CMS Finalizes Proposal for Inpatient Admission Order

Change to the inpatient admission order considered to be major.

Late last week, the Centers for Medicare & Medicaid Services (CMS) released the Inpatient Prospective Payment System Final Rule, which becomes effective on Oct. 1. It’s 2,593 pages, so get reading.

I have to commend the CMS staff for their work on this rule. I know few of you actually read these rules, but if you want a taste of what the CMS staff undertakes, read the 64 pages starting on page 487. That is the section in which they evaluate the new CAR-T treatment for leukemia and lymphoma for eligibility for a new technology add-on payment.

Not only do they evaluate the applicable DRG and patient volumes, but also the science behind the treatment, and I’ll admit, they used terminology that I didn’t understand. “Utilize a gene transfer process to modify autologous patient immune cells with a chimeric antigen receptor capable of directing immune mediated killing.”

What does that mean? Well, the CMS staff figured it out, and have awarded new technology status to CAR-T therapy, with an additional $186,000 paid for the treatment. But remember, by law the payment rate is only 50 percent of the cost of a new treatment, so every treatment means a loss of at least $186,000. But you know what the finance people say: we may lose money on every case, but we will make it up on volume.

CMS also added inpatient transfers to hospice to those admissions that will be subject to a reduced DRG payment if their length of stay is less than the geometric mean minus one day. While hospitals may not be happy about this, it is not a frequent occurrence, so it should have little revenue impact. Now, if CMS does this for patients who are admitted as inpatients and subsequently die within a few days, that would be painful. And by the way, this applies to all transfers to hospice, be it inpatient hospice or hospice at home. In the commentary, CMS said that commenters objected to this change because “such payment policies would dissuade transfers to hospice care.” I sure hope that is not true and no one would ever delay discussing hospice because of money.

CMS also finalized its proposal concerning the inpatient admission order. It’s summer, and I did not want to spend my weekend trying to interpret what CMS said, so I can’t provide a detailed analysis, but it is clear that as of Oct. 1, if the inpatient admission order is not authenticated prior to discharge, the claim will not be automatically denied – nor do hospitals have to self-deny if that authentication happened after discharge.

CMS noted that it was never its intent to have the Quality Improvement Organizations (QIOs) deny these admissions, nor to have hospitals self-deny them, but unfortunately, both the QIOs and hospitals have spent the last five years thinking that if CMS set it as a condition of payment, there would be no room for leniency.

Now, what are the other implications of their change of heart? I’ll be spending the next two weeks figuring that out for my upcoming webcast on Aug. 16.

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