Guest Post: The clash of clinical vs. coverage/payment concerns

by Trey La Charité, MD

In the aggressive post-discharge auditing environment where I now find myself practicing medicine, I and my colleagues are subject to heavy scrutiny by CMS and private insurers. Observation versus inpatient status review is the new focus of these non-clinician auditors and has become the reason for the vast majority of my facility’s denials. This new auditing pressure we all face stems from the completely noble idea that reductions in fraud, abuse, and improper payments will preserve resources for those who truly need medical care. Sadly, as with many commendable aspirations, the execution is poor and often produces a dismal result.

As the physician advisor for CDI, I have been diligently educating every physician at my institution about ensuring the medical necessity of our inpatient admissions. But while CMS asserts that the admitting physician is solely responsible for status selection (i.e., inpatient, outpatient, or observation status), admission status for the physician has no clinical  relevance. Physicians do not recognize “conditional” or “partial” admissions, which observation status implies. As far as physicians are concerned, their patients either medically need something or they don’t.

The rules concerning inpatient versus observation status selection are not newly created; CMS’ vague guidelines for
appropriate status selection have been around for years. The difference is that CMS and other payers suddenly discovered that they can extend their existing financial resources by “enforcing” those rules. Payers and their related auditing agents have traditionally avoided the question of whether a patient actually needed the medical care that was provided. Instead, they simply point to inappropriate status selection and deny the associated claim. The issue is whether physicians should be contemplating a patient’s admission status at all.

Editor’s Note: This article is an excerpt from the quarterly publication for ACDIS members the CDI Journal. La Charité, at the time of this article's original release, was a hospitalist and physician advisor for CDI and coding at the University of Tennessee at Knoxville, and an ACDIS Advisory Board member.