Health Law Daily Wrap Up, HEALTH CARE COMPLIANCE NEWS—QIO medical necessity review takeaway? Document, document, document, (Jul 22, 2016)

By Anthony H. Nguyen, J.D.

The best defense for a facility in the current regulatory and payment environment may be preparing all medical records as if everything will be appealed. According to Joydip Roy, MD, vice president of Compliance and Physician Education at Optum, clinicians’ documentation in the medical record is more than just a communication vehicle for the clinical care team. Facilities should be aware that multiple entities inside, e.g. case managers, coding, and billing, as well as outside the hospital, e.g. auditors, payers, and lawyers, will review the medical record. In an HCCA-sponsored webinar titled "Adapting your Medical Necessity Compliance Program in an Evolving Regulatory Environment," Roy provided compliance updates, reviewed various key factors in quality improvement organization (QIO) reviews, and discussed denials management for health care facilities.

OPPS rule. The calendar year (CY) 2016 Medicare outpatient prospective payment system (OPPS) Final rule maintained the two-midnight rule, but amended it to allow a treating physician or other practitioner to use his or her best judgment to make exceptions to the two-midnight requirement, subject to medical review by a quality improvement organization rather than a recovery audit contractor (see OPPS payment update a net cut for many, November 13, 2015). According to Roy, two key provisions for facilities to be aware of in the OPPS Final rule are: (1) short inpatient hospital stays are again payable on a case-by-case basis; and (2) a shift in medical review strategy to have Quality Improvement Organizations (QIOs), and not the Medicare Administrative Contractors (MACs), conduct these reviews of short inpatient stays.

QIO reviews. Although currently under temporary suspension, QIOs instead of MACs are now responsible for reviews of short inpatient stays. Technically QIO contractors were to review inpatient hospital short-stays after October 1, 2015, but patient status reviews were undertaken for claims with dates of admission within a six month timeframe.

Under the QIO short-stay inpatient review process, hospitals that are found to exhibit the following pattern of practices will be referred to the recovery auditor: (1) having high denial rates; (2) consistently failing to adhere to the 2-midnight rule; (3) having frequent inpatient hospital admissions for stays that do not span one midnight; or (4) failing to improve their performance after QIO educational intervention.

Cases involving custodial care, whether under convenience or delay, are the highest risk for audit and denial. Roy said that facilities need to especially review custodial care, as there are no national standards defining what is custodial delay or convenience—facilities should ask the following: (1) how does your facility define custodial care, care for convenience, and delays in care; and (2) how are you reviewing for these?

Documentation and denials management. Roy noted that hospitals are frequently penalized for efficient care or rapid improvement of patients and that documentation is the difference in successfully navigating denials. Facilities should stress why the care was medically necessary as inpatient. Moreover, explain the "why" by summarizing pertinent positives in assessment and planning, as well as the thought process behind the inpatient status. What is obvious to a facility may not be so to the payer.

If information is not documented then it was not relevant to the decision, and in turn, adds little weight to the appeal. Again, Roy noted that documentation is the cornerstone to everything—from medical necessity perspective to DRG coding. Years from now when these cases are scrutinized in an audit, a well-documented chart might be able to avoid a denial. Roy stressed that physician involvement, documentation, and communication is critical to the overall process.

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