CMS Considers Changing its Policy Regarding the Services That can be Rebilled to Medicare Part B

In the recently issued Hospital Outpatient Prospective Payment System (OPPS) Proposed Rule for 2013, CMS is soliciting comments regarding policy changes that could be made on the issue of inpatient versus outpatient admission. (To view the CMS factsheet please click here.) CMS is seeking comments on potential changes which could provide some clarity for providers and hospitals regarding inpatient versus outpatient status for purposes of Medicare payment. Comments are due by September 4, 2012.

Currently, when a patient presents to the hospital in a short-stay case, the hospital must decide whether to admit the patient as an inpatient or treat him/her as an outpatient. This decision is not always clear in light of existing Medicare guidance, and the wrong choice can have severe repercussions for the hospital. If the provider orders an inpatient stay, and later, the Recovery Audit Contract (RAC) concludes that the care should have been provided at an outpatient level, the care is deemed not medically reasonable and necessary. Under the current system for reimbursement, the hospital is not reimbursed under Part B for the outpatient services provided unless the hospital undertakes an appeal of the claim denial and is successful before an Administrative Law Judge (ALJ).

Hospitals, in an effort to mitigate costs, err on the side of outpatient care. CMS notes that this practice has doubled in the last four years and that it has a detrimental effect on Medicare beneficiaries.

If you have any questions about inpatient short stay appeals or other RAC audit-related issues, please contact an experienced healthcare attorney at Wachler & Associates at 248-544-0888.