Regulatory Bulletins

Bulletin 05 – COVID-19

COVID-19-Related Considerations When Determining Medicare & Medicare Advantage Admission Status

1. Public Health Emergency Declarations

As utilization review and compliance experts within your hospitals, it is imperative that you understand the impact that waivers authorized by the Health and Human Services (HHS) Secretary have upon your determinations of hospital admission status.

When the President declares a disaster or emergency under the Stafford Act or National Emergencies Act and the HHS Secretary declares a public health emergency under Section 319 of the Public Health Service Act [as both have done on March 13, 2020, and January 31, 2020, respectively] the Secretary is authorized to take certain actions in addition to her regular authorities…For example, under section 1135 of the Social Security Act, she [the Secretary] may temporarily waive or modify certain Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) requirements…to meet the needs of individuals enrolled in Social Security Act programs…

Source: 1135 Waivers At A Glance, retrieved from: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertEmergPrep/Downloads/1135-Waivers-At-A-Glance.pdf

Current blanket waivers approved are included in the March 13, 2020, COVID-19 Emergency Declaration Health Care Providers Fact Sheet, available here: https://www.cms.gov/files/document/covid19-emergency-declaration-health-care-providers-fact-sheet.pdf

2. The Utilization Review Standards of the Conditions of Participation Have Not Changed

The current waivers issued by the Secretary do not include any changes to the requirements for utilization review under the Conditions of Participation (COPs) at 42CFR482.30. A hospital utilization review committee must continue its functions to determine the medical necessity of admissions or continued stays, extended stays, and professional services. While blanket and case-by-case 1135 waivers may release requirements under the COPs, the Secretary has not issued any waivers that impact utilization review under the COPs as of this date.

3. Two-Midnight Rule Guidance Still Applies

There have been no waiver changes to the regulatory and sub-regulatory guidance provided by  “Under the 2-Midnight Rule, an inpatient admission is generally appropriate for Medicare Part A payment if the physician (or other qualified practitioner) admits the patient as an inpatient based upon the expectation that the patient will need hospital care that crosses at least 2 midnights.”

Source: 2016 OPPS (Final Rule CMS 1633-FC; CMS 1607-F2) 70298, Federal Register/Vol. 80, No. 219/Friday, November 13, 2015/Rules and Regulations

4.  Hospital Location Does Not Impact Admission Status

“CMS is waiving requirements to allow acute care hospitals to house acute care inpatients in excluded distinct part units, where the distinct part unit’s beds are appropriate for acute care inpatient.  The Inpatient Prospective Payment System (IPPS) hospital should bill for the care and annotate the patient’s medical record to indicate the patient is an acute care inpatient being housed in the excluded unit because of capacity issues related to the disaster or emergency.”

Source: March 13, 2020, COVID-19 Emergency Declaration Health Care Providers Fact Sheet, CMS.gov, retrieved from: https://www.cms.gov/files/document/covid19-emergency-declaration-health-care-providers-fact-sheet.pdf

Thus, CMS is permitting hospital inpatients to be in any location in the hospital, as long as that location in the hospital can support the provision of hospital services and the medical record supports that the beneficiary is an inpatient. Thus, inpatients can be housed in locations such as post anesthesia recovery units, stand up units in the parking lot or other buildings, and inpatient psychiatric and rehabilitation units. As well, inpatient psychiatric and rehabilitation patients can receive hospital services in any hospital bed as long as the services can be provided in the hospital bed.

“CMS is waiving [requirements] to allow acute care hospitals with excluded distinct part inpatient psychiatric units that, as a result of a disaster or emergency, need to relocate inpatients from the excluded distinct part psychiatric unit to an acute care bed and unit. The hospital should continue to bill for inpatient psychiatric services under the Inpatient Psychiatric Facility Prospective Payment System for such patients and annotate the medical record to indicate the patient is a psychiatric inpatient being cared for in an acute care bed because of capacity or other exigent circumstances…This waiver may be utilized where the hospital’s acute care beds are appropriate for psychiatric patients and the staff and environment are conducive to safe care. For psychiatric patients, this includes assessment of the acute care bed and unit location to ensure those patients at risk of harm to self and others are safely cared for.”

Source: March 13,2020, COVID-19 Emergency Declaration Health Care Providers Fact Sheet, CMS.gov, retrieved from: https://www.cms.gov/files/document/covid19-emergency-declaration-health-care-providers-fact-sheet.pdf

“CMS is waiving requirements to allow acute care hospitals with excluded distinct part inpatient rehabilitation units that, as a result of a disaster or emergency, need to relocate inpatients from the excluded distinct part rehabilitation unit to an acute care bed and unit. The hospital should continue to bill for inpatient rehabilitation services under the inpatient rehabilitation facility prospective payment system for such patients and annotate the medical record to indicate the patient is a rehabilitation inpatient being cared for in an acute care bed because of capacity or other exigent circumstances related to the disaster or emergency. This waiver may be utilized where the hospital’s acute care beds are appropriate for providing care to rehabilitation patients and such patients continue to receive intensive rehabilitation services.”

Source: March 13,2020, COVID-19 Emergency Declaration Health Care Providers Fact Sheet, CMS.gov, retrieved from: https://www.cms.gov/files/document/covid19-emergency-declaration-health-care-providers-fact-sheet.pdf

5.  What Admission Status Should Be Assigned to Days When a Beneficiary is in Hospital Quarantine?

“If a Medicare beneficiary is a hospital inpatient for medically necessary care, Medicare will pay hospitals the diagnosis-related group (DRG) rate and any cost outliers for the entire stay, including any the quarantine time when the patient does not meet the need for acute inpatient care, until the Medicare patient is discharged. The DRG rate (and cost outliers as applicable) includes the payments for when a patient needs to be isolated or quarantined in a private room.”

Source: March 5, 2020, Coverage and Payment Related to COVID-19 Fact Sheet, CMS.gov, retrieved from: https://www.cms.gov/files/document/03052020-medicare-covid-19-fact-sheet.pdf

Days in which a beneficiary receives hospital quarantine services are days in which hospital care is being delivered (otherwise, the beneficiary may be discharged to home). Therefore, as long as medically necessary hospital services (which include appropriate quarantine services) are being delivered and there is no delay due to beneficiary or provider convenience, days in hospital quarantine should be included in determining the number of midnights which have transpired for purposes of determining Medicare admission status.

6.  Ensure Correct and Complete Evaluation of the CMS Exception For Mechanical Ventilation

“While CMS believes a physician will generally expect beneficiaries with newly initiated mechanical ventilation to require 2 or more midnights of hospital care, if the physician expects that the beneficiary will only require one midnight of hospital care, but still orders inpatient admission, Part A payment is nonetheless generally appropriate.”

Source: Medicare Program Integrity Manual, Chpt. 6.5 – Medical Review of Inpatient Hospital Claims for Part A Payment (Rev. 716, Issued: 05-12-17, Effective: 06-13-17, Implementation: 06-13-17)

In the September 2013 OIG Review of Mechanical Ventilation, “Mechanical ventilation” is defined as “the use of a mechanical device to inflate and deflate the lungs. Mechanical ventilation provides the force needed to deliver air to the lungs in a patient whose ability to breathe is diminished or lost.” Source: OIG September 2013 Report: Medicare Payments for Inpatient Claims with Mechanical Ventilation (A-09-12-02066) Page 2

Mechanical ventilation can be provided in both a non-invasive fashion, involving various types of facemasks, such as continuous positive airway pressure (CPAP) and bi-level positive airway pressure (BiPAP), and in an invasive fashion, involving endotracheal intubation and ventilator support.

Source: The Merck Manual, retrieved from: https://www.merckmanuals.com/professional/critical-care-medicine/respiratory-failure-and-mechanical-ventilation/overview-of-mechanical-ventilation

Thus, it is imperative to ensure that utilization review processes are in place to avoid incorrectly assigning outpatient admission status to beneficiaries receiving newly initiated mechanical ventilation, which includes BiPAP, CPAP and intubation and ventilation, during hospital stays of less than two midnights.

7.  The Three-Day Qualifying Stay Requirement for Coverage of SNF Benefits Has Been Removed

“CMS is waiving the requirement at Section 1812(f) of the Social Security Act for a 3-day prior hospitalization for coverage of a skilled nursing facility (SNF) stay [to] provide temporary emergency coverage of SNF services without a qualifying hospital stay, for those people who need to be transferred as a result of the effect of a disaster or emergency. In addition, for certain beneficiaries who recently exhausted their SNF benefits, it authorizes renewed SNF coverage without first having to start a new benefit period.”

Source: March 13, 2020, COVID-19 Emergency Declaration Health Care Providers Fact Sheet, CMS.gov, retrieved from: https://www.cms.gov/files/document/covid19-emergency-declaration-health-care-providers-fact-sheet.pdf

“In this way, beneficiaries who may have been discharged from a hospital early to make room for more seriously ill patients will be eligible for Medicare Part A SNF benefits. In addition, beneficiaries who had not been in a hospital or SNF prior to being evacuated, but who need skilled nursing care as a result of the emergency, will be eligible for Medicare Part A SNF coverage without having to meet the 3-day qualifying hospital stay requirement.”

Source: 1135 Waivers At A Glance, retrieved from: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertEmergPrep/Downloads/1135-Waivers-At-A-Glance.pdf

8. What Admission Status Should Be Assigned to Days When a Beneficiary is Awaiting Placement in a SNF?

“Question: Will a hospital be eligible for additional payment for rendering services to patients that remain in the hospital in the case where they continue to need medical care but at less than an acute level and those services are unavailable at any area SNFs because of an emergency, including the COVID-19 infection?

Answer: A physician may certify or recertify the need for continued hospitalization if the physician finds that the patient could receive proper treatment in a SNF, but no bed is available in a participating SNF. Medicare will pay the DRG rate and any cost outliers for the entire stay until the Medicare patient can be moved to an appropriate facility.”

Source: March 6, 2020, Press Release: CMS Issues Frequently Asked Questions to Assist Medicare Providers, CMS.gov, retrieved from: https://www.cms.gov/newsroom/press-releases/covid-19-response-news-alert-cms-issues-frequently-asked-questions-assist-medicare-providers

Thus, if a beneficiary is statused as an inpatient, additional days awaiting SNF placement should be certified by the physician as inpatient days and are payable under the DRG construct. This guidance is a reiteration of previous regulatory and Manual direction provided by CMS:

“If the reason an inpatient is still in the hospital is that they are waiting for availability of a skilled nursing facility (SNF) bed, the regulations at 42 CFR 424.13(c) and 424.14(e) provide that a beneficiary who is already appropriately an inpatient can be kept in the hospital as an inpatient if the only reason they remain in the hospital is they are waiting for a post-acute SNF bed. The physician may certify the need for continued inpatient admission on this basis.”

Source: Medicare Benefit Policy Manual, Chpt. 1, Sec. 10.2.A.1.b (Rev. 234, Issued: 03-10-17, Effective: 01-01-16, Implementation: 06-12-17)

Keep in mind, days awaiting SNF placement are days in which hospital care is being delivered (otherwise, SNF wouldn’t be necessary). Therefore, as long as medically necessary hospital services are being delivered and there is no delay in pursuing SNF services due to beneficiary or provider convenience, days pursuing SNF placement should be included in determining the number of midnights which have transpired for purposes of determining Medicare admission status.

9. Medicare Parts A, C & D Appeal Requirements Have Been Relaxed

Although the detail has not yet been provided, CMS has stated that it will provide extension for the filing of Medicare Parts A, C and D appeals, specifically:

    • “Extension to file an appeal
    • Waive timeliness for requests for additional information to adjudicate the appeal
    • Processing the appeal even with incomplete Appointment of Representation forms but communicating only to the beneficiary
    • Process requests for appeal that don’t meet the required elements using information that is available
    • Utilizing all flexibilities available in the appeal process as if good cause requirements are satisfied”

Source: March 13, 2020, COVID-19 Emergency Declaration Health Care Providers Fact Sheet, CMS.gov, retrieved from: https://www.cms.gov/files/document/covid19-emergency-declaration-health-care-providers-fact-sheet.pdf

Hopefully, further detail will be forthcoming from CMS regarding waivers of appeal processes.

10. Medicare Advantage Payers Are Required to Provide Access to the Same Medicare Benefits

Medicare Advantage payers may not have a basic benefit structure for a plan that is more restrictive than traditional Medicare.  As stated in the Medicare Managed Care Manual, every MA plan:

 “Must make determinations based on: (1) the medical necessity of plan-covered services – including emergency, urgent care and post-stabilization – based on internal policies (including coverage criteria no more restrictive than original Medicare’s national and local coverage policies)…” [bold added by author]

Source: Medicare Managed Care Manual language, Chpt. 4, Sec. 10.16 – Medical Necessity (Rev. 121, Issued: 04-22-16, Effective: 04-22-16, Implementation: 04-22-16)

The Provider-Payer contract exists to manage negotiated reimbursement rates but cannot alter the basic benefit structure and definitions outlined by Medicare. For the Medicare population, CMS has stated that the 2-Midnight Rule is the guidance for determining whether Part A payment is appropriate. If a Medicare Advantage patient is in a hospital bed receiving hospital services across two midnights or more, s/he is appropriate for inpatient admission status regardless of “intensity of service,” “severity of illness,” or “level of care.”

Specifically, as it relates to bed availability for SNF placement, utilization management principles require that the availability of resources in the outpatient setting be considered in determining whether services could be provided in an alternative setting. If the reason a beneficiary is still in the hospital is that s/he is waiting for availability of a SNF placement, the physician should certify the need for continued inpatient admission on this basis. The Medicare Advantage payer may attempt to downgrade or deny reimbursement for these days. However, providers should appeal those denials as payers are responsible for having an adequate network, including an adequate network of SNF beds. It is not appropriate for a payer to deny payment based on placement or alternative level of care when a receiving bed is not available. Again, the Managed Medicare payer contract does NOT supersede and can not alter the basic Medicare benefit definitions (unless the benefit provided by the payer is greater than that of traditional Medicare). Rather, the contract may only set the reimbursement for the already defined (by regulation) minimum Medicare benefit. Payer “clinical” policies, such as mandating the use of commercial utilization review screening criteria for determining admission status, negatively change the definition of the Medicare inpatient benefit and violate the guidance provided by CMS to use “coverage criteria no more restrictive than original Medicare’s national and local coverage policies.”

Share This: