By: Patricia Dear, RN

"The Devil is in the details," as quoted by U.S. Navy Admiral Hyman G. Rickover (1900-1986) refers to a "catch" that often is hidden in the details.

A possible interpretation of this concept is that many things that initially seem straightforward on the surface instead may present potential difficulties, problems and obstacles when later trying to implement or execute a plan.

The adage also seems to suggest that fine details could have a detrimental affect on a bigger picture. Hmmmm.............. I have been working in healthcare, as a nurse originally, and now in the compliance, medical coding, reimbursement and legal arena, for more than 30 years. Details in healthcare always have mattered, however with recent increased emphasis on medical necessity for clinical and payment purposes and on specificity for coding, billing and payment accuracy purposes, the devil is TRULY in the details.

Let's start with the place ALL healthcare services start, with a patient and a physician. It is crucial to understand that hospital and all other traditional healthcare services commence with the interaction between these two entities. For any service to be considered, delivered, coded and billed, it will be ordered by the physician. Hospitals' ambulatory/outpatient services (et al) cannot be delivered without a physician ORDER. These healthcare entities support the physicians' decisions with the provision of services, and are dependant upon the patient/physician interaction to get involved in the requisite services.

Why You Need to Keep Reading

OK, does that sound so basic that you might think, "why waste time reading the rest of this article?" If it does, you missed the point and likely will encounter the devil in the details I discuss below, which under the RACs (and other reviewers) might  place your organization in a negative and potentially divisive relationship with your physician community.

Defining Some Terms

Throughout this article, when we use the term "hospital," we mean all different kinds of facilities (hospitals, SNFs, HHAs, etc.);  the term "physician" or "physician community" here is used to reference practitioners who write/place orders for healthcare services.  Elsewhere, the term "provider" or "healthcare provider" often references both "hospitals" (facilities) and "physicians" (those who write orders for services). As you will see below, some sources, such as the ICD-9 Guidelines, use the term "provider" (a term used throughout the text) to mean "a physician or any qualified health care practitioner who are legally accountable for establishing the patient's diagnosis."

CMS' RACs, Medical Necessity and Status Designations

Any discussion of the RACs these days likely will include the topic of medical necessity and/or status designation, i.e. inpatient, outpatient, and observation. However, is observation really a "status," or is it a "service" performed under outpatient status?

CMS defines it as ... well, decide for yourself:

• Inpatient (CMS Medicare Benefit Policy Manual, Chapter 1, §10):

"An inpatient is a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services. Generally, a patient is considered an inpatient if formally admitted as inpatient with the expectation that he or she will remain at least overnight and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight."

• Observation Status: "Observation services are those services furnished by a hospital on the hospital's premises, including use of a bed and at least periodic monitoring by a hospital's nursing or other staff which are reasonable and necessary to evaluate an outpatient's condition or determine the need for a possible admission to the hospital as an inpatient. (For information on outpatient observation status, refer to section 20.6 of this chapter and to the Medicare Claims Processing Manual, Pub.100-04, chapter 4, section 290, "Outpatient Observation Services.")

• Outpatient: A hospital outpatient is a person who has not been admitted by the hospital as an inpatient but is registered on the hospital records as an outpatient and receives services (rather than supplies alone) from the hospital or CAH. Where the hospital uses the category "day patient," i.e., an individual who receives hospital services during the day and is not expected to be lodged in the hospital at midnight, the individual is considered an outpatient.

Hmmm - seems clear as mud perhaps, hence the "devilish" details? How can healthcare providers look to their physician communities and expect (require?) them to provide the details to support downstream services provided when oversight regulatory agencies such as CMS or RACs use such vague language?

Who, Then, Is Responsible?

My point in this article is to re-alert hospitals and all other healthcare providers of what long has been our reality:

Ultimately the responsibility to assure claim payment accuracy for rendered services belongs with the provider who files the claim!

Accountability for documentation to support medical necessity for payment purposes belongs to the provider who files for reimbursement, and looking to your physician community to know the rules and follow the rules is not only appropriate, but crucial. There is no escaping this!