Claims for some medically necessary admissions are being denied by recovery audit contractors (RACs) because there is no physician order, even though CMS says generally things shouldn’t go down that way.

RACs in some cases acknowledge the inpatient services were medically necessary but contend that the overpayment determination was based on missing or inadequate physician admission level-of-care orders, says Andrei Costantino, director of organizational integrity for Trinity Health in Farmington Hills, Mich. Admission level-of-care orders, also known as admit orders, are physician orders that state the correct setting for the patient’s treatment — acute inpatient care, outpatient for observation services or another level of care.

Because of these RAC denials, Trinity and other health systems have been “self-denying” claims when physician admit orders are missing or incomplete even though the services were provided and are medically necessary, he says. In other words, hospitals don’t submit them at all, which means they provide expensive, medically necessary care to patients free because they can’t find the admit order or it is flawed. Or they don’t appeal denials. That’s unfair to hospitals that invest in high-quality care to patients, Costantino says, and it’s time for them to stop killing claims that lack physician admit orders if they are medically necessary and meet other Medicare requirements. “We gave all that great quality care and we may have messed up by not getting the admission order, but this is purely a technical denial,” he says.

Costantino thinks he has some support for that position based on a CMS technical direction letter. CMS issues technical direction letters to Medicare administrative contractors in order to provide supplementary guidance on tasks in their performance to work statements, and usually this information isn’t public. But an Aug. 29, 2011, memo adapted from CMS Technical Direction Letter 11447 says a lack of physician orders is not necessarily the death penalty for a claim. “If the order to admit is missing or defective (i.e., illegible or incomplete), yet the physician intent, physician decision and physician recommendation to admit to inpatient can clearly be derived from the medical record, contractors have the discretion to substitute this information for a written or electronic admission order,” according to the CMS memo, which was posted on the website of TrailBlazer Enterprises, a MAC. It also notes that “CMS is in the process of clarifying the guidelines related to orders for inpatient hospital admissions” (RMC 7/23/12, p. 1).

A CMS official tells RMC that problems with physician orders alone should not result in RAC overpayment determinations on their face. “CMS has given the RACs guidance to not deny for lack of physician order. RACs do not deny for lack of a physician order,” says Connie Leonard, director of the Division for Recovery Audit Operations. “In fact, if the claim would be otherwise payable, meaning everything else is fine on a claim, the RAC would only forward the claim to the MAC for possible further review.”

RACs See It Differently

But RACs say differently. For one thing, “inpatient admissions without a physician’s inpatient admit order” is listed as an approved audit issue on some RAC websites, such as CGI Federal, the RAC for region B. And two RAC “review results letters” to hospitals, obtained by RMC, explain that the hospitals’ claims were denied because of missing or problematic physician orders.

In one letter, CGI Federal denied a hospital’s inpatient admission for diseases and disorders of the digestive system (MS-DRG 378), diagnostic codes 53541, 2851, 311, 319, 4589 and 53081. According to the review results letter, the patient was a 46-year-old with a history of mental retardation and gastroesophageal reflux. She presented with an acute episode of nausea, vomiting and diarrhea, and her white blood count was 14 and Hgb 10.6. Bleeding was tentatively attributed to esophagus or stomach tears or peptic ulcer. She was put on IV anti-emetics and Nexium and scheduled for an endoscopy procedure the next morning. The RAC did not reclassify any of the codes or the MS-DRG, and, in fact, states that “the recovery audit finds that the requirements for inpatient status as outlined in Medicare’s regulatory documents have been met and the acute inpatient admission is approved as medically necessary.” However, the RAC said, “It was identified that an inpatient admission order was not present in the file. Admissions to the inpatient setting require a physician’s signed order to qualify and be paid as an acute inpatient stay.…The admission is denied based on insufficient information due to no physician orders.”

CCO: Hospital Would Win Appeal

Another copy of a review results letter — this one from HealthDataInsights, the RAC for region D — is a little more confusing. The RAC agreed with the medical necessity of the patient’s admission, but it denied the claim because “no admission order is noted.” There are physician orders for observation, but when the patient’s status was changed to inpatient, apparently the physician didn’t write an order or it could not be located by the hospital. In this case, the patient was a 68-year-old man with a history of coronary artery disease, paroxysmal ventricular tachycardia, and heart attack. He came to the hospital for a planned cardiac catheterization and things went well, but he was placed in observation after the recovery period and later admitted for atypical chest pain and frequent ventricular tachycardia. The patient was stable and discharged the next day.

The hospital’s compliance officer, who preferred not to be identified, tells RMC that he thinks the hospital would “easily win on appeal because the overall documentation supports an inpatient stay” — and because the RAC review results letter says “a review of the submitted medical record for this inpatient claim supports an inpatient level of care.” Yet the claim was denied, with the RAC hanging the denial on its inability to divine the physician’s intent for this patient to be admitted.

The one good thing to come out of RAC denials for lack of physician orders: Trinity decided to double check its processes for ensuring physician admit orders are in the charts, says Harriet Kinney, manager of organizational integrity. Using Trinity’s electronic health records (EHR) system, “we set up a little test that checks for an admit order on every patient in every hospital on our EHR,” she says. Every morning this report checks whether there is some kind of admit order, whether it’s inpatient or outpatient, on every patient in-house.

The tests are paying off. On the first run at one hospital, it revealed that a patient was in his seventh day in-house without a written physician admit order in the chart, Kinney says. “We immediately had case management review the medical record, and then they talked to the hospital leadership and the attending physician,” she says. Subsequently, an admit order was added for the days moving forward. Physician orders can’t be back-dated (RMC 5/28/12, p. 1). “Every physician and hospital leader is grateful to have this daily report run. It encompasses providing the best care for their patient,” she says. Running routine checks for admit orders is easy because of EHRs. Missing or incomplete orders are caught within 24 hours or less, Kinney says. For those hospitals that lack EHRs, it is a challenge to replicate this process because it becomes a daily manual process performed by unit clerks who have many other daily responsibilities. “Both processes work to mitigate risk from a clinical as well as a compliance standpoint,” she says.

To read the TrailBlazer memo on the CMS technical director letter, visit http://www.trailblazerhealth.com/tools/Notices.aspx?ID=14575

© 2012 by Atlantic Information Services, Inc. All Rights Reserved.

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