The 48-Hour Benchmark: Is This New Or Not?

24, 48… What’s This Really All About?

For weeks now, we’ve all been talking about the “changes” and “new” challenges being presented to us by the newest ruling from The Secretary, CMS-1599, the 2014 IPPS Final Rule. The topics of most interest have concerned the “new benchmark” — the moving of the threshold, used for decades by physicians to judge if an inpatient admission could be considered a “reasonable and necessary” step. Before October 1, 2013, the benchmark was “24 hours” — sort of. Ok, actually it was more like “overnight.” But no matter. The idea was, is the patient sick enough to need to stay overnight in the hospital?


From the movie “Catch-22”

Anyway. You know all that or you probably wouldn’t be reading this blog. But the fuss is all about the fact that the Secretary has added language to the regulations that make

(a) physician orders a clear and specific requirement for payment of Medicare claims,

(b) a 24-hour period to qualify as appropriate for inpatient billing must include at least 2 Midnights (which actually makes it 25-hours, but who’s counting), and

(c) a very specific set of statements, called a “certification,” which must all be present somewhere in the medical record and signed by a specific subset of practitioners.

So the question is, is any of this new? The answer is this: Some is new, some is not, the language is certainly new. The need for a physician order is not really new, but the language in the reg is new. the need for “24-hours” is not new, but one can argue that, and the second midnight being included is certainly new. What about the certification? Well, that’s kind of new and kind of not.  Yes, it’s kind of always been there, but then all this new language is new, and certainly the requirement for payment is both surprising and maddening, especially considering the “specific subset” of practitioners who will be acceptable signatories is new.

Next question: Why did CMS add this new language?


Why Is CMS Doing This Now?

If these aren’t “new” requirements, then why all the fuss? Why would the bureaucrats insist on adding all this new language in the Federal Register?

final rule

The Final Rule in the Federal Register

CMS insists that they are offering “clarification”  — what the provider community asked for. And if you think about it… therein lies at least part of the answer. They are simply adding some “technical” clarity. Or at least some technical detail, be it clear or otherwise.

While you’ve always known that you needed to sign and date admission orders, I suspect that the various review contractors have complained that the language was not specific enough to pass muster in front of a judge, and this lack of clarity could be used to let you off the hook, so to speak. Now, I’ve not specifically heard any anecdotal evidence to support this, but why else ask for the language? It’s just crossing your “T”s and dotting your “I”s, right? And besides, now the reviewers have even more specifics in the regulation to enable even more “Technical Denials” to be filed, more recoupments to be had, more fees to be paid to the contractors. A “win” on a technicality still counts in the “win” column, as we all know.

Nevertheless, the Secretary is under direct pressure to reduce expenditures. One should never forget that. Nevermind that there are easier, simpler, more direct and more effective ways to do that.

Even a cursory reading of the 2014 IPPS Final Rule as published in the Federal Register reveals their underlying purpose, regardless of statements to the contrary: CMS needs to reduce inpatient reimbursements, and chooses to do so by reducing the number of inpatient stays, specifically those with LOS under 3 days, under the guise of “reducing Observation stays” — something that beneficiaries rightly blame CMS for, including their increased copayments.

Lawsuits have been filed by beneficiaries (one such suite was recently dismissed) to eliminate Observation, because of its increased use by hospitals (who are fearful of denials for inpatient claims), and its increased costs to the beneficiaries. It makes no sense to the beneficiaries that they would be “Observation” instead of “Inpatient,” since they all know there’s no difference in the care being provided. I’m sure this reasoning is not lost on the Secretary and her minions. Regardless, the Secretary and CMS simply cannot acknowledge the logic, as that would mean their entire payment system defies logic. Well. We can’t have THAT now can we?


Rep. Schwarz Letter to CMS

Evidently, with the Judicial branch offering no resistance, and the pressure to appease the provider community notwithstanding, there was pressure from other sources that seem to carry more weight, including a letter by Rep. Allyson Schwartz (D-PA) and more than 100 members of the U.S. House of Representatives to CMS urging a 6-month delay of the policies in the new rule. Whether it was this letter, or something else, or a combination of factors, something prompted the Secretary to come up with some kind of olive branch to offer, at least as a gesture of some sort. Clearly, the Secretary intends to move forward with her programs, and there would be no delay in implementation, certainly no cancellation and rework of any of the slated changes.



The Sept 26 Memo

The Non-Delay Delay

Instead, in a somewhat rare move, the Secretary granted a delay in audits… sort of.  In typical Washington-speak, CMS posted a series of FAQs and a statement, on Thursday, September 25.

This memo is perhaps the promised “sub-regulatory guidance” that CMS has mentioned on several of their Open Door Forum Conference Calls intended to “educate the provider community” about how to interpret the new rules and implement their requirements into providers’ processes and procedures.  I say “perhaps” because the document is woefully short – a grand one and one-half  pages (and that’s being generous). This, to explain how many pages of regulation?

The word “delay” does not appear in the document. Instead, a bare paragraph is offered, as follows:

“During the implementation period of October 1, 2013 until December 31, 2013, CMS will instruct the MACs and Recovery Auditors not to review claims spanning more than two midnights after admission for appropriateness of patient status. MACs and Recovery Auditors will not review any claims related to Critical Access Hospitals. In addition, during this period, CMS will not permit Recovery Auditors to review inpatient admissions of one midnight or less that occur on or after October 1. CMS reminds hospitals that while medical review will not be focused on claims spanning 2 midnights or more after formal inpatient admission, physicians should make inpatient admission decisions in accordance with the 2 midnight provisions in the final rule. If at any time there is evidence of systematic gaming, abuse or delays in the provision of care in an attempt to surpass the 2-midnight presumption could warrant medical review.”

The paragraph is more informative for what it does NOT say, than for what it does say.

It seems to this author that CMS has been pointedly avoiding the term “Medical Necessity” for quite some time, now. Why is that?


Is Medical Necessity Still Fair Game During the Implementation Period?

The major emphasis of RACs in the past year for their Complex Reviews seemed to be “Medical Necessity” denials. Why? John Dillinger gave the right answer for that, when he was once asked why he robbed banks: “Because that’s where the money is.”  The same is true for the RAC, since those denials garner the largest refund and therefore the largest contingency fee for the RAC. The term, however, is in many cases a canard. More correctly, such denials were Full Denials based upon a lack of documentation to support an appropriate admission, and/or subsequent appropriate delivery of services under inpatient level of care. A shorter description would be “provided in the wrong setting.”

ractrac results

RACTrac Results for Q2 2013

The most recent AHA RACTrac survey for Q2 FY2013 reports that “62% of short-stay denials for medical necessity were because the care was provided in the wrong setting, not because the care was medically unnecessary.” (emphasis is mine)  How this relates to what CMS considers a review “for appropriateness of patient status” is thoroughly unclear. In the 2014 IPPS Final Rule itself, CMS seems to clearly delineate that “appropriate status” for inpatient is to be determined by time (a 2-midnight threshold), and that the “presumption” of that status as appropriate for billing purposes will still NOT trump the underlying “medical necessity” — which CMS tends to avoid, as a phrase now, preferring “hospital care” –which indeed still must be the basis for the patient even being in the hospital to begin with. Confused yet?

The point is this: medical necessity for a hospital stay is still the basis of every admission, whether it be for Observation (Outpatient status) or an Admission (Inpatient status).

Nothing counts like medical necessity.

Well, actually, it’s the documentation of medical necessity that counts. For Billing purposes, that is.


On Second Thought… There’s This…

Inpatient Medicare Review page at

Inpatient Medicare Review page at

Ok, maybe there is one more thing to consider. And this truly is NEW: the “reasonable and necessary” expectation of a need for a stay crossing two midnights.

Here’s the way it is explained on the CMS site, under Medical Review and Education, Inpatient Hospital Reviews:

“Documentation in the medical record must support a reasonable expectation of the need for the beneficiary to require a medically necessary stay lasting at least two midnights.”

Now, that is the way it is explained on that one page. In the Federal Register, however, the phrase “reasonable and necessary” appears an astounding 109 times.

In the previous year’s IPPS Final Rule, that phrase appears exactly 2 times.

Unfortunately, what remains for providers is to try to discern what “reasonable and necessary” really means.

As a friend of mine said recently

— “I’ve been practicing medicine for over 30 years and I’ve no idea what reasonable and necessary means…

Would that CMS would or even could explain it.

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