Short-Stay Inpatient Admission Audit Process Changes Coming in April

The Centers for Medicare & Medicaid Services (CMS) will be changing the criteria for short-stay audits in April, according to KePRO, one of the Medicare Quality Improvement Organizations (QIOs), which posted the announcement on its home Web page.

“CMS is changing the selection process for medical records for short-stay reviews,” the posting read. “Previously, smaller providers had a request (limit) for 10 cases, and larger institutions had a request (limit) for 25 cases. Beginning in April 2017, this process will change. The top 175 providers with high or increasing number of short-stay claims will have 25 cases randomly sampled, and other providers that had a ‘major concern’ in the previous round of reviews will have 10 cases randomly sampled.”

“This is a big change to the previously announced plans, where each hospital would have 10 to 25 charts audited every six months,” said Ronald Hirsch, MD, in an email to RACmonitor. “In fact, although this change is announced on the KePRO site, there is no formal notice of the change on the CMS sites as of this writing.”

Hirsch said that during personal correspondence with CMS, he obtained more details. He said the change was made in response to the December 2015 report from the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) in which the OIG recommended targeting hospitals with high or an increasing rate of short inpatient stays.

“Additionally, I was told that CMS has instructed the Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs) to review the top 175 providers in each region, and not 175 throughout the nation as the KePRO announcement suggested,” Hirsch said. “Although there are two BFCC-QIOs with contracts, there are actually five BFCC-QIO regions. That means 875 hospitals, or about 15 percent of all hospitals in the U.S., would be subject to these audits.”

Hirsch also said that the designation of the 175 hospitals in each region will not simply be “taking a list of the number of short inpatient admissions at each hospital in the region and auditing the top 175; that would disproportionately adversely affect large hospitals.”

“Instead,” Hirsch explained, “CMS will be looking at the short-stay admission volume as a percent of all admissions and will monitor specific (but unspecified) DRG utilization.”

“CMS will also be working with the QIOs to look at beneficiary complaints, presumably to target long observation stays, which was the other issue addressed in the OIG report,” Hirsch said. “Although those hospitals, which stand out on this measure, will not be subject to additional audits, they will likely be contacted by the QIO to collaborate on improving the beneficiary experience.”

Hirsch also asked CMS if hospitals that were not found to be a “major concern” among the top 175 would be exempt from audits in the future. CMS stated that “no provider would be audit-free.”

“How that translates on a practical basis remains to be seen, but I would expect that the top 175 lists would be monitored on a regular basis to guide the QIOs to new target hospitals and ‘free’ other hospitals that have improved their performance,” Hirsch reasoned. “It, therefore, seems that after this round of audits, we will no longer be using the ‘minor, moderate, and major concern’ categories. I doubt anyone will miss those categories, especially the hospitals who had no denials yet were labeled as being a ‘minor concern.’”

Hirsch said that this new paradigm adds more uncertainty for hospitals and stresses the importance of continuous compliance with the two-midnight rule for every patient, every day.

“It is also unclear how CMS will determine who gets referred for auditing by the Recovery Audit Contractors (RACs) now that they have resumed their work under the new contracts,” Hirsch concluded. “It also seems that the use of Occurrence Span Code 72, discussed in my previous RACmonitor article, may even be more important than ever to keep hospitals from appearing on one of CMS’s top 175 lists.”