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The practice of hospital medicine is rapidly changing. Higher-acuity patients are being admitted to hospitals already struggling with capacity, and hospitalists are being instructed to pay attention to length of stay, improve their documentation and billing, and participate in initiatives to improve hospital throughput, all while delivering high-quality patient care.
As hospitalists and SHM members who are also physician advisors, we have a unique understanding of these pressures. In this article, we answer common questions we receive from hospitalists regarding utilization management, care coordination, clinical documentation, and CMS regulations.
Why do physician advisors exist, and what do they do?
A physician advisor is hired by the hospital to act as a liaison between the hospital administration, clinical staff, and support personnel in order to ensure regulatory compliance, advise physicians on medical necessity, and assist hospital leadership in meeting overall organizational goals related to the efficient utilization of health care services.1
Given their deep knowledge of hospital systems and processes, and ability to collaborate and teach, hospitalists are well-positioned to serve in this capacity. Our primary goal as physician advisors is to help physicians continue to focus on the parts of medicine they enjoy – clinical care, education, quality improvement, research etc. – by helping to demystify complex regulatory requirements and by creating streamlined processes to make following these requirements easier.
Why does this matter?
We understand that regulatory and hospital systems issues such as patient class determination, appropriate clinical documentation, and hospital throughput and capacity management can feel tedious, and sometimes overwhelming, to busy hospitalists. While it is easy to attribute these problems solely to hospitals’ desire for increased revenue, these issues directly impact the quality of care we provide to their patients.
In addition, our entire financial system is predicated on appropriate health care resource utilization, financial reimbursement, demonstration of medical acuity, and our impact on the care of a patient. Thus, our ability to advocate for our patients and for ourselves is directly connected with this endeavor. Developing a working knowledge of regulatory and systems issues allows hospitalists to be more engaged in leadership and negotiations and allows us to advocate for resources we deem most important.
Why are clinical documentation integrity teams so important?
Accurately and specifically describing how sick your patients are helps ensure that hospitals are reimbursed appropriately, coded data is accurate for research purposes, quality metrics are attributed correctly, and patients receive the correct diagnoses.
Clarification of documentation and/or addressing “clinical validity” of a given diagnosis (e.g., acute hypoxic respiratory failure requires both hypoxia and respiratory distress) may support an increase or result in a decrease in hospital reimbursement. For example, if the reason for a patient’s admission is renal failure, renal failure with true acute hypoxic respiratory failure will be reimbursed at a rate 40% higher than renal failure without the documentation of other conditions that reflect how ill the patient really is. The patient with acute hypoxic respiratory failure (or other major comorbid condition) is genuinely sicker, thus requiring more time (length of stay) and resources (deserved higher reimbursement).
What is the two-midnight rule, and why does it matter?
In October of 2013, the Centers for Medicare & Medicaid Services initiated the two-midnight rule, which states a Medicare patient can be an “inpatient” class if the admitting provider determines that 1) the patient requires medically necessary care which cannot be provided outside the hospital and 2) the patient is expected to stay at least 2 midnights in the hospital.
If, at the time of admission, an admitting provider thinks it is likely that the patient may be discharged prior to 2 midnights, then outpatient care with “observation” designation is appropriate. Incorrect patient class assignment may result in significant adverse consequences for hospitals, including improper patient billing, decreased hospital reimbursement, substantial risk for external auditing, violation of Medicare conditions of participation, and even loss of accreditation.
Who can I talk to if I have a question about a patient’s class? What should I do if I disagree with the class assigned to my patient?
The Utilization Management team typically consists of nurses and physician advisors specifically trained in UM. This team functions as a liaison between providers and payers (particularly Medicare and Medicaid) regarding medical necessity, appropriateness of care received, and efficiency of health care services.
When it comes to discussions about patient class, start by learning more about why the determination was made. The most common reason for patient class disagreements is simply that the documentation does not reflect the severity of illness or accurately reflect the care the patient is receiving. Your documentation should communicate that your patient needs services that only the hospital can provide, and/or they need monitoring that must be done in the hospital to meet the medical necessity criteria that CMS requires for a patient to be “inpatient” class.
If you disagree with a determination provided by the UM nurse and/or physician advisor, then the case will be presented to the hospital UM committee for further review. Two physicians from the UM committee must review the case and provide their own determinations of patient status, and whichever admission determination has two votes is the one that is appropriate.
How do I talk to patients about class determinations?
As media coverage continues about the two-midnight rule and the impact this has on patients, providers should expect more questions about class determination from their patients.
An AARP Bulletin article from 2012 advised patients to “ask [their] own doctor whether observation status is justified … and if not ask him or her to call the hospital to explain the medical reasons why they should be admitted as inpatient.”2 Patients should be informed that providers understand the implications of patient class determinations and are making these decisions as outlined by CMS.
We recommend informing patients that the decision about whether a patient is “inpatient” or “outpatient with observation” class is complex and involves taking into consideration a patient’s medical history, the severity of their current medical condition, need for diagnostic testing, and degree of health resource utilization, as well as a provider’s medical opinion of the risk of an adverse event occurring.
Is it true that observation patients receive higher hospital bills?
It is a common misperception that a designation of “observation” class means that a patient’s medical bill will be higher than “inpatient” class. In 2016, CMS changed the way observation class patients are billed so that, in most scenarios, patients do not receive a higher hospital bill when placed in “observation” class.
How do I approach a denial from a payer?
Commercial payers review all hospitalizations for medical necessity and appropriateness of care received during a patient’s hospitalization. If you receive notice that all or part of your patient’s hospital stay was denied coverage, you have the option of discussing the case with the medical director of the insurance company – this is called a peer-to-peer discussion.
We recommend reviewing the patient’s case and your documentation of the care you provided prior to the peer to peer, especially since these denials may come weeks to months after you have cared for the patient. Begin your conversation by learning why the insurance company denied coverage of the stay and then provide an accurate portrayal of the acuity of illness of the patient, and the resources your hospital used in caring for them. Consider consulting with your hospital’s physician advisor for other high-yield tips.
How can care management help with ‘nonmedical’ hospitalizations?
Care managers are your allies for all patients, especially those with complex discharge needs. Often patients admitted for “nonmedical” reasons do not have the ability to discharge to a skilled nursing facility, long-term care facility, or home due to lack of insurance coverage or resources and/or assistance. Care managers can help you creatively problem solve and coordinate care. Physician advisors are your allies in helping create system-level interventions that might avert some of these “nonmedical” admissions. Consider involving both care managers and physician advisors early in the admission to help navigate social complexities.
How can hospitalists get involved?
According to CMS, the decision on “whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital … can typically be made in less than 48 hours, usually in less than 24 hours.”3 In reality, this is not black and white. The “2 midnights” has brought a host of new challenges for hospitals, hospitalists, and patients to navigate. The Society of Hospital Medicine released an Observation White Paper in 2017 challenging the status quo and proposing comprehensive observation reform.4
We encourage hospital medicine providers to more routinely engage with their institutional physician advisors and consider joining the SHM Public Policy Committee to become more involved in advocacy, and/or consider becoming a physician advisor.
Dr. Singh is physician advisor for Utilization & CM in the division of hospital medicine at the University of Colorado at Denver, Aurora. Dr. Patel is a hospitalist and assistant professor of medicine at the university. Dr. Anoff is director of clinical operations and director of nights for the Hospital Medicine Group at the University of Colorado at Denver. Dr. Stella is a hospitalist at Denver Health and Hospital Authority and an associate professor of medicine at the university.
References
1. What is a physician advisor? 2017 Oct 9.
2. Barry P. Medicare: Inpatient or outpatient. AARP Bulletin. 2012 Oct.
3. Goldberg TH. The long-term and post-acute care continuum. WV Med J. 2014 Nov-Dec;10(6):24-30.
4. Society of Hospital Medicine Public Policy Committee. The hospital observation care problem. Perspectives and solutions from the Society of Hospital Medicine. 2017 Sep.
The practice of hospital medicine is rapidly changing. Higher-acuity patients are being admitted to hospitals already struggling with capacity, and hospitalists are being instructed to pay attention to length of stay, improve their documentation and billing, and participate in initiatives to improve hospital throughput, all while delivering high-quality patient care.
As hospitalists and SHM members who are also physician advisors, we have a unique understanding of these pressures. In this article, we answer common questions we receive from hospitalists regarding utilization management, care coordination, clinical documentation, and CMS regulations.
Why do physician advisors exist, and what do they do?
A physician advisor is hired by the hospital to act as a liaison between the hospital administration, clinical staff, and support personnel in order to ensure regulatory compliance, advise physicians on medical necessity, and assist hospital leadership in meeting overall organizational goals related to the efficient utilization of health care services.1
Given their deep knowledge of hospital systems and processes, and ability to collaborate and teach, hospitalists are well-positioned to serve in this capacity. Our primary goal as physician advisors is to help physicians continue to focus on the parts of medicine they enjoy – clinical care, education, quality improvement, research etc. – by helping to demystify complex regulatory requirements and by creating streamlined processes to make following these requirements easier.
Why does this matter?
We understand that regulatory and hospital systems issues such as patient class determination, appropriate clinical documentation, and hospital throughput and capacity management can feel tedious, and sometimes overwhelming, to busy hospitalists. While it is easy to attribute these problems solely to hospitals’ desire for increased revenue, these issues directly impact the quality of care we provide to their patients.
In addition, our entire financial system is predicated on appropriate health care resource utilization, financial reimbursement, demonstration of medical acuity, and our impact on the care of a patient. Thus, our ability to advocate for our patients and for ourselves is directly connected with this endeavor. Developing a working knowledge of regulatory and systems issues allows hospitalists to be more engaged in leadership and negotiations and allows us to advocate for resources we deem most important.
Why are clinical documentation integrity teams so important?
Accurately and specifically describing how sick your patients are helps ensure that hospitals are reimbursed appropriately, coded data is accurate for research purposes, quality metrics are attributed correctly, and patients receive the correct diagnoses.
Clarification of documentation and/or addressing “clinical validity” of a given diagnosis (e.g., acute hypoxic respiratory failure requires both hypoxia and respiratory distress) may support an increase or result in a decrease in hospital reimbursement. For example, if the reason for a patient’s admission is renal failure, renal failure with true acute hypoxic respiratory failure will be reimbursed at a rate 40% higher than renal failure without the documentation of other conditions that reflect how ill the patient really is. The patient with acute hypoxic respiratory failure (or other major comorbid condition) is genuinely sicker, thus requiring more time (length of stay) and resources (deserved higher reimbursement).
What is the two-midnight rule, and why does it matter?
In October of 2013, the Centers for Medicare & Medicaid Services initiated the two-midnight rule, which states a Medicare patient can be an “inpatient” class if the admitting provider determines that 1) the patient requires medically necessary care which cannot be provided outside the hospital and 2) the patient is expected to stay at least 2 midnights in the hospital.
If, at the time of admission, an admitting provider thinks it is likely that the patient may be discharged prior to 2 midnights, then outpatient care with “observation” designation is appropriate. Incorrect patient class assignment may result in significant adverse consequences for hospitals, including improper patient billing, decreased hospital reimbursement, substantial risk for external auditing, violation of Medicare conditions of participation, and even loss of accreditation.
Who can I talk to if I have a question about a patient’s class? What should I do if I disagree with the class assigned to my patient?
The Utilization Management team typically consists of nurses and physician advisors specifically trained in UM. This team functions as a liaison between providers and payers (particularly Medicare and Medicaid) regarding medical necessity, appropriateness of care received, and efficiency of health care services.
When it comes to discussions about patient class, start by learning more about why the determination was made. The most common reason for patient class disagreements is simply that the documentation does not reflect the severity of illness or accurately reflect the care the patient is receiving. Your documentation should communicate that your patient needs services that only the hospital can provide, and/or they need monitoring that must be done in the hospital to meet the medical necessity criteria that CMS requires for a patient to be “inpatient” class.
If you disagree with a determination provided by the UM nurse and/or physician advisor, then the case will be presented to the hospital UM committee for further review. Two physicians from the UM committee must review the case and provide their own determinations of patient status, and whichever admission determination has two votes is the one that is appropriate.
How do I talk to patients about class determinations?
As media coverage continues about the two-midnight rule and the impact this has on patients, providers should expect more questions about class determination from their patients.
An AARP Bulletin article from 2012 advised patients to “ask [their] own doctor whether observation status is justified … and if not ask him or her to call the hospital to explain the medical reasons why they should be admitted as inpatient.”2 Patients should be informed that providers understand the implications of patient class determinations and are making these decisions as outlined by CMS.
We recommend informing patients that the decision about whether a patient is “inpatient” or “outpatient with observation” class is complex and involves taking into consideration a patient’s medical history, the severity of their current medical condition, need for diagnostic testing, and degree of health resource utilization, as well as a provider’s medical opinion of the risk of an adverse event occurring.
Is it true that observation patients receive higher hospital bills?
It is a common misperception that a designation of “observation” class means that a patient’s medical bill will be higher than “inpatient” class. In 2016, CMS changed the way observation class patients are billed so that, in most scenarios, patients do not receive a higher hospital bill when placed in “observation” class.
How do I approach a denial from a payer?
Commercial payers review all hospitalizations for medical necessity and appropriateness of care received during a patient’s hospitalization. If you receive notice that all or part of your patient’s hospital stay was denied coverage, you have the option of discussing the case with the medical director of the insurance company – this is called a peer-to-peer discussion.
We recommend reviewing the patient’s case and your documentation of the care you provided prior to the peer to peer, especially since these denials may come weeks to months after you have cared for the patient. Begin your conversation by learning why the insurance company denied coverage of the stay and then provide an accurate portrayal of the acuity of illness of the patient, and the resources your hospital used in caring for them. Consider consulting with your hospital’s physician advisor for other high-yield tips.
How can care management help with ‘nonmedical’ hospitalizations?
Care managers are your allies for all patients, especially those with complex discharge needs. Often patients admitted for “nonmedical” reasons do not have the ability to discharge to a skilled nursing facility, long-term care facility, or home due to lack of insurance coverage or resources and/or assistance. Care managers can help you creatively problem solve and coordinate care. Physician advisors are your allies in helping create system-level interventions that might avert some of these “nonmedical” admissions. Consider involving both care managers and physician advisors early in the admission to help navigate social complexities.
How can hospitalists get involved?
According to CMS, the decision on “whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital … can typically be made in less than 48 hours, usually in less than 24 hours.”3 In reality, this is not black and white. The “2 midnights” has brought a host of new challenges for hospitals, hospitalists, and patients to navigate. The Society of Hospital Medicine released an Observation White Paper in 2017 challenging the status quo and proposing comprehensive observation reform.4
We encourage hospital medicine providers to more routinely engage with their institutional physician advisors and consider joining the SHM Public Policy Committee to become more involved in advocacy, and/or consider becoming a physician advisor.
Dr. Singh is physician advisor for Utilization & CM in the division of hospital medicine at the University of Colorado at Denver, Aurora. Dr. Patel is a hospitalist and assistant professor of medicine at the university. Dr. Anoff is director of clinical operations and director of nights for the Hospital Medicine Group at the University of Colorado at Denver. Dr. Stella is a hospitalist at Denver Health and Hospital Authority and an associate professor of medicine at the university.
References
1. What is a physician advisor? 2017 Oct 9.
2. Barry P. Medicare: Inpatient or outpatient. AARP Bulletin. 2012 Oct.
3. Goldberg TH. The long-term and post-acute care continuum. WV Med J. 2014 Nov-Dec;10(6):24-30.
4. Society of Hospital Medicine Public Policy Committee. The hospital observation care problem. Perspectives and solutions from the Society of Hospital Medicine. 2017 Sep.
The practice of hospital medicine is rapidly changing. Higher-acuity patients are being admitted to hospitals already struggling with capacity, and hospitalists are being instructed to pay attention to length of stay, improve their documentation and billing, and participate in initiatives to improve hospital throughput, all while delivering high-quality patient care.
As hospitalists and SHM members who are also physician advisors, we have a unique understanding of these pressures. In this article, we answer common questions we receive from hospitalists regarding utilization management, care coordination, clinical documentation, and CMS regulations.
Why do physician advisors exist, and what do they do?
A physician advisor is hired by the hospital to act as a liaison between the hospital administration, clinical staff, and support personnel in order to ensure regulatory compliance, advise physicians on medical necessity, and assist hospital leadership in meeting overall organizational goals related to the efficient utilization of health care services.1
Given their deep knowledge of hospital systems and processes, and ability to collaborate and teach, hospitalists are well-positioned to serve in this capacity. Our primary goal as physician advisors is to help physicians continue to focus on the parts of medicine they enjoy – clinical care, education, quality improvement, research etc. – by helping to demystify complex regulatory requirements and by creating streamlined processes to make following these requirements easier.
Why does this matter?
We understand that regulatory and hospital systems issues such as patient class determination, appropriate clinical documentation, and hospital throughput and capacity management can feel tedious, and sometimes overwhelming, to busy hospitalists. While it is easy to attribute these problems solely to hospitals’ desire for increased revenue, these issues directly impact the quality of care we provide to their patients.
In addition, our entire financial system is predicated on appropriate health care resource utilization, financial reimbursement, demonstration of medical acuity, and our impact on the care of a patient. Thus, our ability to advocate for our patients and for ourselves is directly connected with this endeavor. Developing a working knowledge of regulatory and systems issues allows hospitalists to be more engaged in leadership and negotiations and allows us to advocate for resources we deem most important.
Why are clinical documentation integrity teams so important?
Accurately and specifically describing how sick your patients are helps ensure that hospitals are reimbursed appropriately, coded data is accurate for research purposes, quality metrics are attributed correctly, and patients receive the correct diagnoses.
Clarification of documentation and/or addressing “clinical validity” of a given diagnosis (e.g., acute hypoxic respiratory failure requires both hypoxia and respiratory distress) may support an increase or result in a decrease in hospital reimbursement. For example, if the reason for a patient’s admission is renal failure, renal failure with true acute hypoxic respiratory failure will be reimbursed at a rate 40% higher than renal failure without the documentation of other conditions that reflect how ill the patient really is. The patient with acute hypoxic respiratory failure (or other major comorbid condition) is genuinely sicker, thus requiring more time (length of stay) and resources (deserved higher reimbursement).
What is the two-midnight rule, and why does it matter?
In October of 2013, the Centers for Medicare & Medicaid Services initiated the two-midnight rule, which states a Medicare patient can be an “inpatient” class if the admitting provider determines that 1) the patient requires medically necessary care which cannot be provided outside the hospital and 2) the patient is expected to stay at least 2 midnights in the hospital.
If, at the time of admission, an admitting provider thinks it is likely that the patient may be discharged prior to 2 midnights, then outpatient care with “observation” designation is appropriate. Incorrect patient class assignment may result in significant adverse consequences for hospitals, including improper patient billing, decreased hospital reimbursement, substantial risk for external auditing, violation of Medicare conditions of participation, and even loss of accreditation.
Who can I talk to if I have a question about a patient’s class? What should I do if I disagree with the class assigned to my patient?
The Utilization Management team typically consists of nurses and physician advisors specifically trained in UM. This team functions as a liaison between providers and payers (particularly Medicare and Medicaid) regarding medical necessity, appropriateness of care received, and efficiency of health care services.
When it comes to discussions about patient class, start by learning more about why the determination was made. The most common reason for patient class disagreements is simply that the documentation does not reflect the severity of illness or accurately reflect the care the patient is receiving. Your documentation should communicate that your patient needs services that only the hospital can provide, and/or they need monitoring that must be done in the hospital to meet the medical necessity criteria that CMS requires for a patient to be “inpatient” class.
If you disagree with a determination provided by the UM nurse and/or physician advisor, then the case will be presented to the hospital UM committee for further review. Two physicians from the UM committee must review the case and provide their own determinations of patient status, and whichever admission determination has two votes is the one that is appropriate.
How do I talk to patients about class determinations?
As media coverage continues about the two-midnight rule and the impact this has on patients, providers should expect more questions about class determination from their patients.
An AARP Bulletin article from 2012 advised patients to “ask [their] own doctor whether observation status is justified … and if not ask him or her to call the hospital to explain the medical reasons why they should be admitted as inpatient.”2 Patients should be informed that providers understand the implications of patient class determinations and are making these decisions as outlined by CMS.
We recommend informing patients that the decision about whether a patient is “inpatient” or “outpatient with observation” class is complex and involves taking into consideration a patient’s medical history, the severity of their current medical condition, need for diagnostic testing, and degree of health resource utilization, as well as a provider’s medical opinion of the risk of an adverse event occurring.
Is it true that observation patients receive higher hospital bills?
It is a common misperception that a designation of “observation” class means that a patient’s medical bill will be higher than “inpatient” class. In 2016, CMS changed the way observation class patients are billed so that, in most scenarios, patients do not receive a higher hospital bill when placed in “observation” class.
How do I approach a denial from a payer?
Commercial payers review all hospitalizations for medical necessity and appropriateness of care received during a patient’s hospitalization. If you receive notice that all or part of your patient’s hospital stay was denied coverage, you have the option of discussing the case with the medical director of the insurance company – this is called a peer-to-peer discussion.
We recommend reviewing the patient’s case and your documentation of the care you provided prior to the peer to peer, especially since these denials may come weeks to months after you have cared for the patient. Begin your conversation by learning why the insurance company denied coverage of the stay and then provide an accurate portrayal of the acuity of illness of the patient, and the resources your hospital used in caring for them. Consider consulting with your hospital’s physician advisor for other high-yield tips.
How can care management help with ‘nonmedical’ hospitalizations?
Care managers are your allies for all patients, especially those with complex discharge needs. Often patients admitted for “nonmedical” reasons do not have the ability to discharge to a skilled nursing facility, long-term care facility, or home due to lack of insurance coverage or resources and/or assistance. Care managers can help you creatively problem solve and coordinate care. Physician advisors are your allies in helping create system-level interventions that might avert some of these “nonmedical” admissions. Consider involving both care managers and physician advisors early in the admission to help navigate social complexities.
How can hospitalists get involved?
According to CMS, the decision on “whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital … can typically be made in less than 48 hours, usually in less than 24 hours.”3 In reality, this is not black and white. The “2 midnights” has brought a host of new challenges for hospitals, hospitalists, and patients to navigate. The Society of Hospital Medicine released an Observation White Paper in 2017 challenging the status quo and proposing comprehensive observation reform.4
We encourage hospital medicine providers to more routinely engage with their institutional physician advisors and consider joining the SHM Public Policy Committee to become more involved in advocacy, and/or consider becoming a physician advisor.
Dr. Singh is physician advisor for Utilization & CM in the division of hospital medicine at the University of Colorado at Denver, Aurora. Dr. Patel is a hospitalist and assistant professor of medicine at the university. Dr. Anoff is director of clinical operations and director of nights for the Hospital Medicine Group at the University of Colorado at Denver. Dr. Stella is a hospitalist at Denver Health and Hospital Authority and an associate professor of medicine at the university.
References
1. What is a physician advisor? 2017 Oct 9.
2. Barry P. Medicare: Inpatient or outpatient. AARP Bulletin. 2012 Oct.
3. Goldberg TH. The long-term and post-acute care continuum. WV Med J. 2014 Nov-Dec;10(6):24-30.
4. Society of Hospital Medicine Public Policy Committee. The hospital observation care problem. Perspectives and solutions from the Society of Hospital Medicine. 2017 Sep.