Case Management Corner: CMS Notice May Create Hurdles
By Kelly Bilodeau
As of February 14, hospitals have a new CMS notification to contend with. But unlike the Medicare Outpatient Observation Notice (MOON) or the Important Message from Medicare, the Medicare Change of Status Notice (MCSN) might not be as easy to automate and could create operational challenges, said Sara Williams, MSN, RN, ACM-RN, vice president of clinical strategy at Phoenix.
CMS created the notification to let Medicare patients know that they can appeal if a doctor admits them as an inpatient, but later downgrades them to observation services. Patients sued CMS for the right to challenge these reassignments, which can lead to significant out-of-pocket costs. Patients with only Part A Medicare coverage shifted from inpatient to observation may be on the hook for the entire hospital stay if they do not also have supplemental coverage. Patients with Part A and B may not meet the three-day qualifying inpatient stay needed to unlock Medicare coverage for a subsequent skilled nursing facility stay, which may force them to forgo care or to pay out-of-pocket.
Challenges ahead
While the decision was a welcome one for patients, Williams said, the MCSN is likely to present some hurdles for hospitals. “Operationalizing this is going to be a challenge,” she said. For one, the notice only applies to a sliver of Medicare patients, including Medicare Part A patients who were downgraded from inpatient status to outpatient with observation services and does not address patients with Medicare Part A whose status changes to OP, such as patients undergoing elective procedures. It also applies to Medicare Part A and B beneficiaries receiving observation services who are still in the hospital three days or more after the original inpatient order. The notice is only issued after they meet this criterion.
Because of these constraints, hospitals can’t establish a pre-set list of patients to receive the MCSN and may need to weed through individual cases to determine when it applies— leaving more opportunity for lapses. CMS requires staff members to give patients the notice “as soon as possible,” but no later than four hours before discharge. It will be important for hospitals to look for innovative strategies to use technology to alert staff to patients who should receive this notice.
Before the MCSN, the hospital would give a downgraded patient a MOON or a Condition Code 44 letter, Williams said. While some suggest substituting the MCSN for the Condition Code 44, questions linger because neither CMS nor the Quality Improvement Organizations (QIOs) have offered specific guidance. “My recommendation is to continue their current patient process and to provide this notice in addition,” Williams said.
Preparing for retroactive appeals
Hospital Health Information Management Departments will also need to field requests related to retroactive status change appeals because the court approved them in cases extending back to January 1, 2009. As a result, hospitals will also need a process to ensure patients can obtain related records, which will be an additional challenge. “Make sure that internal teams are educated to understand what these requests are and why,” Williams said.
While the new appeal process could benefit patients, Williams said it might not always hit the mark. For example, the notice requirement doesn’t apply to patients reassigned to outpatient status, just observation, which could limit appeal rights for surgical patients who commonly run into trouble with these status changes. If a surgical patient with only Part A coverage came into the hospital for inpatient surgery and the doctor reassigned them to outpatient status, they would have no coverage and can’t appeal the decision, Williams said.
However, this outpatient/observation distinction can also allow facilities to avoid the notification requirement in some situations, Williams said. “If you have a Condition Code 44 patient who is being discharged within an hour, instead of making them outpatient with observation services, it's safer to just make them an outpatient,” she said. The facility can’t bill for the observation hours anyway because the stay is under the eight-hour threshold, and they aren’t required to provide the MCSN.
Strategies for compliance
When the notification is required, hospitals should ensure that they comply with CMS specifications, which include:
· Incorporating an unaltered notification into the electronic medical record system
· Including the expiration date and a general phone number that the patient can use to contact the QIO
If staff members deliver the notification to a patient representative, they should establish a process to document verbal and/or written receipt.
Ultimately, while this new notification is well-intentioned, CMS and hospitals still need to iron out some kinks and overcome logistical hurdles to achieve its intended goal.
Case Management Corner is your go-to source for insightful discussions on relevant topics in case management. Through an engaging interview-style format, our team members share their expertise, experiences, and best practices to keep you informed and empowered. Whether you're looking for industry updates, practical strategies, or real-world perspectives, we bring you valuable conversations designed to enhance your knowledge and support your professional growth. Stay tuned for expert insights straight from the field! Kelly Bilodeau has been a longtime writer for HCPro’s Case Management Monthly.