A Look Back at 2013

on Wednesday, 08 January 2014. All News Items | Miscellaneous

As we ring in the New Year, let’s take one last look back at some of the most significant changes impacting our clients from an Inpatient perspective in 2013. Drum roll please, and in no particular order:

  1. Medicare Administrative Contractors (MACs) continue the process of re-competing for their contracts and the Jurisdictions continue to be consolidated. As the Jurisdictions change they will transition from a number to a letter as can be seen in the following map.


Source: http://www.cms.gov/Medicare/Medicare-Contracting/Medicare-Administrative-Contractors/Downloads/A-B-Jurisdiction-Map-July-2013.pdf

  1. Medicare Compliance Reviews: The Office of Inspector General has ramped up their Medicare Hospital Compliance reviews. To date, four hospitals have had the unpleasant distinction of having their findings extrapolated. A complete list of all posted reviews can be found at: https://oig.hhs.gov/newsroom/podcasts/hospital-compliance/

  1. Recovery Auditors (RAs): Findings through the third quarter of 2013 revealed that nationwide overpayments collected was $855.3 million dollars and the top issues by region continued to either be the medical necessity of cardiovascular procedures or the medical necessity of minor surgery or other treatment billed as an Inpatient.


Source: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Recovery-Audit-Program/Downloads/Medicare-FFS-Recovery-Audit-Program-3rd-qtr-2013-v-090313.pdf

  1. RAs Contracts: On May 22, 2013 CMS announced that they have started the “procurement process for the new Medicare Fee for Service Recovery Audit Program contracts. The CMS plans to contract with four A/B Recovery Auditors and one national DME and Home Health/Hospice Recovery Auditor.” While the MACs are transitioning from Jurisdiction numbers to Jurisdiction letters, the Recovery Auditors are going from Region A, B, C and D to Region 1, 2 ,3 and 4. Here is a map depicting the new Regions, which interestingly shows that the states within each Region will be slightly different in the future.

Map-New-RAC-Regions lg

Source: http://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Recovery-Audit-Program/Downloads/AB-Map-2014-2.pdf

The Value Based Purchasing (VBP) Program and Readmission Reduction Program are both designed to improve quality of care to the patient during a hospital inpatient admission.

  1. VBP Program: This incentive program redistribute reductions made to the base operating DRG payment amount made to hospitals based on how well hospitals perform on specific quality measures. On October 1, 2013 the payment reduction increased to 1.25% making the total estimated amount available for value-based incentive payments in FY 2014 approximately $1.1billion.

  1. Readmission Reduction Program: This program penalizes hospitals that have excessive readmission rates within 30 days of an inpatient hospital discharge. The maximum penalty for FY 2014 is 2%.

On November 14, 2013 Kaiser Health News released an Interactive Chart showing Bonuses and Penalties for U.S. Hospitals for both of these programs. Access this chart to see how your hospital is doing at: http://www.kaiserhealthnews.org/Stories/2013/November/14/value-based-purchasing-medicare-hospitals-chart.aspx

  1. Discharge Planning Interpretive Guidelines Revised: On Friday May 17th, 2013, CMS released a Memorandum to State Survey Agency Directors containing revisions to Appendix A – Interpretive Guidelines for 42 CFR 482.32, Discharge Planning. The memorandum instructed that the revisions were effective immediately.

Within this 39-page document are Advisory Boxes that “display successful practices currently found throughout the industry in the area of care transitions.” These boxes are highlighted in blue and while they are not hospital compliance requirements they are useful suggestions for discharge planning process improvements.

  1. The 2014 Inpatient Prospective Payment System (IPPS) Final Rule has taken its toll on hospitals efforts to understand CMS’s definition of what is medical necessity and when should a Medicare patient be admitted as an Inpatient. Detail in the final rule specific to this included:

  • The 2-Midnight Benchmark guidance for Physicians,

  • Who can write an Inpatient Admission Order,

  • The Physician Certification that must be completed on all Medicare admissions prior to the patient being discharged; and

  • The 2-Midnight Presumption guidance for Contractors.

In response to the overwhelming feedback from the hospital community, CMS has hosted several special Open Door Forums, provided a September 5th sub-regulatory guidance regarding the Hospital Inpatient Admission Order and Certification, set up an Inpatient Hospital Review page on the CMS website to release FAQs and downloads, and have scheduled a January 14, 2014 training call to “provide an overview of the inpatient hospital admission and medical review criteria.” During this call CMS will be using case examples to illustrate how to apply the rules. Registration for this even is currently open. Most current to this site is an updated FAQs posted on December 26th.

  1. Probe and Educate Program: This program is a direct result of the hospital community’s requests that there be a delay in the implementation of the 2014 IPPS Final Rule. High level detail about this program includes:

  • This Program will run from October 1, 2013 through March 31, 2014.

  • Medicare Administrative Contractors (MACs) will perform pre-payment patient status reviews of claims for admissions on or after October 1, 2013 with a less than 2 midnight inpatient length of stay.

  • Each hospital will initially be subject to a 10-25 record review based on the size of the hospital.

  • MACs will provide feedback and education based on their review findings.

  • During this time Recovery Auditors have been directed to not review admissions on or after October 1, 2013 with a less than 2 midnight inpatient length of stay. It is important to note that they can continue medical necessity of a surgery and coding validation reviews.

Further guidance about this program can be found on the CMS Inpatient Hospital Reviews webpage.

  1. New Discharge Disposition Codes: The National Uniform Billing Committee (NUBC) developed and approved new discharge status codes that were finalized for use in the 2014 IPPS Final Rule.

An interesting twist is that these codes are to be used specifically for DRG 280 (Acute Myocardial Infarction, Discharged Alive with MCC), DRG 281 (Acute Myocardial Infarction, Discharged Alive with CC), DRG 282 (Acute Myocardial Infarction, Discharged Alive without CC/MCC) and DRG 789 (Neonates, Died or Transferred to Another Acute Care Facility).

New Code (69) is for discharges/transfers of DRG 280, 281 or 282 to a designated disaster alternative care site.

These discharge status codes were proposed and finalized to identify planned readmissions. In response to a comment CMS clarified that “at this time, these new discharge status codes are not related in any way to the Hospital Readmission Reduction Program and will not be taken into account in the readmission measures for that program.” Additional guidance can be found in the on pages 50533 – 50540 of the Final Rule.

As we say good-bye to 2013, CMS continues to provide guidance on the Final Rule and hospitals hopefully have ICD-10 preparedness well under way; 2014 promises to be another year for big changes.

Article by Beth Cobb

Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Services at Medical Management Plus, Inc. Beth has over twenty-two years of experience in healthcare including eleven years in Case Management at a large multi-facility health system. In her current position, Beth monitors, interprets and communicates current and upcoming Case Management / Clinical Documentation issues as they relate to specific entities concerning Medicare. You may contact Beth at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.

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