outcomes, professional practice, and organizational efficiencies regardless of employment setting.”

Now that is a lot to absorb, and honestly, I don’t quite understand it. Still, it seems that almost everything we do – such as choosing admission status, teaching terminology to ensure that care can be coded accurately, initiatives like discharge by noon, decisions to not provide select services on weekends, changes to split-shared billing rules, charging employees for parking, accepting transfers when there are no open beds, adhering to the many prior authorization requirements used by payers, and more – can be considered “administrative harm.”

I don’t think this one article will result in any substantial change, but often the first step is simply acknowledgment of the problem. I will post the link if you want to read it.

Moving on, a few weeks ago, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a scathing criticism of Medicare’s oversight of short inpatient admissions, claiming that the Centers for Medicare & Medicaid Services (CMS) is not doing nearly enough to ensure that these claims are compliant – and worthy of payment as a Diagnosis-Related Group (DRG). The OIG said, “although BFCC-QIOs (Beneficiary and Family-Centered Care Quality Improvement Organizations) reviewed thousands of claims for short inpatient stays and denied $49.2 million in improper payments during our audit period, these reviews denied only 0.6 percent of the $7.8 billion in improper payments estimated by CMS’s Comprehensive Error Rate Testing (CERT) reviews.”

Now, I am not a statistician, but the OIG’s estimate of $7.8 billion of improper payments just for short inpatient admissions seems high. On the other hand, I go back to my data showing that there are more than a few hospitals that seem to bill every hospitalized patient as an inpatient, so maybe that estimate is accurate.

Nonetheless, the OIG is suggesting that CMS up their game on audits to ensure that improper payments are found and recouped. The OIG also suggested that CMS establish an occurrence span code for hospitals to use to attest that a short inpatient admission does in fact meet the Two-Midnight Rule provisions, just as we now have span code 72 to apply to claims with fewer than two inpatient midnights.

Also of interest in this report was that the OIG questioned why no provider had been referred to the Recovery Audit Contractors (RACs) for auditing short inpatient admissions, as permitted, to which CMS responded that no provider met the guidelines for referral. Although they did not say it, I got the sense that the OIG took that as proof that CMS was not auditing enough providers.

So, what does this all mean? Well, I hope every reader is already doing the right thing and determining admission status compliantly, and has a process to review all short inpatient admissions prior to claim submission. It’s really the hospitals that do not listen to Monitor Mondays, probably are not reading this article, and have never been audited, and therefore see no reason to follow the rules, that are going to ruin it for the rest of us, with widening administrative harm, more audits, and potentially another occurrence span code to apply to some claims.

I would like to suggest we all play by the rules, meaning the next time CERT audits records, they will find an amazingly low denial rate – and instead of the OIG criticizing CMS’s lax audit efforts, they can compliment providers on following the regulations like never before.