Health Law Daily Record supports Medicare overpayment determination for elderly patient inpatient admission
Wednesday, January 10, 2018

Record supports Medicare overpayment determination for elderly patient inpatient admission

By Leah S. Poniatowski, J.D.

The admission of an elderly patient as an inpatient was not medically necessary or reasonable in light of the record and, thus, the final decision issued by the acting Secretary of HHS that the hospital was overpaid for the service was upheld by a federal district court in California (Prime Healthcare Services – Montclair, LLC v. Hargan, January 9, 2018, Anderson, P.).

In October 2011, a 90-year-old nursing home resident was taken to the emergency room at the Montclair Hospital Medical Center after she fell and cut her head. Her fall was attributed to not having her walker when she went to use the bathroom. Her condition was stable before and after treatment, she showed no signs of any other injuries or ailments. Additionally, her medical history reflected dementia and hypertension, but no other cardiac disorders or diabetes. One test conducted while she was being treated showed her level of troponin, a protein released when the heart is damaged, was one measure beyond the normal range. The treating physician admitted her "for observation and pain control" with an admitting diagnosis of "fall/injury – rt forehead." The admitting and attending physician documented that the patient met the Milliman criteria for admitting elderly patients and noted that she was receiving IV treatment for dehydration and being monitored as syncope was possible. All tests came back negative with respect to any cardiac-related concerns and she was discharged.

A Medicare administrative contractor (MAC) reviewed the payment in April 2012 and informed the hospital that the service was not medically reasonable and necessary, and that the hospital had received a Medicare overpayment as a result. The hospital unsuccessfully proceeded through the several levels of administrative appeals. After not receiving a decision from the Medicare Appeals Council within 180 days, the Council allowed the hospital to file the present case in a federal district court.

Medical necessity. The court acknowledged that the entity submitting the claim bears the burden of establishing the reasonableness and necessity of the medical care provided and quoted a CMS ruling: "the physician is responsible for ensuring that the patient’s record includes complete medical information, and this information is the basis for determining the appropriateness of the prescribed treatment." The court agreed with the administrative rulings that the record did not support finding the inpatient admission was reasonable and medically necessary. The court explained that there was ample evidence that the patient did not have significant injuries, showed no signs of other ailments, and almost all tests came back within normal limits with no abnormalities. The admitting physician did not document that the patient’s age or history of hypertension influenced his decision and were not included in the "assessment and plan."

The court also found that there was nothing in the record to show that the patient’s lab results contributed to the admissions decision. Moreover, syncope as a basis for admission was discredited by the medical record and syncope was not mentioned in the ER physician’s chart or the admitting diagnosis. Although the admitting physician included "possible syncope" as part of the "assessment and plan," there was no documented explanation as to why it was a concern. The court also observed that the ER physician did not explain why the patient was being admitted "for observation and pain control" instead of being put on observation status. Consequently, the record did not support inpatient admission for the patient.

Other criteria. The court was unpersuaded by the fact that the patient’s admission lasted more than 24 hours. The terms of the governing Medicare Policy Manual provided that the expected length of stay at the time of admission—not the actual length—was determinative, and that there was nothing in the record to show that the treating physicians expected the patient to require 24 hours or more of care, especially when the Manual provided that outpatient observation services may take 48 hours or longer. Additionally, the Milliman criteria are not binding and the hospital admitted that the patient did not meet the InterQual criteria, which are also non-binding. Further, the selection of "Further evaluation of cause of fall" and "Further evaluation of extent of injury" criteria by the physician was not accompanied with any additional note as to why the patient would need inpatient care and the physician did not choose the criterion for "[t]reatment of cause of all requires inpatient care." Consequently, the court agreed that the hospital was overpaid for the inpatient treatment.

Overpayment waiver. The court also determined that the ALJ was correct in denying the hospital’s waiver claim under Section 1879 of the Social Security Act because under 42 C.F.R. Secs. 411.406(e)(1) and (e)(3), the hospital "is presumed to have knowledge of published Medicare rules, regulations, and guidelines" and there was no substantial evidence to the contrary.

The case is No. 2:17-cv-00659-PA-JC.

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