Inpatient Status Orders Requirements Changed

on Tuesday, 07 August 2018. All News Items | Case Management | Documentation | Coding

2019 IPPS Final Rule Released

The 2019 Hospital Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospitals and the Long-Term Care Hospital Final Rule was released this past Thursday August 2nd. The display copy comes in at a mere 2,593 pages. So, if you are someone who likes to eat dessert before your meal or start a book by reading the ending, this article is for you. CMS finalized their “proposal to revise the inpatient admission order policy to no longer require a written inpatient admission order to be present in the medical record as a specific condition of Medicare Part A payment.”  

Similar to there being so much more to a meal than dessert or a good story than the last page of a book, there is more you need to know and think about in relation to this finalized proposal. This article provides a look back at when this initially became a requirement, details an “almost apology” to hospitals from CMS, provides CMS’s expected outcomes from this rule change, a sampler, if you will, of some of the more notable comments to and responses from CMS and ends with an important list of items to keep in mind that did not change.

Background

In the 2014 IPPS Final Rule, CMS adopted the “2-Midnight” payment policy, codified “the longstanding policy that a beneficiary becomes a hospital inpatient if formally admitted pursuant to the order of a physician (or other qualified practitioner as provided in the regulations) in accordance with the hospital conditions of participation (CoPs), and made it a specific condition of Medicare Part A payment that a written inpatient admission order be present in the medical record.  

Commenters of the 2014 IPPS Proposed rule felt this requirement was “duplicative and burdensome on hospitals.” CMS’s response was that “The physician order reflects affirmation by the ordering physician or other qualified practitioner that hospital inpatient services are medically necessary, and the “order serves the unique purpose of initiating the inpatient admission and documenting the physicians (or other qualified practitioner as provided in the regulations) intent to admit the patient which impacts its required timing.”

They did “acknowledge that in the extremely rare circumstance the order to admit is missing or defective, yet the intent, decision, and recommendation of the ordering physician or other qualified practitioner to admit the beneficiary as an inpatient can clearly be derived from the medical record, medical review contractors are provided with discretion to determine that this information constructively satisfies the requirement that a written hospital inpatient admission order be present in the medical record.”

Proposed Revision to the Policy, Why Now?

While the Final Rule does not include an apology to hospitals for making the status order a requirement of payment since October 1, 2013, CMS does note that, “it has come to our attention that some medically necessary inpatient admissions are being denied payment due to technical discrepancies with the documentation of inpatient admission orders.”

Common technical discrepancies cited by CMS include:

  • Missing practitioner admission signatures,
  • Missing co-signatures or authentication signatures, and
  • Signature occurring after discharge.

They further share they “have become aware that, particularly during the case review process, these discrepancies have occasionally been the primary reason for denying Medicare payment of an individual claim…we have concluded that if the hospital is operating in accordance with the hospital CoPs, medical reviews should primarily focus on whether the inpatient admission was medically reasonable and necessary rather than occasional inadvertent signature documentation issues unrelated to the medical necessity of the inpatient stay. It was not our intent when we finalized the admission order documentation requirements that they should by themselves lead to the denial of payment for medically reasonable and necessary inpatient stays, even if such denials occur infrequently.”

Anticipated Outcome of Policy Revision

Two key outcomes CMS hopes to achieve through this Policy Revision are:

  • First, to reduce this unnecessary administrative burden on physicians and providers, and
  • Second, to “properly adjust the focus of the medical review process towards determining whether an inpatient stay was medically reasonable and necessary and intended by the admitting physician rather than towards occasional inadvertent signature or documentation issues unrelated to the medical necessity of the inpatient stay or the intent of the physician.”

Comments & CMS Responses

As mentioned earlier in this article, here are some key comments received and CMS responses related to the admission order policy change.

Comment: Concern the proposal may render the inpatient admission order completely insignificant and not required for any purpose.

CMS Response: “Our proposal does not change the requirement that, for purposes of Part A payment, an individual becomes an inpatient when formally admitted as an inpatient under an order for inpatient admission. The physician order remains a significant requirement because it reflects a determination by the ordering physician or other qualified practitioner that hospital inpatient services are medically necessary, and initiates the process for inpatient admission.”

Comment: Commenters referenced the January 2014 sub-regulatory guidance which explained that if a practitioner disagreed with the decision to admit a patient to inpatient status, the practitioner could simply refrain from authenticating the inpatient admission order and the patient would remain in outpatient status. There was a concern that if CMS no longer requires a written inpatient admission order to be present in the medical record as a specific condition of Medicare Part A payment, CMS would not be able to distinguish between orders that were simply defective and orders that were intentionally not signed.

CMS Response: “It should never have been the case that the only evidence in the medical record regarding this uncommon situation was the absence of the physician’s or other qualified practitioner’s signature. The medical record as a whole should reflect whether there was a decision by a physician or other qualified practitioner to admit the beneficiary as an inpatient or not.”

This fact is precisely why, under our current guidance, we acknowledged that in the extremely rare circumstance where the order to admit is missing or defective, yet the intent, decision, and recommendation of the ordering physician or other qualified practitioner to admit the beneficiary as an inpatient can clearly be derived from the medical record, medical review contractors have discretion to determine that this information constructively satisfies the requirement that a written hospital inpatient admission order be present in the medical record. We disagree with these commenters that reliance only on the absence of the signature in these uncommon situations reflected good medical documentation practice.”

Comment: Concerned the proposal would remove the requirement for an order altogether, affecting patient appeal rights, or increase financial liability.

CMS Response: “As stated earlier, the physician order remains a requirement for purposes of reflecting a determination by the ordering physician or other qualified practitioner that hospital inpatient services are medically necessary, initiating the inpatient admission. Additionally, regardless of this proposal and other physician order requirements described earlier, the hospital CoPs include the requirement that all Medicare inpatients must receive written information about their hospital discharge appeal rights.”

Commenters provided the example of a patient being in outpatient status receiving observation services but spent two medically necessary midnights and was discharged. The question being, can the stay be reviewed after discharge, a determination be made that the 2-midnight benchmark was met, and the hospital submit a claim for inpatient admission?

CMS responded by referring readers to the FY 2014 IPPS/LTCH PPS final Rule (78 FR 50942) where they stated that “The physician order cannot be effective retroactively. Inpatient status only applies prospectively, starting from the time the patient is formally admitted pursuant to a physician order for inpatient admission, in accordance with our current policy.”

Comment: Some commenters stated that the proposed policy change appears to suggest that the completion of admission orders would now be optional and other available documentation could be used to create retroactive orders.

CMS Response: “Regarding the comment about retroactive orders, it has been and continues to be longstanding Medicare policy to not permit retroactive orders. The order must be furnished at or before the time of the inpatient admission. The order can be written in advance of the formal admission (for example, for a prescheduled surgery), but the inpatient admission does not occur until hospital services are provided to the beneficiary.”

Comment: Commenters inquired if the proposal would change the requirements regarding which practitioners are allowed to furnish inpatient admission orders.

Response: “The proposed revision relating to hospital inpatient admission order documentation requirements under Medicare Part A does not include revisions to the requirements regarding which practitioners are allowed to furnish inpatient admission orders.”

What was Not Proposed and Has Not Changed?

Hospitals have struggled with this requirement since it was finalized in the 2014 IPPS Final Rule. While I truly believe that this policy revision is a good thing for hospitals, it is vital to be mindful of what has not changed.

  • Hospitals and physicians are still required to document relevant orders in the medical record to substantiate medical necessity requirements.
  • The requirement remains that an individual is considered an inpatient if formally admitted as an inpatient under an order for inpatient admission.
  • Nothing was proposed nor changed with respect to the “2 midnight” payment policy.
  • Guidance from the Medicare benefits Policy Manual (MBPM), Chapter 1, Section 10.2 will not change. Specifically, “The order to admit may be missing or defective (that is, illegible, or incomplete, for example ‘inpatient’ is not specified), yet the intent, decision, and recommendation of the ordering practitioner to admit the beneficiary as an inpatient can clearly be derived from the medical record. In these situations, contractors have been provided with discretion to determine that this information provides acceptable evidence to support the hospital inpatient admission. However, there can be no uncertainty regarding the intent, decision, and recommendation by the ordering practitioner to admit the beneficiary as an inpatient, and no reasonable possibility that the care could have been adequately provided in an outpatient setting.”
  • Physician certification of inpatient services continues to be a requirement for cases that are 20 inpatient days or more (long-stay cases), for outlier cases of hospitals other than inpatient psychiatric facilities, and for cases of Critical Access Hospitals as per the CY 2015 OPPS/AC final rule (79 FR 66997), and 42 CFR part 312, subpart F, 42 CFR 424.13, and 42 CFR 424.15.

One final reminder, this policy change will become effective with hospital discharges on or after October 1, 2018. So for now stay vigilant with making sure there is a valid inpatient order in your records prior to the beneficiary being discharged.

Be on the lookout for more articles about the Final Rule over the next few weeks. Until then, you can access a copy of the Final Rule on the CMS IPPS Homepage at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2019-IPPS-Final-Rule-Home-Page.html.

Article by Beth Cobb

Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Services at Medical Management Plus, Inc.  Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system. 

In her current position, Beth is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Risk Assessment (CRA) Tool. You may contact Beth at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.

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