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Thanks to Dr. Ronald Hirsch (who edited this issue), Stefani Daniels, and HCPRO for publishing “The Hospital Guide to Contemporary Utilization Review,” which is the primary source for this issue. This is not a sponsorship. I genuinely think all providers should read it. Direct quotes are from this source. Use HCCUR15OFF at checkout for a discount. Check it out here: https://hcmarketplace.com/contemporary-utilization-review

This week we hosted our first recorded webinar in the “CDI and Coding Village” on how I teach physicians coding, quality and CDI basics. We’re also discussing:

• How to fight back against AKI denials

• Changes to Watchman (LAAC) coverage codes

• How to get physicians to document brain compression

• Issues around Medicare denying TURBT

• Clarifying confusion with metabolic acidosis (an often-overlooked CC)

• Reviews on oncology nomenclature by our 2nd year medical student

• And much more!

If that interests you, consider joining our online community here: The CDI & Coding Village (skool.com)

Medicare Part A… B… C… D… Is there even a C?

What do they all mean?
And why does it matter to physicians and APPs?

Why It Matters

Understanding the complexities of Medicare is not our (providers) forte. But patients don’t know that, so they ask us about it. We either admit we don’t know or give them an answer we THINK is correct (but often is not).

So, if you take care of Medicare/Medicare Advantage patients, then read on.

What is Medicare?

Don’t laugh. It’s not a silly question.

Briefly, it was signed into law in 1965 by President Lyndon B. Johnson to provide health insurance to almost all Americans aged 65 or older.

Before this, there was a two-way relationship between physicians and patients. The physician decided which care was necessary, and the insurance paid for it. But after Medicare and Medicaid, “… As [they were] responsible for the appropriate use of taxpayer funds, Medicare and Medicaid assumed the right to monitor the reasonableness and appropriateness of the services being provided. Soon after… Insurance companies demanded the same right to monitor services.”

You can see the obvious downstream effects of this. This is why we are now in three-way relationships with patients and insurances (who are “monitoring” services and “preventing fraud” through tactics such as denials and prior authorizations).

Medicare Parts

Medicare Part A: This is “hospital insurance” and covers inpatient hospital care, including inpatient rehab, inpatient psychiatric hospital stays, LTACs, SNF, some health care and hospice.

In trying to remember the different parts, this makes sense to me. Let’s first make sure to cover the catastrophic stuff → Part A.

Medicare Part B: This is outpatient care including ED visits, outpatient surgery, observation stays, outpatient testing, physician professional fees (both inpatient and outpatient), ambulance care, DME, some home healthcare and some medications.

This covers some, but not all, vaccinations while others are covered under Part D.

Medicare Part D: 

D is for drugs (but not completely 100% black and white). This covers prescription drugs but it gets complicated.

Physicians can bill Part B, but they cannot bill directly for Part D. This is typically done through an intermediary. Why does this matter? Because while some vaccines, such as influenza and pneumococcal vaccines, can be billed by physicians under Part B, others such as Shingles, Hepatitis B in low-risk patients, and Tdap are covered by Part D. So physicians can’t bill directly for these services.

Clear as mud, right?

I’m not going to go into much detail on that, but I include it here just to show how complicated these things get.

Medicare Part C

Why did I go out of order?

Because A (Hospital) → B (Outpatient) → D (Drugs) makes sense to me.

Part C is good ol’ Medicare Advantage. You see, the government really doesn’t like to get involved in the nitty gritty details of administering services. Even the Saturn V rocket that delivered astronauts to the moon wasn’t built by NASA. It was built by private companies with whom the government contracted.

So, the government likes the idea of contracting with private companies to “deliver” Medicare - This is Medicare Advantage. If not, it’s Traditional Medicare. So, yes, you’re reading that correctly. MA plans are:

• Supposed to be replacing Traditional Medicare

• Supposed to be providing access that is equal to or better than Traditional Medicare

• Supposed to be providing access to benefits that a patient would receive otherwise through Traditional Medicare, without limitation.

👆️ Same thing said three different ways. If you’ve ever dealt with MA plans, I’m sure you’re picking up what I’m putting down.

BUT:

Because they’re private companies, those companies can limit the providers that provide that care. And while Medicare is national, Medicare Advantage plans are typically community based, so you’ll be limited locally. Their ability to choose providers + the local (versus national) component is how we end up with “out of network” versus “in network.” AND because they reserve the right to “monitor for fraud” and “monitor the appropriateness of spending tax dollars,” they get to review if they should be paying for services such as skilled nursing facility care or inpatient rehab care.

Safe to say we’re not going to the moon with MA plans.

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Traditional Medicare & The 2-Midnight Rule

All roads lead to Rome, and for our purpose all discussions of Medicare parts and MA plans seem to lead to inpatient versus outpatient and the two-midnight rule.

What’s the two-midnight rule?

The government rarely keeps things simple, but in this case, CMS tried to keep things simple by creating the two-midnight rule stating that “a physician should admit a patient as inpatient if he or she determines that the patient requires hospital care, and the length of stay is expected to extend over two midnights.”

When the physician expects two midnights and admits as inpatient, that’s called the “two midnight presumption.”

When the patient actually stays in the hospital two midnights, that’s the “two midnight benchmark.”

(These will be important later.)

But why does inpatient versus observation matter? It all goes back to the Medicare parts and how they’re funded.

Remember:
Part A → Hospital Care.
Part B → Outpatient Care.
Inpatient = Hospital Care
Obs = Outpatient Care.

“Part A is funded by payroll taxes while Part B is supported by funds authorized by Congress and premiums paid by enrollees.” Two separate buckets of money. Inpatient versus Obs determines which bucket to dip into.

Okay. Makes sense. But why do we still have to deal with inpatient versus obs for Medicare Advantage plans?

Great question.

MA plans replace BOTH Parts A and B, and they’re paid out monthly (per patient) by CMS. So, that’s ONE large money bucket. NOT two.

So inpatient vs observation for MA plans is made up?
Yep.
Completely artificial.
Unnecessary except for financial reasons.

But this is why you’re asked to document on admit that you expect the patient to require two midnights of medically necessary care, and why you’re asked to document if the patient “responded to therapy faster than expected” if they were discharged prior to two midnights after being admitted as an inpatient.

Medicare Advantage & The 2-Midnight Rule

If you’re sensing in your bones that I’m making it out to be simpler than it is, then your bones aren’t lying.

Before January 1, 2024, MA plans were not following the 2-midnight rule. But since then… Well… They’re still not. But they’re supposed to. Before, they were using internal criteria, such as MCG or InterQual, to determine inpatient versus obs. But although CMS’s final rule in 2023 clarified that they do indeed have to follow the two-midnight benchmark (when the patient actually stays two midnights), they did not have to follow the two-midnight presumption (when the physician predicts two midnights). Also, MA plans still reserved the right to audit cases for medical necessity. And boy have they. This is the main loophole they’ve been exploiting to get around the two-midnight rule.

If you’re an inpatient physician who battles MA plans with peer-to-peer calls, you MUST familiarize yourself with that CMS final rule and read as many articles as you can on this topic because MA plan medical directors WILL try to intentionally confuse you on peer-to-peer calls.

Not the most optimistic of newsletters, but I hope it was helpful!

That’s all for now.

Cheers,

Robert

Thanks to Laura Samson, RN BSN CCDS, and my wife Kara (for grammar) for editing this newsletter!

When you’re ready, there are 3 ways I can help you:

1. Join our CDI and Coding Village online community! It’s impossible to know it all, it takes a village! What you’ll get:

• Learn from me and other experienced professionals (perfect for new coders / CDI’s and those pivoting their career)

• Participate in monthly interactive webinars hosted by me, weekly 1 minute CDI quick tip videos, and anatomy and physiology reviews not found anywhere else

• Share ideas & solutions to new problems with peers in real-time discussions

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• Stop underbilling your hard work & MASTER the new billing rules

• Get 3.5 hours of CME credit! (Use your CME funds!)

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• Use notes to PREVENT getting sued

3. Check out The Resident Guide to Clinical Documentation video course. The course that helps you:

• Impress your attendings and improve your evaluations.

• Prepare for real-world productivity pressures

• Gain the confidence to write shorter yet more effective notes.

• Use notes to make you a better, more prepared physician

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