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Making sure your patients stay admitted
How to make your case for inpatient vs. outpatient status

Keywords: ICD-9 coding and documentation: how to make the case for inpatient status


by Kristy Welker, CPC



Published in the July 2010 issue of Today's Hospitalist

YOU PUT PLENTY OF THOUGHT into making a diagnosis, including weighing potential risk factors and considering comorbidities. But if you’re not documenting the ins and outs of that thought process, you may not be doing enough to establish the medical necessity of an admission.

To receive the reimbursement you’re due—and to be a good partner with your hospital—documentation can make all the difference. And making sure you document everything you’re thinking is now more important than ever.

Medicare, recovery audit contractors and quality improvement organizations are just a few of the
The decision to admit to observation must be made prospectively, not retrospectively.

entities scrutinizing whether a hospital admission is appropriate— or if a billed admission should have instead been observation or outpatient status.

At stake is not just having an admission downcoded or denied. Instead, a post-payment audit review could include repayment with interest.

Admission criteria
For many years now, most hospitals (and the Centers for Medicare and Medicaid Services) have relied on McKesson’s InterQual criteria to determine whether a patient qualifies for observation or admission. An admission must meet criteria for both severity of illness and intensity of service.

If a retrospective review finds that a patient’s condition doesn’t meet inpatient criteria, that patient’s status will have to be changed to outpatient. While that sounds straightforward, it’s not so simple.

Some hospitalists mistakenly believe that in such a situation, they can change patients’ status to observation. But you can use observation codes for physician services only if the chart includes a physician order for observation. In other words, the decision to admit to observation status must be made prospectively, not retrospectively.

Reimbursement for observation codes (99218- 99220, 99234-99236) is comparable to initial visit codes (99221-99223). But observation services begin with the time documented in the medical record, in accordance with a physician’s order. If your admission has to be re-categorized, the record won’t reflect an order to support billing with observation codes.

A serious drop in RVUs
That leaves you stuck using office or other outpatient visit codes (99201-99215) for patients who don’t really meet inpatient criteria. These codes are broken down into two categories: new and established patient. The new patient codes (99201-99205) apply only if you or a member of your group has not seen that patient within the last three years.

In addition to the hassle of having to change all your billing codes, outpatient codes have much lower relative value units (RVUs) than admission codes, especially when patients fall in the established patient category (99211-99215).

Here’s a look at the drop in RVU values between initial inpatient and outpatient visits. (I’m using the highest level code within each set for simplicity.)




Documenting the full picture
So what can you do to ensure that admitted patients actually maintain their inpatient status? The key is to document a full picture of their severity of illness, as well as the medical need for your intensity of service.

Start with the history of present illness. Justify the need for admission by giving a detailed description of the severity of signs and symptoms, other complicating factors and clinical manifestations.

Become very familiar with accepted classification systems that allow you to choose within a severity range. And as was pointed out in this column in October 2009, make regular use of adjectives—mild, moderate, severe, critical; controlled, uncontrolled—to paint as nuanced a picture as possible of illness severity and care complexity.

The same is true when documenting patients’ past and social history. Detail comorbidities and describe social conditions that put patients at risk from their present condition if they’re not admitted. For instance, a patient with mild pneumonia who also has a history of renal failure may have a significant problem in terms of administering medications or managing renal issues. Documenting the history of that renal failure helps explain illness complexity—and the need for admission.

Remember that the AMA’s Current Procedural Terminology defines decision-making according to the following three elements:

  • the number of diagnoses and management options that must be considered;
  • the amount and/or complexity of medical records, diagnostic tests, and/or other information that must be obtained, reviewed, and analyzed; and
  • the risk of significant complications and/or mortality, as well as comorbidities associated with the presenting problems, diagnostic procedures, and/or possible management options.

Go back to the basics of this definition and outline each element individually in your documentation to accurately reflect and support the complexity of your decisions and treatment plan. Also include reasons why it might not be safe to discharge a patient, particularly when patients have significant physical disorders or neurological dysfunction.

And get in the habit of working closely with members of utilization management. Some hospitals are bringing utilization management personnel into the admission decision from the beginning to minimize patient re-categorizations. This will allow you to admit to inpatient status with confidence or to appropriately admit patients to observation instead.

Kristy Welker is an independent medical coding consultant based in San Diego. Email your documentation and coding questions to her at kristywelker@hotmail.com. We’ll try to answer your questions in a future issue of Today’s Hospitalist.
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