News to Note – July 2023

• We are a couple of months into the loss of the Part A Skilled Nursing Facility (SNF) waiver and back to patients requiring three midnights of hospital care in Inpatient status before SNF fees are covered by Medicare. Along with speaking to your utilization/case management staff about this, have you sat down with your physical therapists to review the requirements for access to or payment of a SNF or inpatient rehabilitation facility (IRF)? Many of us have been faced by a patient who had a physical therapy evaluation and was told by the therapist that they required a SNF or IRF for further care. However, the patient is covered by Medicare and is not Inpatient or doesn’t have the necessary three midnights in Inpatient status or is covered by a Medicare Advantage plan which must authorize such a transfer. This is a difficult conversation to have when the patient has been unwittingly prepped to expect further specialized services without any out-of-pocket cost. A better process would involve the physical therapist speaking with the case manager BEFORE speaking with the patient so a fully transparent discussion can take place utilizing all of the necessary information.
• With the three-midnight inpatient requirement back in effect, make sure your staff knows the error in the concept of “meeting inpatient criteria for three midnights.” First, the Centers for Medicare and Medicaid Services (CMS) do not have any inpatient criteria – they have the Two-Midnight Rule and medical necessity. More importantly, the Medicare manual states that the inpatient admission must meet the requirements of the Two-Midnight Rule but that unless subsequent days represent a substantial departure from standard medical practice, the patient can access their Part A SNF benefit. What does that mean? If the provider note says, “keep one more day for SNF coverage,” that’s a substantial departure. But, “keep one more day for hospital monitoring,” while potentially not representing unambiguous need for ongoing hospital care, would allow that day to be counted, in theory. Additionally, if a patient passes a third midnight in Inpatient status because honest attempts at finding an accepting facility are fruitless, those midnights all “count” even if technically, the patient was medically ready to discharge after the second midnight. Keep that in mind as you navigate the 58-year-old three-day SNF rule.
• Speaking of SNFs, Medicare pays these stays under Part A. Part of that payment involves something called “consolidated billing.” Under this payment structure, payment from Medicare to the SNF covers most services provided to the patient including those the SNF provides under arrangement. For example, if a doctor orders an x-ray or EKG on a patient in a SNF, the SNF has to arrange for that service to be provided and pay for the technical component. Additionally, the cost of medications provided to the patient are the facility’s responsibility. But, Medicare has a list of services that are excluded for consolidated billing because of their high cost. This includes CT scans, Emergency Department (ED) visits, surgery, radiation therapy, and some select chemotherapy agents. Many of you have managed patients who warranted SNF care but since the cost of one or more of their medications was so high and they were not on the exclusion list, the SNFs wouldn’t accept the patient. Now is your chance to tell Medicare about that! In their 2024 proposed rule for SNFs, they are asking for suggestions of chemotherapy agents which should be added into the exclusion list. While it may be difficult to remember the drugs that led to SNFs refusing patients, we CAN suggest to CMS that they set a price target and any medication over that price be excluded. To submit your comment, go to Regulations.gov, search for CMS-1779-P, then click “comment.”
• The Office of the Inspector General (OIG) recently fined an IRF in Louisiana $1.2 million for inappropriate admissions to their facility. Not only was the facility fined, but the rehabilitation medicine physician who reviewed and approved the admissions and provided ongoing care was also fined $575,000. It’s not often that a physician is charged with making improper admission decisions, but the report does include that the provider reportedly put pressure on the patients to be admitted, so a penalty seems justified. It should also be noted that this was a whistleblower case with two staff members at the IRF earning a 20% reward. How would the OIG view a physician who admits inpatients to the hospital knowing that the CMS Two-Midnight Rule was not met but defaulted to Inpatient status with every patient they hospitalized? Or, if they counted days due to delays in care as medically necessary days? Will a utilization review nurse be the next whistleblower getting a nice payout?
• ED visit downgrades by payers when their proprietary tools devise a different visit level than the facility or doctor billed are becoming more and more common. One such tool is the UnitedHealthcare (UHC) Emergency Department Claim (EDC) analyzer which UHC sells access to for both payers and hospitals to use. Some have raised a concern that the tool being sold to payers is different than that being sold to hospitals. While this has not yet been proven, if your hospital uses this tool to designate your ED facility fees, watch your claims closely. If payers are using the same tool but still downgrading the visits, something very nefarious may be going on.
• Many of you have heard the expression, “saying the quiet part out loud.” At a recent conference, a major payor put the quiet part in not only into words, but also on their presentation slides. In discussing their employer’s initiative to reduce short stay inpatient admissions, this individual noted that their goal was, “reduce cost by shifting appropriate inpatient stays to observation.” They went on to note that the outcome was generation of $7.4 million in savings with no adverse impact on ER visits or rehospitalizations. That’s $7.4 million less that the payer paid to hospitals for hospitalizations which were “appropriate inpatient stays.” Our own ACPA Update editor and member of the Advisory Board, Dr. Ronald Hirsch, asked if they believed it costs less for a hospital to provide observation care than inpatient care. Or, if they were under the impression nurses are paid less caring for an observation patient, or if antibiotics, IV fluids, and other services cost hospitals less for a patient designated as Observation rather than Inpatient. Their response was that it costs less for the patient in the form of co-payments to be in observation than inpatient, so that’s why they did it. Make what you will of this train of thought.
• When it comes to the shift of services from hospitals to ambulatory surgery centers (ASCs), from the payor side, this is clearly a winning strategy. Payors, including Medicare, pay less to ASCs than hospitals for performance of the same procedures. Before long, all of the healthy, well-insured patients needing surgery or cardiac interventions will be moving to ASCs and away from hospitals. At least one insurer, Aetna, is working hard to accelerate this shift. They no longer allow surgeons to join their network unless they are also on staff at an ASC. This way, unless there is no ASC in the area or the patient’s condition precludes the use of an ASC, the payer can “reduce cost without reducing access or quality.”
• Last month, the New York Times published an article titled, “The Moral Crisis of America’s Doctors” with a sub-heading, “The corporatization of health care has changed the practice of medicine, causing many physicians to feel alienated from their work.” The article discussed the moral distress of “Dr. A.,” an ED doctor. One section reads, “Appeasing her peers and superiors without breaching her values became increasingly difficult for Dr. A. On one occasion, a frail, elderly woman came into the E.R. because she was unable to walk on her own. A nurse case manager determined that the woman should be discharged because she didn’t have a specific diagnosis to explain her condition and Medicare wouldn’t cover her stay, even though she lived alone and couldn’t get out of a chair to eat or go to the bathroom. Dr. A. cried with the woman and tried to comfort her. Then she pleaded with the hospitalist on duty to admit her.” Putting aside the fact that this was simply Dr. A.’s recollection of the conversation, it should be noted that no case manager should ever tell a doctor that a patient should be discharged. This patient likely did not require hospital care but that does not mean she should be put into an Uber and sent home. Patients shouldn’t be discharged without a safe discharge plan and of course, what the case manager was likely trying to convey to the ED physician was that the patient did not warrant inpatient hospitalization nor even hospitalization to receive observation services. Not that the patient must be sent home from the ED without a safe plan. When you have such a patient with no need for hospital care and no safe discharge plan, where does that patient go to wait for the plan to materialize? Do they stay in the ED? Do they go to the Observation unit? Do they go to an inpatient bed? Who oversees the patient’s care? The ED provider? The hospitalist? Someone else? Will that doctor get paid for their visits? How often can they legally bill for a visit if there is no medical necessity to begin with? There are no right or wrong answers. Every hospital must look at their resources and staffing, decide what to do, and ensure everyone is aware that caring for such patients is part of our mission as healthcare providers. The biggest moral distress this ED physician from the article should suffer is when they realize how few resources our country dedicates to those in need – be it this elderly patient without social support or the child whose family cannot afford or access healthy food.
• Readmissions are a common topic of concern for hospitals and rightly so, but the issue is much more complex than it seems. First, of course we all want to reduce readmissions. In fact, don’t we want to reduce every kind of admission? Wouldn’t it be great if no one ever needed hospital care? But for now, that’s not a realistic goal. On the other hand, addressing readmissions is.
• With the Medicare 30-Day Readmission Reduction Program, CMS calculates a hospital’s 30-day readmission rate each year, compares it to the facility’s expected readmission rate, and determines if the hospital will be penalized for the next three years. But, why 30 days? Is it because that’s the time frame for most preventable readmissions? No, the data says that time frame is about eight days. Beyond that point, the majority of readmissions are due to factors completely outside of a hospital’s control such as the cost of medication for a patient on a limited income and the many social determinants of health. The reason CMS uses a 30-day mark is because it’s a convenient number. There are more months in the year with 31 days than 30, but 31 would sound weird. Not exactly scientific, is it?
• Now, let’s look at payment. For traditional Medicare every readmission, with the exception of same-day readmissions, pays the hospital for a full DRG. Purely from a financial standpoint, Medicare readmissions back to your hospital bring in additional hospital revenue. But, how can you quantify this? Open your Program for Evaluating Payment Patterns Electronic Report (PEPPER). The PEPPER reports readmissions by showing not only how many of your index admissions were subsequently readmitted to any hospital within 30 days, but also how many of those readmissions came back to your hospital. If you had 200 total readmissions and 150 returned to your hospital, you were paid an additional 150 DRGs – an amount which would far exceed any readmission penalty. For one hospital, their readmission penalty was $600,000 but revenue from the readmissions was over $5 million. The suggestion is not to stop avoiding readmissions, but it’s important to understand all of the data and the impact it has on your organization.
• The other use of this data is to quantify your patient “outmigration”. If the first admission was at your hospital and the patient was readmitted elsewhere, you should ask why they didn’t come back to you when they got sick again. Is your food terrible? Do your doctors not communicate well? Is your wi-fi slow? Maybe you’re in a tourist town and most patients leave the community for home a few states away at discharge? As with all PEPPER data there is no right number to aim for, but the average readmit rate to the same hospital is about 73%.