2-Midnight Rule: Medicare's New 2013 Inpatient Hospital Payment Policy Explained (CMS 1599-P).

Hospitalists have risen to the challenge of only providing medically reasonable and necessary inpatient hospital care under the rules of three-midnight medicine.  They have refused to delay patient discharges just so patients could enjoy  high quality care in the nursing home of their choice that is paid for by our Medicare National Bank.  They are willing to accept discharge to home and face the music of bad patient satisfaction survey scores filled out by angry family members who are upset their hospitalist wouldn't commit Medicare fraud to get grandma to a Medicare paid nursing home for the next 100 days so she could avoid selling her assets and enter Medicaid without a fight.  Nope.  Hospitalists everywhere are taking the ethical road and accepting their bad scores in defeat, knowing their ethics matter more than Medicare rules and regulations.

 I tip my hat to all my fellow hospitalists who refuse to commit Medicare fraud in the interest of patient satisfaction. It just doesn't happen, ever.  We are an honest breed.   I know all my fellow brethren follow this wholesome practice style and have never even considered holding on to a patient just-one-more-day to qualify them for their three midnight stay in the hospital.  And for that, we are going to be rewarded by Medicare.    Hold on to your seats.  Medicare just gave us a bombshell that promises to change how we practice medicine forever.  They're calling it the 2-midnight rule (and 1-midnight rule too).  The 2-midnight rule changes everything and we owe it to ourselves to get educated.  We need to understand the importance  of chart documentation requirements we will be asked to comply with starting October 1st, 2013. Read this whole article and then read it again and pass it on to all your hospitalist friends so they too can increase their value to hospitals.  As hospital funding takes us on a race to the bottom, we must learn  how to maximize our calorie intake at ObamaCare's Budget Buffet or we too will end up in the hospital as an  observation admission for acute exacerbation of too-angry-for-discharge.

I have now been a hospitalist for ten years.  A consistently frustrating job in my role as physician is my requirement to determine whether a patient should be admitted as inpatient or observation status.  If you are a Medicare patient or a family member of a Medicare patient admitted to the hospital,  you should always ask during your admission evaluation whether the order is being written for inpatient or observation. Don't ever assume that being admitted into the hospital means you are inpatient.   If you have no idea what inpatient vs observation status means, you're not alone, but you owe it to yourself to understand.  Medicare has an  excellent patient resource to help explain all the important financial implications.  I encourage all Medicare patients and their family to click this link and save the pdf file for quick review.

Medicare Part A rules apply if the physician writes an order for inpatient but Medicare Part B rules apply if the physician writes an order for observation.  Observation is considered outpatient.  That means all the copays, deductibles and coverage inclusions or exclusions are determined by what order the physician has written.  Patients without supplemental insurance will get a bill for 20% of all charges incurred during an observation hospital stay because Medicare Part B only covers 80% of allowed outpatient Medicare charges.  Patients without Medicare Part B will get a bill for full price. This mostly affects veterans who have Medicare Part A coverage but choose not to pay for Medicare Part B coverage due to their VA benefits.   Most of these folks say they want to stay in their local hospital because they say, "I have Medicare".  Most have no idea that not paying for Medicare Part B means they aren't covered for observation stays at their local hospital unless the VA is willing to pay for that care.   I wouldn't count on that.  

Most patients pay for Medicare Part B.  Most patients have a supplemental policy too, so the issue is a  non issue, except for payment of home medications administered in the hospital. The biggest problem occurs when physicians write an order for observation status and don't tell patients their routine self administered home medications will not be paid for by their Medicare insurance if the hospital provides these pills for them.  Patients  also have an obligation to educate themselves about the rules of their plan.  Because Medicare will not pay, neither will a patient's supplemental policy.   That means the hospital will send their patient a very large bill for the $25 dollar Tylenol given for their observation stay for headache,  thus causing them another trip to the ER and observation admission for chest pain when they get their $2,000 bill three weeks after discharge.   Since this $25 Tylenol is not covered under insurance, the patient gets no benefit of the insurance discount.   In addition, I would not always count on Medicare Part D picking up the tab.  They may, under certain circumstances, but I wouldn't consider that option reliable.    Grandma gets to pay full price for that $25 pain pill.  Oops, sorry about that, right?

I have a personal rule to notify every patient I admit observation status into the hospital of this hole in their Medicare coverage so I can give them the opportunity to either provide their home medications for my hospital  to verify and administer  by the nurse or to hold all their routine home medications until their expected less than 48 hour observation stay has been completed.  Sometimes doctors may even  look the other way while recommending patients take  their own pills without telling anyone.  Universally, patients are grateful for my discussion.  Unfortunately, this uncompensated time isn't paid for and doesn't affect patient satisfaction scores.  That only applies to inpatients.  It is a freebie for my time out of respect for my patient's sanity. Unfortunately, I am the exception to the rule.  Nobody explains this rule to patients so they can understand the implications to their financial health.  I have stopped counting how many times I have heard angry patients describe their bills for several thousand dollars they received three weeks after a 24 hour stay in the hospital.  It's a good thing their anger doesn't count for patient satisfaction scores.  Maybe that's why nobody takes the time to care.  

Determining inpatient or observation status is complex.  Medicare says  physicians must write an inpatient order for hospitals to get paid for inpatient care (Medicare Part A rules), but having a physician write the order does not guarantee Medicare will pay.  Medicare wants it both ways.  They require the order but refuse to accept the order as law.  So my question becomes, why require a physician order if the order has no teeth?  Why not develop a different process that provides experts with the opportunity make the decision.  I have no idea why physician input is even relevent.   Physicians aren't trained to know this stuff.  We are guessing 100% of the time.  That's right folks, physicians are not trained to know all the details required for Medicare to pay or deny an inpatient stay.   So we guess, every time.  All of us.  It's irrational, I know.  Most hospitals have utilization review experts that scour the patient chart for information to determine whether my order for inpatient or observation status was correct, but this rarely happens in real time.  If I get it right, nothing happens.  If I get it wrong, I am often asked to consider writing an order to change the status, which may affect patient coverage for self administered medications already provided.  Oops, sorry about that, right?  It's a shameful way to treat patients.

What are physicians thinking about on admission?  In addition to evaluation and stabilization, the medical plan from the start often revolves around methods to quickly and safely get the patient discharged to the next appropriate level of care.   That may mean physicians provide an intensity of service much higher than would be expected for  the patient's number-of-wrinkles/age ratio.   That may mean an aggressively documented thought process to include one-in-a-million-doc types of conditions that would make any residency director put on their pimping caps with an excitement only a morning report can provide.  This process defines skilled nursing facility (SNF) driven medicine  all across this country.  EMTALA is the leaky faucet and "sniffs" are the plumber.  The moment patients are admitted to a hospital, the astute hospitalist is already formulating a plan to get free front row tickets in the too-weak-to-pee-on-my-own  section of the the three-midnight-road-rally paid for by the Medicare National Bank.

Hospitalists are writing orders and aggressively documenting their grave concerns about acute exacerbation of too-old-to-answer-a-question-without-telling-a-story as a reason to meet inpatient criteria and writing essays about why inpatient status is required to qualify for a three midnight hospitel stay and early disposition to the land of skilled nurses in a nursing home.   It happens everywhere in this country, except on my service and in my hospital.  Trust me.  I refuse to play that atrocious game.  My patients whom I admit with acute exacerbation of  too-old-to-go-home and life threatening cases of upset-son-is-demanding-admission only get exactly what they need and not a thing more.   They don't get medically reasonable and necessary intravenous fluids running  at 150 cc/hour for 72 hours because their baseline creatinine is 1.223.  They do not get medically reasonable and necessary every 4 hour neuro checks for 72 hours because they're pinky toe is numb without explanation after being stepped on  by a farm animal.   They won't get that MRI on day three, making sure to wait until agressive hydration has been achieved and they definitely won't get the blood cultures that require inpatient monitoring to rule out sepsis as a contribution to their three year battle with perma-supine syndrome.   No.  Sir.  Ree.  My patients don't get any of that medically reasonable and necessary care to get them qualified for their three midnight stay and a golden ticket to the palace in the Sniffdom of their choice provided for under medically  reasonable and necessary Medicare benefits paid for by IOUs to the Canadian, British and Chinese governments.

Are you confused yet?    Well, things are about to change, again.  Many Medicare carriers determine appropriateness of inpatient status by using a combination of diagnosis and intensity of service to determine whether inpatient criteria has been met. For example, diagnoses such as back pain, chest pain, pain in my ass, weakness, syncope and abdominal pain won't get you qualified for inpatient status unless you have a really good hospitalist with extra fellowship training treating exacerbation of needthreemidnightitis as a Medicare approved major complication and comorbidity.     When I write the wrong order, lots of paper work must happen for the hospital to get paid.  Even I  have to retroactively change my billing to match the hospital status  or my physician claims will get denied.  Most doctors aren't trained on any of this stuff. 

On April 26th, 2013, the Centers for Medicare & Medicaid Services (CMS) issued an assortment of  proposed rule changes to update 2014 Medicare payment under the Inpatient Prospective Payment System (IPPS) to be applied to discharges on or after October 1st, 2013.      Comments on these proposed rule changes will be accepted through June 25th, 2013 with a final ruling to be issued August 1st, 2013.  The proposed rule change (CMS-1599-P, RIN 0938-AR53 ) will be published in the Federal Registrar on May 10th, 2013, but can be found here at this time with my focus here on pages 657-678.  It's a fascinating look into the mind of Medicare madness.  It has huge implications on how we practice medicine as a hospitalist and what we will be asked to document in the chart.  It adds another layer of complexity to our role as documenteurs.   This CMS fact sheet gives a summary of the proposed rules change.  The bolded words are stressed by me.  

Admission and Medical Review Criteria for Inpatient Services.
 In the proposed rule, CMS clarifies its longstanding policy on how Medicare contractors review inpatient admissions for payment purposes. Under this proposed rule, CMS is proposing that hospital inpatient admissions spanning at least two midnights (that is, at least more than one Medicare utilization day), will presumptively qualify as appropriate for payment under Medicare Part A. Conversely, hospital inpatient admissions spanning less than two midnights (that is, less than one Medicare utilization day) will presumptively be inappropriate for payment under Medicare Part A.  

This presumption may be overcome by documentation in the medical record supporting the admitting physician’s expectation that the beneficiary would need care spanning at least two midnights and an unforeseen circumstance results in a shorter beneficiary stay than the physician’s expectation. Physicians must support their expectation, and accordingly their order for admission, through clear and complete medical documentation. This proposed policy would address longstanding concerns from hospitals that they need more guidance on when a patient is appropriately treated and paid by Medicare as an inpatient.  At the same time the proposed change would help beneficiaries who in recent years have been having longer stays as outpatients because of hospital uncertainties about payment if they admit the patient to the hospital.

Let me give you a little background about why Medicare is making some changes.  Medicare is bankrupt. As a result, they have a program in place to retroactively take back money paid to hospitals for services they may determine not to be medically necessary and appropriate.  Much of the recovery has focused on inpatient hospital stays of short duration.  Hospitals responded by approaching physicians with recommendations to admit patients as observation status instead of inpatient status or apply observation status to patients already admitted as inpatient in an effort to avoid denial of payment from Medicare.  Hospitals want to get paid.  Medicare doesn't want to pay.  Do you see the problem here?

As a result, many Medicare beneficiaries have experienced longer and more expensive stays in the hospital with higher Medicare Part B financial obligations during observation stays.    Since 2006, the number of cases of Medicare beneficiaries experiencing greater than 48 hours of observation has increased from 3% in 2006 to 8% in 2011.  This proposed rule is an attempt to help doctors and hospitals write inpatient orders, with a confidence that they will not be denied, if documentation continues to support physician expectations of greater than 2 days in the hospital providing medically reasonable and necessary care.  Of course, even by their own admission, abuse potential is great  and will be monitored.  I have reviewed the proposed rule change, as it currently resides, on pages 657-678 of the current document.  If you've gotten this far, you are obviously interested in this stuff so I encourage you to review it for yourself as well.  It has a great potential to change how we practice and document as hospitalists for the simple fact that great hospitalists with additional fellowship training in documenting-smoke-and-mirrors can make anything look medically reasonable and necessary.  The abuse potential  they fear is going to hit Medicare financing straight in the noggin. Just look at the three midnight rule.  Patients who are alive, but not really, get shipped off everyday to skilled nursing facilities after their 3-midnight hospital stay for acute exacerbation of frozen body syndrome because they can.  Let's take a look at the proposed changes, shall we?

For the first time, as far as I can tell, CMS is telling hospitals and physicians that length of treatment will determine whether patients qualify for inpatient or observation status.  The proposed rule is directing carriers to presume hospital inpatient admissions are reasonable and necessary if they cross two midnights and the hospital services are medically necessary and appropriate.  Page 657 of the government document details the proposed rule change, with the following statement:

Policy Proposal on Admission and Medical Review Criteria for Hospital Inpatient Services under Medicare Part A 

Before this proposed rule change,  the only requirements for inpatient status were a physician (or other qualified practitioner) order and medical necessity.  On page 661 of this document, stakeholders recommended redefining the parameters to include a beneficiary's length of stay at the hospital.  Here is the current documentation on pages 661-662.  Pay special attention to section between the blue arrows I have highlighted at the end:

There you have it folks.  For the first time, Medicare is going to define length of a hospital stay as reasonable and necessary based on how long patients are in the hospital or are even just expected to be in the hospital.   How is this proposed rule change going to be applied in real life?  Fast forward to page 663 and the proposed rules change gets even juicier.  It describes how Medicare's external review contractors  will be required to act:

I think this single paragraph on the proposed rule change is going to transform how hospitalists document in the chart.  Medicare has defined for us exactly what is reasonable and necessary for inpatient care.  The answer is two midnights.  The way I see it, the 2-midnight rule is now our value mandate as a practicing specialty.  We have been given the two-midnight rule and I guarantee to all that is true in this world, this is going to be the Bible for hospitalist medicine.  Hospitalists that can document a  yellow brick road straight to the top of Two Midnight Mountain are going to see their value to administrators explode as diagnosis related groups (DRGs) are the drug of choice for hospitals addicted to Medicare dollars.

External review contractors are now required to presume the threshold of reasonable and necessary for 2-midnight stays.  Experienced hospitalists have an amazing ability to provide documentation supporting medically necessary care to anything that barely breaths, barely moves or barely speaks in our chronically alive, but not really patients admitted for medically necessary and reasonable nursing home care.  Everything great hospitalists do is medically necessary because their documentation says so. Great hospitalists are worth their weight in gold for this very reason.  External review contractors will never be able to show abuse of the 2-midnight presumption by  hospitalist groups with great documentations skills.  This. Is What. Hospitalists. Do. For. A. Living.  Hospitalists are documentation experts.  They play that game better than anyone.  Hospital systems aren't going to  subsidize hospitalists $140,000 per year per hospitalist for nothing.   For all intents and purposes, hospitalists are documentation whores and hospitals are their pimps.

How do hospital inpatient payments currently get denied?  Page 668-669 provides a nice summary.  In a nutshell, payments made in error by CMS are more frequently associated with short stay procedural  inpatient claims that should have been provided on a hospital outpatient basis, which I believe is the driving force  behind this proposed rule change:

How bad have the errors been?  Continuing on with page 669:

In Medicare's eyes, the errors are due to procedures, not little old grandpa admitted with acute exacerbation of too-unsteady-to-ballroom-dance and have nothing to do with hospitalist patients  who also get three inpatient midnights for a primary diagnosis of too-wrinkled-to-smile.   As a hospitalist, I am not admitting observation patients who just had an EGD or heart catheterization.  I am admitting my 98 year old grandmothers who's family can't take care of them anymore so they drop them off at the emergency room for us to handle instead of  placing them in a nursing home because they refuse to sell off her assets to qualify for Medicaid instead of planning for the future and purchasing long term care insurance policies.

These are patients where hospitalists with exceptional documentation skills can make anything medically reasonable and necessary and show value under the 2-midnight rule where no value previously existed.  This documentation is important because Medicare clearly says on page 671 that a physician order for inpatient shall not by itself make a patient qualified.  The medical necessity review rule continues as follows:

In other words, just because the physician writes an order for inpatient, it doesn't mean the inpatient status is automatically correct.  This gets me back to my original issue.  If the physician order isn't the law, then why have the requirement in the first place.  Why not bypass the physician and have a process in place that allows people trained in the determination of inpatient vs outpatient make the determination.  Why not allow hospital utilization review experts to make determinations on a retrospective basis and get rid of all the errors we have to deal with under this process.  I would love to write an order for "Hospital bed:  status per utilization review team" and have Medicare pay for all charges up to that moment in time  regardless of the status of the patient.  That would make patients happy.

In addition to the physician order, medical necessity reviews will continue as described in the medical review criteria for all hospital services and the inpatient hospital admission guidelines.  Pages 672-675 are the four most important pages and every hospitalist should read them and learn them, with special emphasis on the bottom of page 673  through the top of page 675.  These three pages are going to transform how we document our social admits who are too-old-to-breath-in-the-upright-position so they can get qualified for three midnights under a diagnosis of  need-two-on-the-way-to-three-midnightitis :

It's all about documentation people.  Clear as day, Medicare is going to focus on patients who are being billed inpatient who do not stay more than 2 midnights.  They may continue to audit the rest,  but they are not going to focus their energies on that population unless they find an attempt to game the system (as if somehow the 3-midnight SNF rule is not being gamed).  Great hospitalists could get any patient who is admitted with a diagnosis of patient-becomes-invisible-due-to malnutrition-and-old-age-when-they-turn-sideways-but-they-have-no-other-medical-problems qualified for a ten day hospital stay with reasonable and necessary medical care.  I hate to tell Medicare the bad news, but from where I'm sitting in the peanut gallery, the entire country is gaming the Medicare system.  It's-All-One-Giant-Game.  The 3 midnight rule is already a farce.  We now have the 2-midnight rule too!  Hurray! Oh, and the 1-midnight-rule too!  Yeah!

Medicare's rule change has just given hospitalists the social admit green light to write inpatient orders on all their patients with acute exacerbations of too-demented-to-care-about-paying-for-a-nursing-home-but-the-daughter-wants-the-farmland.  Why do I say this?  Because Medicare clearly states they are going to use physician documentation of the "reasonable basis for the expectation of a stay crossing 2-midnights" that will justify the medical necessity of the inpatient admission.  If this isn't an entry into the Inpatient Social Admit Marathon, then you're not reading what I'm reading.  Social admits ALWAYS take longer than two midnights to disposition out of the hospital.  If a hospitalist states on admission that they think their admission for too-slothy-to-support-themselves  is going to be in the hospital longer than two midnights, all they need to do is document their supporting reasons. They state that clear as day:

"The judgement of the physician and the physician's order for inpatient admission should be based on such complex medical factors as patient history and comorbidities, the severity of signs and symptoms, current medical needs  and the risk of an adverse event."

Every social admit a hospitalist is asked to admit  into the hospital could qualify for inpatient based on the expectation of the process taking longer than two midnights to provide an appropriate discharge to the community (especially at really crappy hospitals) and documenting their judgement of  risk for an adverse event if they are not discharged to a nursing facility.  They way I see it, Medicare is telling me I can qualify my 98 year old patient who is too-weak-to-hyperventilate as inpatient status by simply writing the following statement:

It is my medical judgement that Mrs Smith presents as a great danger to herself if not continuously monitored in a 24 hour care setting.   Due to   ___________________ (write anything reasonable that doesn't seem related to patient or family convenience) I do not expect Mrs Smith to be discharged in less than two midnights. 

What are the reasons social admits always take longer than two midnights to discharge? Just off the top of my head, here are some reasons:

• It's the weekend and everyone knows nursing homes don't accept new SNF patients on the weekend.
• It's a holiday.  See above.
• The patient is homeless and can't find their Medicare card.
• The patient is drunk.  It takes two days to safely get them sober.
• The patient refuses to be discharged and files an appeal.  You get two midnights right there.
• It takes two midnights to get the psychiatrist to see the patient to tell you they can't make their own decisions.
• Any patient admitted after 6 pm by the night hospitalist isn't going to get discharged before 6 pm the next day.  That's because they'll be done rounding at 9 am and all the tests won't get done until the afternoon and that means another midnight waiting for test results.  
• The powers of attorney won't return your phone calls.
• It takes two midnights for families to choose a nursing home.
• Families demand 12 consultants to prove grandma is just old and weak.
• There is no access to clinic records on weekends. 
• Home medications can't be verified until after the patient is already discharged.  
• Physical therapists are too busy to see them on day one.  Bam!  You got another midnight.
• The powers of attorney is crazy themselves.  
• The patient won't talk to you or You won't talk to them because they are too hard of hearing. 

How can hospitalists encourage compliance with the 2-midnight inpatient rule that is really nothing more than a gateway to 3-midnight Heaven ?  Try these methods:

• Tell families to go home and don't answer their cell phone for two midnights.  Don't call me.  I'll call you.
• Tell families to tell the hospitalist grandpa was hallucinating this morning, although nobody saw it.  Make sure to refuse the CT of the head your hospitalist will order.  Delirium will buy you a midnight, maybe two.
• Order a cardiac stress test after the patient has has their morning coffee.  Oops.  Sorry about that. I guess they'll have to wait another midnight to get their test.
• Place them on telemetry.  Note the one beat run of VT, but forget to call for a cardiology consult until late in the day on a Friday night.  
•  If you admit  a patient on Friday, just forget to request clinic records until Saturday.  That buys you the weekend while you wait for their clinic to open on Monday.  It's not safe to discharge the patient without a complete picture of their health.  
• Order lots of lab tests. Don't follow up on them until the next day.  Regardless of what the labs show, order an advanced imaging test, but don't follow up on the results until the next day.  Bam.  Two midnights.
• Just order a bone marrow biopsy on a weekend to prove grandma doesn't have a case of disseminated it-just-doesn't-matter.  Nobody does bone marrow biopsies on weekends.  Cancel the bone marrow biopsy on Monday after confirming the patient's case of it-just-doesn't-matter.  

I'm fascinated by this proposed rule on several levels.  All those patients who are too weak to go home have just found themselves a  way into the golden palace of a skilled nursing facility (SNF) paid for by Medicare, otherwise known as a free nursing home.  As I interpret this proposed ruling, hospitalists can write an order for inpatient status and document their expectation of longer than 2-midnights in the hospital by documenting their on going concerns to rule out stroke, rule out sepsis and rule out acute exacerbation of old age, regardless of their intensity of service, and support that documentation with further concerns about adverse events, comorbid conditions and severity of signs and symptoms and their patient qualifies for inpatient status because CMS will presume them to qualify as appropriate.

Just wait until the general public gets a hold of this change.  No longer do they need to worry about caring for grandma at home.  Just bring them to the adult humane society (aka the ER), get them their two midnights  on the way to the mandatory three SNF midnights and it's a Friday night SNF party at the fancy nursing home with skilled nurses.  Once hospitalists get past that second midnight with inpatient status while ruling out occult bacteremia in the absence of fever, absence of leukocytosis and the absence of standard of care,  they can easily get their third SNF midnight by documenting their need to confirm acute exacerbation of needs-three-midnights-and-a-place-to-live-upon-discharge.

Alternatively, I'm fascinated by all the acute drug overdose patients who require ventilator support in the ICU that are admitted at 1 am and are discharged by 3 pm.  Apparently, they aren't in the hospital long enough to be admitted inpatient if the hospitalist believes they can be discharged before the following night.  Apparently, they are only being observed on the ventilator to determine whether or not to actually turn the ventilator on.    Being sick on the ventilator for less than one midnight just doesn't cut it anymore.  If you want to qualify your critically ill drug overdose for inpatient, you'd best consider telling the family to go home and get more drugs to double the suicide dose so the hospitalist doesn't extubate them too soon from life support.  It's a matter of life or 2-midnights.

However, If hospitalists document their confidence in their excellent care team and can get their critically ill patient discharged in less than two midnights, their hospital may be  punished.  They should instead consider providing suboptimal care, generate an iatrogenic critical medication error or two and delay the discharge past the second midnight to verify payment under inpatient status.  Or maybe they should just delay their discharge for another midnight so their clearly obvious inpatient care gets paid for as an inpatient and not the less funded observation rate.

Yes folks, Medicare gave hospitalists the 3-midnight rule.     Now they are preparing to give hospitalists the 2-midnight and 1-midnight rules.  On October 1st, 2013, how hospitalists document their social admits will provide a great opportunity for them to show value where none previously existed.  Turn that observation frown upside down and give your 108 year old with a mild case of  too-old-to-calculate-her-age-based-on-her-date-of-birth a golden ticket to inpatient status and one small midnight away from the dream SNF of her choice.  You owe it to her.  She's 108 years old and you're not.

Medicaid Pay Increase For Hospitalists Confirmed For 2013-2014.

Are hospitalists going to get a Medicaid pay raise for 2013 and 2014?  The answer is yes, hospitalists qualify for Medicaid parity (with Medicare) as required by the Affordable Care Act (ACA).  For many states, Medicaid pays physicians and other providers a fraction of Medicare rates.  Legislation signed as part of the ACA mandates Medicaid rates to equal 100% of Part B Medicare rates in calendar year (CY) 2013 and 2014.  That means  if you haven't already seen increased rates, and you are a qualified physician providing qualfied primary care services, you will get increased Medicaid payments retroactively applied to January 1st, 2013.

When folks think of primary care, most likely think of the outpatient clinics for pediatrics, family medicine and internal medicine physicians.  But that's not how ObamaCare defines a primary care specialty.  That's right people, hospitalists, pediatric cardiologists and a whole lot of other practicing physicians now qualify as providers of primary care under ACA rules.

I was first alerted to this stunning CY 2013 and 2014 increase in Medicaid payments for hospitalists after reading an article from The Hospitalist titled Afordable Care Act (ACA) Provision Carries Pay Raise For Some Hospitalists.  Joshua Bowell, the Society of Hospital Medicine's senior manager of government relations, discusses the rules and how they apply to hospitalists.  It's a great article and I encourage all hospitalists to click the link above, read it and forward it to their billing company to make sure all necessary paperwork has been  filed to qualify for increased Medicaid payments and retroactive Medicaid payment increases that are required to start on  January 1st, 2013.

What are the specifics of this law?  You can read the  Fall 2011 rule abstract that implements section 1202 of the Affordable Care Act (ACA)  here.   I have taken the liberty of publishing it below for your review:

Title: Payments for Primary Care Services Under the Medicaid Program (CMS-2370-P)  

Abstract: This proposed rule would implement section 1202 of the Affordable Care Act that requires payment by State Medicaid agencies of at least the Medicare rates in effect in calendar years (CYs) 2013 and 2014 for primary care services delivered by a physician with a specialty designation of family medicine, general internal medicine, or pediatric medicine. This rule would implement the statutory payment provisions uniformly across all States. Specifically, this proposed rule would define, for purposes of enhanced Federal match, eligible primary care providers and identify eligible primary care services, as well as specify how the enhanced payment should be calculated. This proposed rule would also provide general guidelines for implementing the enhanced payment for managed care services.

So how does a hospitalist and a  pediatric cardiologist qualify for primary care under the proposed rule above?  Great question.  To understand the answer, one must understand how the rule defines the qualified physician providing the qualified primary care service.   I did a little digging to find out how.  Do you know how hard it is to find all this stuff?  The November 6, 2012 Federal Registrar published the final ruling (with a minor correction published December 14th, 2012) titled RIN 0938-AQ63 as it applies to the regulation mandating Medicaid parity with Medicare Part B payments for qualified primary care physicians.  Here is the lead summary paragraph of the final ruling:

How does this final ruling define a physician delivering a primary care service?   According to the Federal Registrar, the November 6th, 2012 final ruling amends several sections of the Social Security Act, specifically, 1902(a)(13), 1902(jj), 1932(f), and 1905(dd).  Effective March 20th, 2010,  section 1902(jj) of the Social Security Act now defines a primary care service as follows:

There you have it folks.  ObamaCare has defined, through amendment of the Social Security Act, exactly what primary care services are.  It is the delivery of evaluation and management services to title XVIII beneficiaries.  Title XVIII is Medicare.   It appears to me that any physician that submits payment for a qualified  E&M charge is submitting a service for a primary care service. What are the E&M codes eligible to receive higher Medicaid payments?  Evaluation and Management codes 99201-99499 of the Healthcare Common Procedure Coding System (HCPCS) and vaccine administration codes 90460, 90461, 90471, 90472, 90473 and 90474 have been lawfully determined to qualify for Medicaid parity payments in CY 2013 and 2014.

As a hospitalist, that means most E&M charges qualify for higher Medicaid payments.  All initial hospital codes, subsequent care codes, critical care codes, observation codes, and same day admit/discharge codes are included by law.  Yes folks, my critical care is considered primary care.  And my emergency room codes?  If I see a patient in the emergency room and decide not to admit them, my emergency department E&M code is considered a primary care service.  Sorry ER doctor, even though you submit the same code, you do not get parity under this law.  But why?  For many ER doctors, they are the Medicaid patient's primary care provider through dozens of ER visits a year.  If any doctor is the primary care doctor for a Medicaid patient, it's the ER physician because no primary care doctor will see them!  Why can't they get paid the higher rate?

Does any physician who submits an E/M code get parity payments for their primary care service?  Can a urologist get paid Medicaid parity for their office visits? Can a general surgeon get Medicaid parity for their cholecystectomy?  The answer is no.  Why can a pediatric cardiologist get Medicaid parity but a general surgeon can not?  The answer lies in how ObamaCare defines an eligible physician.  Return back to the summary statement above and you'll see the physician must have a specialty designation of family medicine, pediatric medicine or general internal medicine.  A urologist and general surgeon does not meet that requirement. But how does a pediatric cardiologist make the cut?

The answer lies in this law's interpretation. After the proposed rule was published in May, 2012, one hundred and seventy-seven comments were received.  Some of those comments reviewed below helped clarify the who is an eligible physician question.  Read this section thoroughly to fully understand who qualifies and who doesn't.  Click on the picture to take you directly  to the Federal Registrar paragraph contained within.

And that folks is how a pediatric cardiologist gets a Medicaid pay increase for their E&M services in CY 2013 and 2014.  The interpretation of this law adds 44 additional specialty designations to the qualifying list for Medicaid parity.  What is the gist of the argument?  A pediatric cardiologist is trained in the specialty designation of pediatric medicine and thus qualifies for Medicaid fee increases to match Medicare payment rates for 2013 and 2014.   The law says if a physician is recognized by the American Board of Physician Specialities (ABPS), the American Board of Medical Specialties (ABMS) or the American Osteopathic Association (AOA) as a specialist or subspecialist within the primary care categories, they receive Medicaid parity for their E/M charges.

What if the physician is not certified by any of these boards?  The law allows for Medicaid pay raises if  60% of the codes billed in the calendar year of enrollment were for qualified primary care services that has been defined above.  I suspect the 60% applies to the absolute number of codes submitted and not 60% of the total RVU value for the calendar year.  If the answer is absolute codes, then almost any qualifying physician could qualify by virtue of submitting at least two E&M codes for every non E&M procedure code done in the procedure suite.  That would give them a 66% rate of E&M charges which is  above the required 60% threshold.  I'm confident most medical subspecialists could clear the 60% threshold with no problem as long as they average at least two E&M charges for every non E&M procedure code they provide on any given day.

What about services provide by nonphysician practitioners?  Do nurse practitioners, pharmacists, midwives, certified registered nurse anesthetists  or other qualified nonphysician practitioners  receive the mandatory increases in Medicaid payments?  The answer is only if they are billing under the supervision of an eligible physician.  That means the answer is no for independent nonphysician practitioners but yes if they are working with physicians in the qualified specialties listed above.  Seems silly, doesn't it?  A pediatric cardiologist can spend 80% of their time in the cath lab doing procedures, but if they submit at least 60% of their codes as E&M charges they can get Medicaid parity on their office visits, hospital consults and hospital follow-up codes.  But the independently practicing certified nurse midwife administering the flu shot to protect mom and baby cannot.

Oh, and sorry OB/Gyn doctors.  You may be the only physician for your patients and provide 100% primary care to 80% of your patient population, but you don't qualify for federal subsidized Medicaid fee increases because you didn't train in pediatric medicine, family medicine or general internal medicine.   Maybe you should have been a pediatric cardiologist instead.  ObamaCare says they are  providing massive amounts of primary care these days, and by primary care, I mean telling the patient to contact their primary care provider to fill out the Family Medical Leave Act paperwork so they can have mom and dad at the bedside while they take Junior to the cath lab.

What about states that don't plan on expanding Medicaid eligibility?  That has no bearing on the requirement for eligible physicians providing eligible E&M services to get paid 100% of their Part B Medicare rate on their Medicaid charges for CY 2013 and 2014.  Whether states decide to expand Medicaid or not, qualified doctors  providing qualified E&M charges get a raise on their Medicaid payment rates.

What happens after 2014?  As noted in the Federal Registrar, states are required to report Medicaid participation rates to Congress in anticipation of decisions to continue or discontinue the current federal subsidy for qualifying Medicaid charges.  I'm sure that's  going to be another political fight.  I've asked a few of my colleagues about what they intend to do with  Medicaid.  All of them say they have no intention of expanding their clinic slots to include a greater proportion of Medicaid patients.  My facebook post confirms that.  They can easily fill up their clinic with follow-up visits on their current panel of patients with chronic disease. I suspect after these two years are up we're going to see no increase in Medicaid participation.  Physicians don't run their business on a two year horizon.  Imagine expanding a clinic to include a large influx of Medicaid patients only to try and balance the budget based on unstable Medicare politics and a Medicaid policy that falls off the cliff after CY 2014.

What physician in their right mind would budget that?  I'm willing to bet almost none.  The quirks of this law are simply mind boggling.  Pediatric cardiologists and hospitalists will get Medicaid parity for their ICU work but an independently practicing certified nurse midwife trying to take care of mom and baby as the only provider from conception to birth will not.  I don't need to say anything more.  Oh yeah, one last thing.  How much is this little experiment going to cost?  The expected cost to the federal government for this Medicaid parity pay increase is 5.6 billion dollars in calendar year 2013 and 5.745 billion dollars in 2014 (using 2012 constant dollars).  What's another 11 billion dollars we don't have matter, right?  

Place of Service (POS) CMS List Coding Instructions Revised (CR7631).

Every physician or other provider encounter requires a place of service (POS) code for proper claims processing.  But how should a physician determine their point of service? The Centers for Medicare and Medicaid Services (CMS) put an end to that question once and for all with Change Request 7631.  Apparently, there have been too many errors over too many years with physicians and other providers reporting the wrong site of service location.  

As far as I can tell, this Change Request 7631 was originally submitted March 29th, 2012 under Transmittal 2435 in the CMS Manual System.  Transmittal 2435 was replaced by Transmittal 2561 on September 28th, 2012,  which was replaced by Transmittal 2563 on October 11, 2012, which was replaced by transmittal 2613 on December December 14th, 2012, which was finally replaced by Transmittal 2679 on March 29th, 2013 in the CMS Manual System.  But we're not done yet folks.  CMS says in transmittal 2679 they will discuss place of service for laboratory and pathology services through another change request at a later date.  Yes folks, single payer government Medicare efficiency is alive and well.

Transmittal 2679 establishes a national policy for the correct place of service code assignment.  CMS has a table of all POS codes that are used by all Medicare contractors, Medicaid and private insurance companies as well.  Each POS code is defined as a facility or nonfacility place of service for payment purposes under the Medicare Physician Fee Schedule (MPFS).   In the now rescinded December 11, 2009 Transmittal 1873, physicians were instructed to submit their two digit place of service based on their physical location during when providing the service (the service location).

This has now changed.  With only two exceptions, the place of service code shall now be the same location the beneficiary received their face-to-face service.  In cases where a face-to-face encounter is removed (such as providing the professional component in the interpretation of a diagnostic test) at a distant site, the POS code for the professional component shall be determined by the setting in which the technical component was provided.  The two exceptions to this face-to-face provision rule defined in Transmittal 2679 are defined as follows:

"For a service rendered to a patient who is an inpatient of a hospital (POS code 21) or an outpatient of a hospital (POS code 22), the facility rate is paid, regardless of where the face-to-face encounter with the beneficiary occurred"

But don't even think about moving to India or contracting with a bunch of radiologists from India. Medicare will not pay for your service. It says so right in Section 60 of this manual:

Payment may not be made for a medical service (or a portion of it) that was subcontracted to another provider or supplier located outside the United States. For example, if a radiologist who practices in India analyzes imaging tests that were performed on a beneficiary in the United States, Medicare would not pay the radiologist or the U.S. facility that performed the imaging test for any of the services that were performed by the radiologist in India.

Place of service codes carry a number between 01 and 99.   They can be divided in to two main categories of payment:  facility payment rate and nonfacility payment rate.   The settings where point of service codes are paid at the facility rate are

• Inpatient hospital (POS code 21)
• Emergency room hospital (POS code 23)
• Medicare participating ASC (POS code 24)
• Skilled Nursing Facility for a Part A resident (POS code 34)
• Ambulance on land (POS code 41)
• Ambulance on air or water (POS code 42)
• Inpatient psychiatric facility (POS code 51)
• Community mental health center (POS code 53)
• Psychiatric residential treatment center (POS code 56)
• Comprehensive inpatient rehabilitation center (POS code 61)

Physician's services are paid at the nonfacility rate at the following point of service locations

• Pharmacy (POS code 1)
• School (POS code 3)
• Homeless shelter (POS code 4)
• Prison/Correctional Facility (POS code 9)
• Home or private residence of patient (POS code 12)
• Assisted living facility (POS code 13)
• Group Home (POS code 14)
• Mobile Unit (POS code 15)
• Temporary lodging (POS code 16)
• Walk-in retail health clinic (POS code 17)
• Urgent care facility (POS code 20)
• Birthing center (POS code 25)
• Nursing facility and SNFs to part B residents (POS code 32)
• Custodial care facility (POS code 33)
• Independent clinic (POS code 49)
• Federally qualified health center (POS code 50)
• Intermediate health care facility/mentally retarded (POS code 54)
• Residential substance abuse treatment facility (POS code 55)
• Non-residential abuse treatment facility (POS code 57)
• Mass immunization center (POS code 60)
• Comprehensive outpatient rehabilitation facility (POS code 62)
• End-stage renal disease treatment facility (POS code 65)
• State or local health clinic (POS code 71)
• Rural health clinic (POS code 72)
• Independent laboratory (POS code 81)
• Other place of service (POS code 99)

All of the above information has been nicely packaged into an easy to read MLN Matters publication for your quick and easy review, should you wish to proceed.  Because most of you don't care, I've taken the liberty of contacting CMS myself for better clarity on POS code 99.  They have agreed POS code 99 needs better clarity and have asked The Happy Hospitalist to use his influence to further the data mining expedition known as The Medicare National Bank.   In addition to these widely publicized point of service codes, CMS has contracted with The Happy Hospital to help further clarify "other place of service" codes as part of an effort to make the roll out of ICD 10 even more thorough.  Here is a list of recently approved point of service codes that will be included on the absolute most final transmittal ever, or at least until the next one is made.  

• Cardiac arrest anywhere (POS code blue)
• Cardiac arrest at a movie theater (POS code Blues Brothers)
• GI endoscopy suite (POS code brown)
• At an accountant's office (POS tax code)
• At a medical coder's office (POS over coding)
• At an FBI office (POS secret code)
• At a CIA office (POS crack the code)
• At Google Maps headquarters (POS zip code)
• At the Friday night dance with the elderlies club (POS no code)
• At a software convention (POS source code)
• At a Department of Defense (POS morse code)
• At a lawyers convention (POS code of conduct)
• At a convention of conspiracy theorists (POS Da Vinci code)
• In a supermarket (POS bar code)
• In a childs playground (POS code word)
• At war (POS code of honor)
• At a boarding school (POS dress code)
• At a construction site (POS building code)

Any questions?

Hospital Patient Chart Dropped = More Work For Nurses.

If I drop a patient's hospital chart, I would never expect someone else to put it back together.  I dropped it.  I put it back together.  I expect the same if I drop a cup of coffee all over the computers at the nurses station.  I spilled the coffee, I clean it up.   That's just my perspective.  That's why I'm surprised to see some nurses come to the rescue of the poor helpless doctor who dropped the patient's chart.  "I can clean that up for you", they say.  "Just leave it and I will put it back together", say other clerks and nurses.  It's almost as if there is a class in nursing school called How To Put Your Doctor's Dropped Patient Chart Back Together With A Smile While Keeping Your Angry Thoughts To Yourself.  On second thought,  maybe these nurses just figure the doctor will just make things worse.

Is this attitude unique to the nurses?  I've never seen another doctor offer to put together a chart that another doctor or another nurse dropped.  Oh, let me put that back together for you are words I have never heard another physician speak in my ten years of hurried hospitalist life.   To think there are some doctors out there who would not take responsibility for fixing their own patient charts makes me sad to call myself a doctor.  It's not something I understand, but then again, I also clean up all my own sharpies after a procedure and would not expect a nurse to do it for me.

Hospital patient charts can come in all shapes and sizes.  They can open side-to-side or top-to-bottom.  They can be secured with clips or they can be fastened together with ringed binders.  They can be large, small, big or small.   Most of my charts have ringed binders.  Occasionally, I may  open the rings to take out an EKG or an x ray report to review with another physician.   This is a dangerous time for potentially catastrophic chart annihilation.  If the chart is not safely resting in a place far away from the surface edge,   I guarantee it will find its way on to the floor in a million pieces.  Never  leave an open chart unattended.  That's  just asking for trouble.  

I've dropped, bumped, nudged and mishandled hundreds of hospital charts over the years.  Only a small percentage actually make it onto the floor in a scattered and disorganized array of lab results, progress notes, orders and nursing documentation that will never be read again.  I can tell you with confidence, my heart stops at the instant that chart hits the floor.  I think to myself, "Am I about to spend the next ten minutes putting together hundreds of pages of charting that nobody reads anyway?"  At the exact moment that chart hits the floor, I am frozen with anticipation from this gravity confirming event. 

The worst chart mishaps are those where the chart just falls.  I have no explanation why it falls.  Nobody is standing near it.  Nobody is touching it.  It just happens.  Bam!  Down goes the chart.  That's the moment when everyone looks around to see who is to blame and who is expected to put it back together.  In the old school world of hospital hierarchy, there was no question about who owned the task of hospital patient chart organizer.  It was, of course, the job of the nurse.  Today, that expectation lingers with some nurses.   For others, not so much, as this nursing someecard below helps to explain. Perhaps, someday, when the entire paper hospital chart is replaced by a fully electronic medical record, chart dropping hazards will disappear.  Unfortunately, the job of the nurse will not end there.  It will instead be replaced by helpless doctors  asking nurses to get lab results and xray reports pulled up in the computer.  For reasons that make no sense to me,  some doctors can complete medical school, residency and intensive fellowships requiring years of specialized training,  but they can't type their user ID and password into a computer to find information vital to their patient's care plan.

Doctors Accepting Medicaid? facebook Says There Are None (Picture).

Citizens who claim Obamacare is a major victory for patients are going to be greatly disappointed to learn that Obamacare promises to provide health care insurance without health care access.  Obamacare promises to massively expand Medicaid.  Medicaid is broke. The only places accepting Medicaid these days are hospitals and emergency rooms.   I have been a practicing hospitalist now for ten years.  I have seen Medicaid failures first hand.  In my community of Lincoln, NE, finding a new doctor to accept Medicaid is nearly impossible.  In fact, I have witnessed first hand how difficult it is to get a hospitalized patient of mine with Medicaid to find a primary care physician post hospital stay to establish new patient care.  It took over 35 phone calls to over 35 clinics to find one physician's office willing to accept a new Medicaid patients.  In fact, one office even required five years worth of records and an interview appointment before they would consider accepting a new Medicaid patient.

That's thirty five calls to physicians before one would accept a new Medicaid patient.  ObamaCare promises to massively expand Medicaid and promises to cover some of the expansion with unstable federal money that will surely be held hostage by party politics.  Physicians aren't biting.  Most physicians can easily fill their schedules with follow up appointments of their other chronic disease patients.   For many doctors' offices, accepting new Medicaid patients are not in their budget or long term business plan. It's not just internists and family medicine physicians that are not accepting new Medicaid patients.  It's also our colleagues in the pediatric world.  I was recently shown a facebook screen shot of a woman who was looking for a pediatrician for their eight month old child with United Healthcare Share Advantage Medicaid insurance.

This is the same company I have have problems as a hospitalist getting inpatient status approved on patients who have spent less than 24 hours in the hospital (due to our excellent care), but meet inpatient criteria by all objective standards.  What I saw was sad, but not shocking.  Why should physicians be expected to  accept insurance that costs them money every time an appointment is made.  I recently wrote a Facebook comment about a physician in my community who said they make $1 for every Medicaid appointment.  If they saw four Medicaid patients in an hour, they would only make $4 an hour.  They said they don't work for $4 an hour.  I am sad for this woman and her child.  Their hearts must be broken just trying to find a physician to be her child's doctor. They must think all these great doctors are greedy for not accepting Medicaid.  Many people have no idea just how badly Medicaid pays.

 It's not the doctor's fault Medicaid pays so poorly that they have to turn away innocent eight month old children in favor of other commercial payers with more reasonable rates.    It's no wonder why so many other citizens are opposed to Obamacare.  The idea of universal access to insurance does  not equate to universal access to doctors.  I think emergency rooms had better get prepared for a rapid rise in new patients with Medicaid insurance but no outpatient doctor willing to see them. Why don't doctors accept Medicaid?  Running a doctor's office is a business.  Doctors can't treat anyone if they can't pay their bills.    Hugs and thank yous don't pay the office electric bills.  The future of Obamacare is here and now, but it's going to get a lot worse by making bad policy worse.