Master the upcoming ICD-10 code and IPPS changes! Prepare your team for the upcoming changes taking effect on October 1. Discover the benefits of IPPSPalooza and how it can drive your success. Click here >

Inpatient vs Outpatient: The Debate Continues

Observation volumes continue to stress hospitals.                             

The utilization process is very difficult and complicated. We must continue to advocate for our elders and utilize their Medicare benefits correctly. We should be using all our patients’ benefits correctly, so let’s talk about something that concerns us about our insurance companies’ behaviors over the past few years. 

Observation Services.

In order to discuss this, I just want to remind you what the Centers for Medicare & Medicaid Services (CMS) says about observation:

Remember that time frame: 48 hours.

The CMS two-midnight rule, implemented in October 2013, should have taken care of the swirl of debate regarding inpatient versus observation status, but it seems that it really only added to the confusion of who to put in observation. And the fact that CMS uses the definition of hospital services as “services that are performed in the hospital” did not help either, did it? I get that there are people who come to the hospital to seek help despite having no valid clinical reasons to be there, but those are few and far between. And isn’t it sad that those become the stories we hear? How many other patients do we not even hear about, for whom we actually chose wrong, due to fear of an audit?

What about the way that some insurance carriers have taken the concept of observation and completely ignored the definition and the time frame? Most of the examples I have cannot be confirmed, because insurance companies do not provide their policies to us, but here are some examples of where we are challenged on any given day, in any hospital: 

  1. We have heard that there are certain insurances that have internal policies requiring their utilization management (UM) nurses approve only observation for more than 100 Diagnosis-Related Groups (DRGs.) That’s interesting considering that the DRG is not even confirmed until after discharge and all documents are coded. Even with concurrent coding, the DRG is not finalized. So really, these nurses are making a medical decision that should be a physician’s responsibility.
  2. We have also heard that there are other insurances that are going on 96 hours of observation before they will even discuss conversion to an inpatient level of care. And then they want the patient to meet inpatient admission criteria on Day 5.
  3. We have examples of patients who have insurance and were denied for inpatient level of care, remaining in observation for days, weeks, or months, with the insurance taking no responsibility for assisting with transition out of the facility. 
  4. We have examples of our behavioral health patients being denied inpatient level of care in the emergency department, and then no ancillary help being offered to them.

All of these insurance companies claim they use a set of screening criteria, be it MCG or Interqual. Yet these examples above would suggest they do not. If and when you are negotiating your contracts with insurance companies, it is highly recommended you call out the UM process independently, and contract to abide by one set of rules. Whatever that set of rules is, there will be some wins and some losses on both sides, but we need to get back to the basics, and we need to utilize patient benefits as they were meant to be used. This way we can spend our resources on things that matter – like patient care!

Print Friendly, PDF & Email
Facebook
Twitter
LinkedIn
Email
Print

Mary Beth Pace, RN, BSN, MBA, ACM, CMAC

Mary Beth Pace is vice president of care management at Trinity Health.

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Mastering the Two-Midnight Rule: Keys to Navigating Short-Stay Admissions with Confidence

Mastering the Two-Midnight Rule: Keys to Navigating Short-Stay Admissions with Confidence

The CMS Two-Midnight Rule and short-stay audits are here to stay, impacting inpatient and outpatient admissions, ASC procedures, and Medicare Parts C & D. New for 2024, the Two-Midnight Rule applies to Medicare Advantage patients, requiring differentiation between Medicare plans affecting Case Managers, Utilization Review, and operational processes and knowledge of a vital distinction between these patients that influences post-discharge medical reviews and compliance risk. Join Michael G. Calahan for a comprehensive webcast covering federal laws for all admission processes. Gain the knowledge needed to navigate audits effectively and optimize patient access points, personnel, and compliance strategies. Learn Two-Midnight Rule essentials, Medicare Advantage implications, and compliance best practices. Discover operational insights for short-stay admissions, outpatient observation, and the ever-changing Inpatient-Only Listing.

Print Friendly, PDF & Email
September 19, 2023
Secondary Diagnosis Coding: A Deep Dive into Guidelines and Best Practices

Secondary Diagnosis Coding: A Deep Dive into Guidelines and Best Practices

Explore comprehensive guidelines and best practices for secondary diagnosis coding in our illuminating webcast. Delve into the intricacies of accurately assigning secondary diagnosis codes to ensure precise medical documentation. Learn how to navigate complex scenarios and adhere to coding regulations while enhancing coding proficiency. Our expert-led webcast covers essential insights, including documentation requirements, sequencing strategies, and industry updates. Elevate your coding skills and stay current with the latest coding advancements so you can determine the correct DRG assignment to optimize reimbursement, support medical decision-making, and maintain compliance.

Print Friendly, PDF & Email
September 20, 2023
Principal Diagnosis Coding: Mastering Selection and Sequencing

Principal Diagnosis Coding: Mastering Selection and Sequencing

Enhance your inpatient coding precision and revenue with Principal Diagnosis Coding: Mastering Selection and Sequencing. Join our expert-led webcast to conquer the challenges of principal diagnosis selection and sequencing. We’ll decode the intricacies of ICD-10-CM guidelines, equipping you with a clear grasp of the rules and the official UHDDS principal diagnosis definition. Uncover the crucial role of coding conventions, master the sequencing of related conditions, and confidently tackle cases with equally valid principal diagnoses.

Print Friendly, PDF & Email
September 14, 2023
2024 IPPS Summit: Final Rule Update with Expert Insights and Analysis

2024 IPPS Summit: Final Rule Update with Expert Insights and Analysis

Only ICD10monitor delivers what you need: updates on must-know changes associated with the FY24 Inpatient Prospective Payment System (IPPS) Final Rule, including new ICD-10-CM/PCS codes, plus insights, analysis and answers to questions from the country’s most respected subject matter experts.

Print Friendly, PDF & Email
2024 IPPS Summit Day 3: MS-DRG Shifts and NTAPs

2024 IPPS Summit Day 3: MS-DRG Shifts and NTAPs

This third session in our 2024 IPPS Summit will feature a review of FY24 changes to the MS-DRG methodology and new technology add-on payments (NTAPs), presented by senior healthcare consultant Laurie Johnson, with bonus insights and analysis from two acclaimed subject matter experts

Print Friendly, PDF & Email
August 17, 2023

Trending News