Physician Reviewer Training:
Utilization Appeals and HW-DRG Reviews
Sharon Hoffarth, MD, MPH, FACPM
Chief Medical Director
Publication MO-13-06-CR December 2013
This material was prepared by Primaris, the Medicare Quality Improvement Organization for Missouri, under contract with
the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services.
The contents presented do not necessarily reflect CMS policy
Objectives
• Understand the distinctions between observation
and inpatient admissions
• Understand the beneficiary discharge appeals
process
• Understand the basics of higher-weighted DRG (HWDRG) validation reviews
Hospital Admissions:
Inpatient vs. Observation Status
Publication MO-13-06-CR December 2013
This material was prepared by Primaris, the Medicare Quality Improvement Organization for Missouri, under contract with
the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services.
The contents presented do not necessarily reflect CMS policy
The Fundamental Hospital Admission Decision:
Inpatient vs. Observation
• Treatment longer than 24 hours expected
• Outpatient treatment has not been effective
• Inpatient-only procedure necessary
• Continuous monitoring necessary
• Points of Entry for Outpatient Observation
Inpatient Admission Considerations
• Severity of presenting signs and symptoms
• Predictability of the clinical course
• Existence of co-morbid conditions which may
negatively impact course
• Potential for complications
• Services required upon presentation
• Diagnostic procedures available
Inpatient Admission Documentation
• The physician’s admission order should:
-- specify inpatient vs. observation status
-- have the date and time
• Clinical documentation (e.g., in initial note or H&P)
is present to support medical necessity for inpatient
admission
• No “back-dating” is allowed
What are Observation Services?
• Services furnished by a hospital including:
− use of bed
− periodic monitoring by staff
− requires physician order
• Reasonable and necessary
− evaluate outpatient condition
− determine inpatient admission need
Why Observation Services?
• Determines need for inpatient admission
• Rapid response to treatment is expected
• Patient has unusually prolonged recovery period
following an OP procedure
Observation Documentation
• Observation admission order with date and time
• Assessment of patient risk to determine benefit from
observation care
• Timed and signed admission notes, progress notes
and discharge notes
Observation Services Not Reasonable When…
• Services not reasonable or necessary for
diagnosis or treatment of patient
• Services provided for convenience of patient,
family or physician
• Services covered under Part A
• Services that are part of another Part B service
• Standing orders for observation after OP
surgery
• Custodial care
Observation or Inpatient?
Hospitalization
required?
No
No acute
hospital care
Yes
24 hours adequate to
evaluate, treat or
respond?
Yes
Observation
No
Inpatient
Circumvention of PPS (Prospective Payment System)
• Premature discharge (PD)
− Subsequent re-admit to same hospital
• Re-admit
− Care not provided during 1st stay
• Inappropriate transfer
− PPS to PPS-exempt
− PPS-exempt to PPS
Procedure review
• Reasonable?
• Medically necessary?
− If unnecessary, then quality concern?
• Quality appropriate?
Appeals Review
• Two types
− Retrospective
− Concurrent
• Protection for beneficiary
− Determine whether care is covered or not
Retrospective Appeals Review
• Document medical basis for agreement or
disagreement
• Hospital should NOT issue if……
− Patient requires initial or continued care
− Patient requires SNF and no SNF bed available
Concurrent Appeals Review
• Settings for concurrent discharge appeals include:
hospital, skilled care, home health, hospice, outpatient
rehab
• 7 days/wk + holidays
• Hospital overnights or faxes record
• NPR contacts patient/family and hospital
• Immediate PR review (phone)
− Contact Attending Physician
• Voluntary PR schedule for interested PRs to cover
weekends and holidays
Concurrent Appeals Review Continued
• Physician review decision
• Non-Physician Reviewer at Primaris follows up with
hospital, attending physician and patient
− Immediate notification of decision by telephone
− Additional notification is also sent in writing
Reconsideration Reviews
• Second level of review (reconsideration) can be requested
by the beneficiary when the QIO has upheld the discharge
by the provider
• PR must not have been involved previously
• PR must be board certified or board eligible
Important Message from Medicare (IMM)
• Important Message from Medicare (IMM)
− Explains pt’s rights under Medicare
− Expedited QIO review when hospital or MA plan
determines acute care no longer necessary
• Given to pt TWICE during stay
− Upon admission (or w/in 48h of admit)
− No fewer than 48h prior to D/C
• Instructs how patient can contact QIO if disagrees with
discharge
Discharge Appeal -- Hospital and Concurrent:
QIO Internal Process
• Accepts requests for review 24/7
• Provider must supply the medical record documentation
as requested by the QIO
• QIO Non-Physician Reviewer who is working the case
solicits additional input from
− The Patient or her representative
− Provider
− Medicare Advantage plan as applicable
− Attending physician (depending on the Physician
Reviewer’s preference)
Discharge Appeal -- Hospital and Concurrent:
QIO Internal Process (continued)
• QIO must:
− Verify appropriateness and comprehensiveness of
Discharge Planning
− Complete review within 24 hours
− Notify beneficiary or representative immediately upon
completion of review
All Discharge Appeals Reviews –
Physician Reviewer Responsibilities
• Based upon medical necessity of continued acute care
• At the time of facility intent to discharge and issuance of
the notice of non-coverage, did patient still require acute
care services?
− If NOT, then agree with the discharge
− If acute care is still required, disagree with the discharge
• Most importantly, the PR’s review must document the
medical basis for agreement or disagreement with the
discharge with a detailed rationale to support his
decision
All Discharge Appeals Reviews –
Physician Reviewer Responsibilities (continued)
• The Physician Reviewer provides his decision to the
Primaris NPR
− Verbal or fax (your choice)
− No e-mail
− E-mail is not secure
• NPR will send
− Copy of decision for signature
− Invoice voucher for reimbursement
Concurrent Discharge Appeals Decisions:-Financial Liability for the Patient
• QIO agrees with the provider’s decision to discharge the
patient
− Patient is financially liable if he chooses to stay
− Patient can request a Reconsideration
• QIO disagrees with the planned discharge
− Patient is not financially liable and can stay in acute care
− If QIO reverses the initial appeals decision (agreeing with
the discharge) the patient is not financially liable for
medical costs incurred during the reconsideration
Higher-Weighted Diagnosis Related Group
Reviews (HW-DRG)
Publication MO-13-06-CR December 2013
This material was prepared by Primaris, the Medicare Quality Improvement Organization for Missouri, under contract with
the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services.
The contents presented do not necessarily reflect CMS policy
Principles of HW-DRG Review
• Source of information:
-- The provider’s claim for services provided to a
beneficiary
-- The Medical Record
• Appropriate designation of the Principal Diagnosis
• Addition/Deletion of Secondary Diagnoses
• Confirmation of Procedures
HW-DRG Reviews – Medicare Definitions of
Principal and Secondary Diagnoses
• Principal Diagnosis: “The condition that, after
study, is determined to have occasioned the
admission of the patient to the hospital for
care.”
• Secondary Diagnosis/Additional conditions
affecting patient care
− Clinical evaluation
− Diagnostic procedures
− Increased nursing care/monitoring
− Therapeutic Tx
− Extended LOS
HW-DRG Reviews –
Physician Reviewer’s Responsibilities
• Examine all available medical record information
− H&P
− Physician notes
− Hospital course
− Evaluation (lab, X-rays, etc.)
− Treatment
− Consultations
− Discharge summary
• Evaluate the information from a Clinical Perspective
− NOT expected to code
HW-DRG Reviews –
Common Coding Guidelines
• NPR will ask specific question
• Guidelines assist in PR determination
• Use applicable clinical judgment
For questions and additional information, call
Rita Ketterlin at 1-800-735-6776, ext. 153