By Patricia Dear

Indentifying status correctly is not necessarily easy.

It is difficult to get this process right. And it is extremely important to get the status correct and documented sufficiently, in order to protect reimbursements from RAC (and other types of) auditors and consequent recoupment.

Again, it bears repeating, we are discussing "contractual" language, not "clinical" language, because that is what a RAC cares about - or at least, that's what they focused on during the Demonstration, and they have identified the documentation of medical necessity pertaining to status designations as a significant focus of the permanent RAC program that is now in full swing in some states.

Inpatient Status According to CMS

In a later article, we will focus on what the CMS definition is for observation and outpatient status. In this one, however, we want to give you a sense of what the CMS definition is of an inpatient. For that, we quote directly from their manual:

"An inpatient is a person who has been admitted to a hospital for bed occupancy for purpose of receiving inpatient hospital services. Generally a patient is considered an inpatient if formally admitted as an inpatient with the expectation that he or she will remain at least overnight and occupy a bed, even though it may later develop that the patient can be discharged or transferred to another hospital and not actually use that hospital bed overnight. The decision to admit a patient to a hospital is a complex medical judgment which can be made only after a physician has considered a number of factors, including the patient's medical history and current medical needs."

As you read that, you might see where some of the confusion comes from, when trying to understand this from the clinicians' perspective, as it relates to defining "medical necessity" for the purposes of CMS payment. So, now you can see the difficulty in proper case assignment of the inpatient or outpatient status.

This is the hallmark of understanding why information, education, and providing detailed support to the physicians in making these status assignments is so important, and why we have said it is critical for getting reimbursed and then keeping that reimbursement.

What Needs to Happen

The keys, again, are two considerations: (1) the status must meet established criteria, according to whatever criteria the facility is currently using to correctly identify an inpatient admission, and (2) the documentation must clearly and sufficiently support the inpatient admission criteria, as noted by the admitting or primary care physician.

To protect reimbursements from audits, these are some things that must be clearly reported in documentation:

• A clearly worded order to place in and discharge from inpatient status;

• The physician did oversee and document, in admission, progress and discharge notes, the care of the patient while an inpatient;

• The physician did use appropriate criteria to determine that the patient would benefit from inpatient status and care.

The above is not an exhaustive list of what needs to be documented, of course. We are only concerned, here, with contractual language, as it pertains to reimbursements.