How 2014 IPPS Final Rule Impacts Physicians Admitting Patients to Hospitals

Friday, August 30, 2013
By Lance O. Leider, J.D., The Health Law Firm and George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On August 2, 2013, the Centers for Medicare and Medicaid Services (CMS) released the 2014 Inpatient Prospective Payment System (IPPS) Final Rule (the 2014 IPPS Final Rule). The 2014 IPPS Final Rule substantially affects how hospitals will bill for observation stays, long outpatient stays and short inpatient stays.

One of the most significant aspects of the 2014 IPPS Final Rule is that it clarifies CMS’ coverage criteria for Medicare Part A inpatient hospital claims, in particular by creating requirements for physician orders and certifications. The 2014 IPPS Final Rule also establishes new guidelines to justify and document the medical necessity of inpatient hospital admissions under Medicare Part A.

The 2014 IPPS Final Rule becomes effective on October 1, 2013.

To read the entire 2014 IPPS Final Rule from the CMS, click here.


Physician Orders and Certifications.


For purposes of payment under Medicare Part A, the definition of an inpatient is if the individual is formally admitted as an inpatient pursuant to an order by a physician or other qualified practitioner. The physician order must be present in the medical records and supported by the admissions and progress notes in order for the hospital to be paid. The 2014 IPPS Final Rule clarifies that an admission order must document the physician’s intent to order inpatient status for the beneficiary.

The 2014 IPPS Final Rule also requires a physician certification of inpatient admissions, meeting the requirements of 42 C.F.R. Section 424.14. In the past it has not been the standard of practice for physicians to complete a certification document for every inpatient admission. This is now a condition for payment under the 2014 IPPS Final Rule.

The physician order is a required component of the certification and must be made at the time of a beneficiary’s admission to the hospital. The certification must be signed and documented in the medical record prior to the patient being discharged from the hospital.


Establishing and Documenting the Medical Necessity of an Inpatient Admission.

The 2014 IPPS Final Rule sets out criteria to establish and document the medical necessity of an inpatient admission. An inpatient admission would be appropriate and would qualify for payment when the physician expects a patient to stay two nights and admits that patient to the hospital based on that expectation. Inpatient admission would also be appropriate if the patient is undergoing a procedure on the inpatient-only list. Otherwise, it is the CMS’ position that an inpatient admission is not medically necessary.

CMS will instruct its medical review contractors to focus auditing efforts on inpatient hospital admissions with lengths of stay crossing one night or less.


Be Familiar with 2014 IPPS Final Rule Prior to Affective Date.


In the 2014 IPPS Final Rule, CMS places an emphasis on the physician’s documentation regarding his or her expectation of a patient’s length of stay. It’s essential that all hospital physicians are educated regarding the heightened importance of documentation in the medical record. Compliance with the Final Rule may require the adoption of new forms and must involve thorough documentation of the need for inpatient hospital services, the physician’s expectations regarding length of stay and rationale for the physician’s opinion.

Once the October 1, 2013, effective date hits, CMS will instruct its medical review contractors to focus auditing efforts on inpatient hospital admissions. To avoid audits and delays in payments, hospital physicians should become familiar with how 2014 IPPS Final Rule will affect their day-to-day practice procedures.


Contact Health Law Attorneys Experienced in the Representation of Health Professionals and Providers.

 
The attorneys of The Health Law Firm provide legal representation to physicians, nurses, nurse practitioners, CRNAs, pain management doctors, dentists, pharmacists, psychologists and other health providers in Department of Health (DOH) investigations, Drug Enforcement Administration (DEA) investigations, FBI investigations, Medicare investigations, Medicaid investigations and other types of investigations of health professionals and providers.
 
To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at www.TheHealthLawFirm.com.


Comments?

How familiar are you with the 2014 IPPS Final Rule? How do you think it will affect your practice? Please leave any thoughtful comments below.


About the Authors: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com  The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone:  (407) 331-6620.

George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.


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8/30/2013

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