Appeal type: Inpatient Hospital
Decision: Unfavorable

We decided that the Plan does not have to pay for the services provided to the enrollee on August 22, 2018.
You asked the Plan to pay for the services. You say that the inpatient services should be paid. The Plan denied your request. The Plan says the order is for observation and not inpatient.
The Plan must follow Medicare rules. We looked at the file and Medicare rules. Based on this information, we decided that Medicare rules for coverage of the services have not been met. This claim was submitted as an inpatient hospital stay; however, the medical records received did not contain a valid inpatient physician order, the order is for observation or was changed from inpatient to observation level of care. Of note, in accordance with the CMS standards, a valid inpatient admission order is required for all inpatient admission services to be eligible for Medicare payment. Reviewed clinical information available. This case involves incorrect billing as an INPATIENT stay when the orders state Admit to OBSERVATION. Briefly, this is a 44 year-old Male with a 1 day stay. He was admitted from ED for Chest pain. Despite request for complete medical records, no medical documentation of stay was received, only submitted the physician orders. The physician order clearly states admit to OBSERVATION. In reviewing the claims submitted by the admitting physician, the code 99235 Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date was billed which appears to be the correct code as this was indeed an admission and discharge on the same date. The admit status described by this code could be either OBSERVATION or INPATIENT. The key issue is the billing by the facility. The Bill Type submitted was 111 which corresponds to Hospital Inpatient Stay. Additionally, one of the Revenue Codes billed was 214 which corresponds to Coronary Care Unit. There is certainly no Orders in the records submitted which describe the patient as Admitted to Inpatient Status or Admit to CCU. In summary, there is no evidence of a valid inpatient order in the records submitted. According to ICD-10-CM Official Guidelines for Coding and Reporting, regulations at 42 CFR 412.3 require that, as a condition of payment, an order for inpatient admission must be present in the medical record. We are upholding the original determination due to the only orders noted were for OBSERVATION status.
Please note that this determination is strictly limited to the lack of a valid inpatient order in the records submitted for review. This determination does not make any determination relative to the medical appropriateness of the hospital confinement itself or of the 1 day length of stay. Our concern is with the billing as INPATIENT status rather than OBSERVATION status which inappropriately increases the reimbursement to the facility. We are upholding the original determination. ICD-10-CM Official Guidelines for Coding and Reporting. The regulations at 42 CFR 412.3 require that, as a condition of payment, an order for inpatient admission must be present in the medical record. The preamble of the FY 2014 IPPS Final Rule at 78 FR 50942 specifies that, "the order must specify the admitting practitioner's recommendation to admit 'to inpatient,' 'as an inpatient,' 'for inpatient services,' or similar language specifying his or her recommendation for inpatient care". The purposes of this requirement are to reinforce the policy that the physician should be involved in the determination of patient status and to improve clarity among hospitals, beneficiaries, and ordering practitioners regarding whether the beneficiary is being treated as a hospital inpatient or hospital outpatient. Therefore, we decided that the Plan does not have to pay for the services provided to the enrollee on August 22, 2018.