News Alert Secret CMS Memo Clarifying Inpatient Orders Discovered

Document was reportedly not to be shared with providers

An internal Centers for Medicare & Medicaid Services (CMS) memo on inpatient admission orders has come into possession of RACmonitor. 

The memo, dated Oct. 3, was written to “clarify” the 2019 fiscal year Inpatient Prospective Payment System (IPPS) final rule for long-term care hospitals (LTCH) for inpatient admission order requirements. In the memo, CMS said that the agency had become aware that “particularly during the case review process … discrepancies have occasionally been the sole reason for denying medical payment of … individual claims.”

The memo continues to read that “CMS revised 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, effective dates of admission occurring on or after Oct. 1, 2018.”

A key statement by CMS in its memo is that the revised policy should focus on the medical review process in determining if an inpatient stay was medically necessary and “intended by the admitting physician,” rather than involving an “occasional inadvertent signature or documentation issues unrelated to the medical necessity of the inpatient stay or the intent of the physician.”

CMS explained in its memo that what had changed is “one of the consequences of a missing inpatient order, namely the case reviewers, should not deny a claim with the only reason being technical discrepancies with the documentation of the inpatient order.”

Questions about the memo surfaced when an unidentified hospital contested a denied claim by a reviewer for KEPRO, a Beneficiary and Family-Centered Care Quality Improvement Organization (BFCC-QIO). The hospital argued that since CMS stated in the IPPS proposed rule, released in April, that “it was never their intent that these claims be denied,” the denials issued after that point for lack of authentication of the inpatient admission order should be reversed. The reviewer told the hospital that the KEPRO medical director indicated that although that argument made sense, if they did it for this one hospital, they would be required to “go back and redo everyone’s reviews.” Moreover, according to the hospital, the reviewer said that the KEPRO medical director should not have revealed the memo number – 18-143-CO – during the teleconference with the provider.

At this time, KEPRO reports that it will deny the claim, saying that the issue for this claim is not that the inpatient order is missing or defective; it was present in the record, but was not authenticated prior to the patient leaving the facility. Commenters on a popular user group said it remains unclear why an order that was not authenticated prior to discharge would not be considered a defective order.

A source told RACmonitor that since audits of short inpatient admission stays began several years ago, anecdote suggests that one of the most common reasons for denial has been the lack of authentication of the admission order prior to discharge.

“I would expect that the Medicare Administrative Contractors (MACs) and QIOs reported the reasons for denials, so CMS must have known about this issue for at least a couple of years,” the source told RACmonitor, speaking on condition of annoyminity. “I can understand denials if the length of stay was several days and the physician had ample opportunity to sign that admission order. But these are stays that usually lasted no more than 24 hours. That means there was little time for that order to get authenticated, especially if the physician who gave the order was not available at the hospital that day. I hope that the hospital is successful in its appeal and that CMS considers revering all denials issued since April 24, when they stated it was never their intent that these be denied.”

The hospital says it will appeal.

Read the memo