Transcript Title

Optimization of ED Disposition
Processes
Jeff Wajda DO,MS, FACEP
LYNX Medical Systems – a Picis Company
January 27, 2008
Why the ED Matters
• ED is principal source of key growing service lines
• Acuity is highest during the ED stay. Creates necessity
to address the “medical necessity” of proposed inpatient
service before the patient leaves the ED
• ED is high admission source of high cost admits (1 Day
LOS etc.)
• EP documentation is vague and non-specific; great for
discharged patients but insufficient for inpatient transition
• ED volume and Medicare population are growing
• Increasing regulatory scrutiny of admission decisions.
The ED is in the crosshairs of regulatory efforts designed
to reduce reimbursement
• ED admission disposition and documentation should be
actively managed (The Need for ED Care Management)
©2008, LYNX Medical Systems. All rights reserved.
Why the ED Matters
• 73% of hospital CEOs describe their EDs as not
profitable*
• 98% of hospital leaders identified the ED as necessary.
<1% would close their EDs*
• ED admissions are not elective and are a critical part of
the hospital’s mission*
Source: Deloitte and Touche 2005 CEO Survey
©2008, LYNX Medical Systems. All rights reserved.
Complex Medicare Reimbursement
Rules and More Scrutiny
• Condition Code 44 for inpatient-to-outpatient status
changes
• Increasing payer requests to place patients in Obs status
rather than inpatient status
• ED documentation which may not support intensity of
service criteria supporting inpatient status
• POA coding, MS-DRG’s
• Increasing volume of back end appeals
• Core Measure Improvement
• Upcoming RAC audits focused on “Medical Necessity”
and ED disposition
©2008, LYNX Medical Systems. All rights reserved.
Hospital Operating Performance Does
Not Correlate with Clinical Performance
Risk-Adjusted Mortality Index
Observed vs. Expected Mortality
3. 0
2. 5
2. 0
o
e
_
m 1. 5
o
r
t
1. 0
0. 5
0
Bottom
0
4th
1
3rd
2
R
ank
f or
V
ar i abl e opm
ar gi n
2nd
3
Hospital Quintile by Operating Income
Source: Thomson Reuters Projected Inpatient Database;
100 Top Hospitals® National Study 2007 (FY2005 – 2006 Medicare)
©2008, LYNX Medical Systems. All rights reserved.
Top
4
Observed vs. Expected Complication Index
Risk-Adjusted Complication
Index
5
4
3
o
e
_
c
o
m
p
2
1
0
Bottom
0
4th
1
R
ank f or
3rd
2
2nd
3
V
ar i abl e opm
ar gi n
Hospital Quintile by Operating Income
Source: Thomson Reuters Projected Inpatient Database;
100 Top Hospitals® National Study 2007 (FY2005 – 2006 Medicare)
©2008, LYNX Medical Systems. All rights reserved.
Top
4
Composite Core Measures
Score
Composite Core Measures Performance
100
75
c
m
_
m
e
a
n
_
p
c
t
50
25
0
Bottom
0
4th
3rd
1
2
R
ank f or
2nd
3
V
ar i abl e opm
ar gi n
Hospital Quintile by Operating Margin
Source: Thomson Reuters Projected Inpatient Database;
100 Top Hospitals® National Study 2007 (FY2005 – 2006 Medicare)
©2008, LYNX Medical Systems. All rights reserved.
Top
4
ED Issues Number of Medicare
Beneficiaries, 1970-2040
100
90
86.4
80
78.6
70
61.6
60
50
40
39.7
46.5
34.2
30
20
42.5
28.4
20.4
10
0
1970
1980
1990
2000
2005
2010
Year
Source: Medicare Trustees Report 2006
©2008, LYNX Medical Systems. All rights reserved.
2020
2030
2040
CMS Focus – A Perfect
Storm
Getting it right
©1985-2008 LYNX Medical Systems. All rights reserved.
RAC
RAC Demonstration Project
•
•
•
Three years and three states (CA, NY, FL)
838 Million in take-backs
Largest proportion of take-backs (40%) were
related to medical necessity
• Improper coding was responsible for 35% of takebacks
• Other deficiencies in physician documentation
was responsible for 9% of take-backs
1. Appeals were successful in 4.9% of cases
2. Focus on short stay medical DRG’s as well as
Laparoscopic Cholecystectomy, Pacemaker
placement and Rehabilitation.
ED’s Impact on RAC
• Recovery Audit Contractors (RAC)
retrospectively review medical necessity
• The majority of ED admits are short-stay
• Recovery Audit Contractor (RAC) targets shortstay admits resulting in denials and lost revenue
• Measurement:
- Relative increase in observation status replacing
medical 1 day LOS admits.
Example of annual revenue at risk:
10% of 20,000 admits at RW of 1.0
(2,000) x (1.0) x ($10,000) = $8,400,000
Medical Necessity
What is Physician Intent?
Medicare Benefit Policy - Basic Coverage Rules (PUB. 100-02)
Chapter 1 - Inpatient Hospital Services Covered Under Part A
10 - Covered Inpatient Hospital Services Covered Under Part A
•
•
•
•
The physician or other practitioner responsible for a patient's care at the hospital is
also responsible for deciding whether the patient should be admitted as an inpatient.
Physicians should use a 24-hour period as a benchmark, i.e., they should order
admission for patients who are expected to need hospital care for 24 hours or more,
and treat other patients on an outpatient basis. However, the decision to admit a
patient is a complex medical judgment which can be made only after the physician
has considered a number of factors, including the patient's medical history and
current medical needs, the types of facilities available to inpatients and to outpatients,
the hospital's by-laws and admissions policies, and the relative appropriateness of
treatment in each setting. Factors to be considered when making the decision to
admit include such things as:
The medical predictability of something adverse happening to the patient;
The need for diagnostic studies that appropriately are outpatient services (i.e., their
performance does not ordinarily require the patient to remain at the hospital for 24
hours or more) to assist in assessing whether the patient should be admitted; and
The availability of diagnostic procedures at the time when and at the location where
the patient presents.
Observations Regs
• APC Reg FR 11/30/01 page 59881
Observation is an ACTIVE TREATMENT to
determine if a patients condition is going to
require that he or she be admitted as an
inpatient or if the condition clarifies itself, the
patient may be discharged
• Observation Medicine Medicare Manual section
455
“services which are reasonable and necessary
to evaluate an outpatient condition or determine
need for inpatient care”
Medical Necessity
• Medicare and other payors have taken the position that
medical necessity is implicit in every claim for payment,
and that the physician is expected to know the rules of
medical necessity and abide by them.
• A physician who bills Medicare for services which he
should know are not medically necessary can be
prosecuted for fraud by the OIG. Violators face penalties
of up to $10,000 for each service, an assessment of up
to three times the amount claimed, and exclusion from
federal and state health care programs.
Medical Necessity
• Physician Intent – In a situation where a
patient does not meet payor criteria for
inpatient services, a physician may
document their intentions as to why the
patient needed inpatient services.
Physician Intent: Safety
Physician Intent Issues regarding Safety
(indications that the patient can not be safely discharged to home)
Inability to perform Activities of Daily Living (ADL's)
Inability to tolerate oral hydration
Inability to ambulate secondary to acute medical condition
Homeless status - high probability of life or limb threat as
outpatient diagnostic workup is highly unlikely or impossible
Follow-up status/outpatient evaluation - outpatient resources
are not available to this patient
Functional/Psychiatric Disease/Developmental Delay - patient
currently unable to understand importance of necessary
outpatient testing
Substance Abuse Issues - alcohol abuse or other drug
dependence make it unsafe for the patient to be discharged
Current State vs. Improved:
Quantifying RAC Value
1. Total ED Encounters
2. Likely RAC Results (based on audit findings)
15%
Inpts.
13%
Inpts.
3%
Obs
82%
Outpatients
82%
Outpatients
Avg. Reimbursement
$82,530,000
3. Overcorrection/Reaction
5%
Obs
Avg. Reimbursement
$73,070,000
4. Optimized Disposition – Improved View
11%
Inpts.
82%
Outpatients
14%
Inpts.
80%
Outpatients
Avg. Reimbursement
$68,340,000
6%
Obs
Avg. Reimbursement
$80,750,000
ED’s Impact on MS-DRG
• 745 new severity-adjusted federal DRGs (MS-DRG)
– Adjusted for patient acuity
– Each condition has multiple values based on CCs
• Capturing accurate severity of illness at time of highest
acuity leads to improvement in ED-CMI
• Measurement:
– More accurate ED documentation leads to higher CMI.
– ED CMI is the ED’s contribution to the over all CMI
Example (Annual patients admitted with FUO)
300 Admits with DRG change from 864 to 872
(RW change) x (frequency) x (blended rate) = impact of
correctly documenting sepsis
(0.56) x (300) x ($10,000) = $1,680,000
CMI: Impact and Value
Current State
State –– CMI
CMI for
for ED
ED admissions
admissions
Current
1.7
1.7
1.6
1.6
CMI
1.5
1.5
1.4
1.4
RW Increase x total annual admits x blended rate
.08 x 12,300 x $5,000 = $4,797,000
1.2
1.2
1.1
1.1
1.0
1.0
.7
.7
.82
.78
Current
Current
Improved
Improved
.5
.5
ED’s Impact on POA
• Present on Admission (POA) or Hospital
Acquired Condition (HAC)
• Best time to identify and document POA’s is in
the ED
• Measurement:
Example - annual revenue protection when POA is
captured for decubitus ulcer) :
(DRG RW difference) x (frequency) x (blended rate)
(0.2) x (500) x ($10,000) = $1,000,000
POA Impact
Rate of Admits from ED
POA Capture
100%
80%
70%
60%
capture rate x
avg RW x admits x blended rate
5% x 0.2 x 12,300 x $5,000 = $615,000 Revenue preservation
50%
40%
23%
30%
20%
10%
4%
Current
*improved capture as co-morbid condition
9%
Suspect 50% of SNF
patients (12%) with 1 of
3 POS conditions
*Improved % ED Admits from SNF
from ED
Challenges
•
•
•
•
•
Struggling to make timely and proper disposition decisions
in the ED
− Discharge to home or transfer to SNF
− Assign Observation status
− Inpatient admission
Correct disposition decisions have a direct impact on
revenue, hospital core measures and patient flow
Greater CMS scrutiny of inpatient admissions further
narrows the margin for error
– Increasingly complex to get it right
– Getting it wrong becoming more costly – revenue,
compliance, quality
Severity of illness and intensity of service is underdocumented
Medical Necessity is under-documented
ED Physician Documentation
• Proper ED physician documentation is not generated or
insufficient to support:
– Disposition decision (clinical vs. coding terminology)
– Downstream inpatient coding and DRG assignment
• Misalignment with key stakeholders
– ED physicians are often unaware or unconcerned about
the financial ramifications of their disposition decision and
with how their documentation impacts the hospital
– ED physicians do not have the time or the financial
incentives to modify behavior
Value of Optimized ED Disposition
I.
Protect and minimize revenue at risk from
RAC audits
II. Increase incremental revenue associated
with appropriate DRG capture of ED
admissions
III. Revenue preservation when POA codes
serve as a co-morbid condition
IV. Increase incremental revenue from
enhanced use of observation services
* Examples are based on 80,000 ED visits and 12,300 admissions per year.
Value of Optimized ED
Disposition Management
Key
Revenue Effect of RAC
POA
Effect of RAC over-reaction
CMI
$15M
Annual Revenue Impact
$10M
$5M
0
-$5M
-$10M
-$15M
-$20M
-$25M
Impact of
Optimized
Dispositioning
Current
Profile
CMI
Optimal Profile
Impact of
RAC Risk
POA
Over-reaction
Unmanaged profile
Value of
Disposition
Optimization
Thank you
[email protected]