Medical review time extended

March 1, 2014

CMS uses a probe and educate strategy during transition

On August 2, 2013, the Centers for Medicare & Medicaid Services (CMS) released its 2014 Inpatient Prospective Payment System (IPPS) Final Rule, which became effective on October 1, 2013.  

The Final Rule revised CMS’s reimbursement criteria for Part A inpatient hospital claims, creating new guidelines to establish the medical necessity of inpatient hospital admissions (establishing the “two-midnight rule”) and clarifying CMS’s documentation requirements related to physician inpatient admission orders and certifications.

GustafsonFollowing implementation of the final rule, CMS created a program known as the “probe and educate” medical review program, designed to provide education to hospitals implementing the requirements of the final rule. The program was initially planned to cover Medicare Part A inpatient hospital claims with dates of service between October 1, 2013, and March 31, 2014.  

During this time, recovery auditors and Supplemental Medical Review Contractors (SMRCs) would be prohibited from conducting post-payment reviews of Medicare Part A inpatient claims crossing zero to one “midnight” to determine whether inpatient status was appropriate.  

On January 31, 2014, CMS announced an extension of its probe and educate medical review program for an additional six months. Despite misleading industry guidance to the contrary, CMS has not delayed the effective date of the final rule. For inpatient admissions with dates of service between October 1, 2013, and September 30, 2014, recovery auditors and SMRCs are prohibited from conducting medical reviews of hospital stays spanning zero to one midnight for the purposes of determining whether admission to inpatient status was medically necessary.  

PendletonSignificantly, medical review of Medicare Part A inpatient hospital claims will continue during the probe and educate time period, and the new requirements set forth in the final rule apply.

MACs provide education

During the probe and educate medical review program, Medicare Administrative Contractors (MACs)-rather than recovery auditors or SMRCs-will conduct prepayment reviews of a sampling of inpatient hospital claims crossing zero to one midnight for the purpose of determining whether the provisions of the final rule were satisfied: For example, were CMS’s order and certification requirements satisfied? Did the documentation support a medically necessary hospital stay? Was the two-midnight benchmark satisfied? MACs also will hold educational sessions to provide further education regarding the requirements of the final rule.

It is essential that physicians are educated regarding the documentation requirements for which they are responsible under the final rule. CMS guidelines are evolving. On January 30, 2014-one day prior to announcing the extension of the probe and educate program-CMS published additional sub-regulatory guidance related to physician orders and certifications for inpatient hospital admissions.

The guidance differs in certain respects from sub-regulatory guidance published previously. Hospitals must devote resources to closely monitor the CMS Inpatient Hospital Review website as CMS finalizes its guidance related to the final rule. Read the guidance here.

This column is written for informational purposes only and should not be construed as legal advice.