When I got off the phone, I had just one question floating in my mind: Is this Managed Medicaid contract and physician review process a scam? I found myself with many unanswered questions. Here's how that went down. On a recent patient of mine, the utilization review experts at my hospital said my patient met both the intensity of services requirement and the diagnosis requirements necessary to meet inpatient criteria. In order to qualify for an inpatient admission, hospital admission the patient must meet very specific criteria published in a thousand page book that defines what diagnosis must be present and what hospital services must be provided to qualify for an inpatient hospital stay.
You can't simply drop grandma off at the ER and demand admission because you're tired of taking care of her. That's what a nursing home is for. I am not a nursing home doctor. I am a hospital doctor. A hospitalist. A hospital is not the appropriate place for a nursing home patient. The nursing home is.
Under Medicare rules, patients can remain observation status (a form of outpatient) for up to 48 hours . After 48 hours, if the physician determines not to admit them to inpatient, the patient should be discharged. Once the patient is inpatient status they will then be subject to the rules of payment known as diagnosis related group (DRG). DRG is a bundled payment system where all the hospital care of a patient is paid based on the primary diagnosis and other complicating conditions. If you are in the hospital for one day or 10 days, theoretically, the hospital should get paid the same under DRG rules. In other words, under a DRG payment your hospital might get paid $10,000 for a diagnosis of pneumonia complicated by heart failure. That $10,000 would be paid whether the patient was admitted for one day or 10 days. That's how the DRG works.
Unfortunately, after speaking with my physician review colleague representing the managed Medicaid I discovered that may not be the case. For my patient above, the one I admitted with clearly defined inpatient criteria, I ended up discharging them before the 48 hour window. In other words, I gave such excellent care and the patient responded so nicely to my therapies that they were able to safely discharge home prior to 48 hours.
And how does managed Medicaid reward the hospital for the excellent care I provided? They deny the inpatient claim and a physician review colleague certifies it for observation status only. That's when Happy got involved. I was asked by my hospital to contact this physician review colleague for a peer-to-peer discussion of the facts.
Little did this physician review colleague know that I am a finely tuned coding machine. I got a sense, from my own discussion with this physician review colleague that a bad faith effort was being systematically employed to deny claims of service that obviously met accepted standards.
The conversation was collegial. He was pleasant. I was pleasant. He explained his position as an actively practicing clinical internist with some part time association with a major academic institution. He does the physician review work on the side. He started off by explaining to me how he had reviewed the patient's chart and came to the determination that because the patient improved so quickly and because they were discharged before 48 hours, the patient should appropriately be approved for an observation stay.
You see, observation payment rates are far less than inpatient DRGs. By denying inpatient status, the managed Medicaid can save money and that's what this is all about. I have grave doubts about the ability of physicians to remain neutral in the physician review process. If they are paying for your opinions, they are going to stop asking for your opinion if you stop providing ones that are beneficial to their bottom line. The way I see it, the fewer claims reversed by physician reviewer the more likely they will get asked to review more claims. The more claims the physician reviewer reverses, the less likely they are to be asked for their opinion.
So I asked the doctor
"How is it that my patient meets inpatient criteria on admission but not on discharge? How is it possible that one can certify an admission as inpatient on day one but not on day two?"
And the answer I got from my physician review colleague? It is a rule of the Department of Health and Human Services. The government. Even I can't imagine they would be that stupid. My physician review colleague told me that their managed Medicaid contract can deny an inpatient stay based on time as directed by our own government, despite meeting criteria for inpatient based on standard acceptable practices.
I don't believe it one bit. And my coding people have never heard of such a claim either. They just see the claims being denied day after day, week after week. I was floored when I heard this. I still don't believe it. He told me that denying the inpatient claim was not some willy nilly process of picking and choosing which claims to deny and which not to. My impression was that this was a systemic policy not implemented with the blessing and backing of the Department of Health and Human Services.
My impression, after speaking with my physician review colleague, was that every inpatient claim lasting less than 48 hours was automatically denied as inpatient and sent for physician review, at which point the physician reviewer had the opportunity to reverse that decision or let it continue on as an approved stay for observation only
I realized when my physician review colleague tried to make me believe that an observation stay was considered an inpatient stay that I knew more than he did in terms of how the game works. After the physician reviewer tried to pawn that thought off on me I made it very clear to him that I am considered an expert by other local colleagues in the games of billing and coding. And I was not happy with his lack of explanation about my patient's denial of payment for inpatient stay.
I questioned my physician reviewer intently to try and understand how he, a physician reviewer, came to the conclusion that my patient, who clearly met inpatient criteria on admission, failed to be certified by his own standards. It came down simply to the time factor. The patient was hospitalized for less than 48 hours. From what I gathered in my conversation, Manage Medicaid has a right to deny inpatient payment and my physician review colleague stated this was not their policy but rather the policy of the Department of Health and Human Services.
I still don't believe that one bit, but let's just assume that's true. Let's assume that HHS says all admissions less than 48 hours can be denied inpatient status. Let's assume they do that for all of their obligations. From what I hear from my coding people, that seems to be the track record for the last six months for managed Medicaid: a categorical denial of all inpatient stays lasting less than 48 hours.
What happens when the inpatient claim is denied? According to my conversation with my physician reviewer, all those claims come to him or other physician review specialists who then review the chart and either agree or disagree with the ruling. In my case, my physician review colleague agreed that my patient should reimbursed only as an observation status.
So I asked my physician review colleague again:
What would happen if I admitted a patient to the ICU in shock, on three pressors and on a ventilator for maximal support, he got better within 12 hours, was eating a normal breakfast by the next morning and was discharged to home in less than 24 hours? What would happen if this was a managed Medicaid patient?
The answer was shocking to say the least. This patient's inpatient stay would be denied because it lasted less than 48 hours. At which point a physician reviewer would evaluate the chart and "clearly overturn" the observation. He told me this patient would get approved every single time for inpatient status after going through the physician review process.
So I asked him, what criteria HE was using to make a determination that a patient does or doesn't meet inpatient criteria, independent of the amount of time the patient spends in the hospital. I ask him because my coding people have a 1000 page book with very exquisite rules that define whether a patient meets inpatient criteria or not. So I wanted to know what criteria my physician review colleague was using when he reviewed the chart to determine whether or not inpatient criteria was met on my patient.
And you know what his answer was? He didn't have one. His answer defaulted back to the right of the Department of Health and Human Services to apply observation status to all Medicaid patients admitted less than 48 hours. At which point I told him that was not an acceptable answer. I told my physician reviewer that if my patients meet criteria for admission on day #1 neither I nor my hospital should be punished in payment for providing such excellent care that allows them to leave less than 48 hours after admission. That using time as the criteria for determining whether a patient meets inpatient criteria or not was not acceptable.
At which point he said he would send the patient's chart on for a second appeal. To which I have just one question: Who might that be? If this physician review colleague is in charge of deciding whether all less than 48 hour admissions meet a gestalt feeling on whether they should be inpatient or observation because they seemed to get well quickly, what criteria is the next layer of obstruction at managed Medicaid going to use to deny a claim that clearly meets the established standards for inpatient criteria.
I talked with my care managers and relayed what I had learned from my conversation with my physician reviewer. To my untrained eye, it appears to me that managed Medicaid is engaging in a bad faith process of unilateral denial of all claims under 48 hours with a physician review process that appears to me to be based on random feelings of gestalt.