CMS recently issued guidance regarding inpatient admission decisions in response to concerns raised by hospitals concerning how Recovery Audit Contractors (RACs), Medicare Administrative Contractors, fiscal intermediaries and Comprehensive Error Rate Testing Contractors are utilizing screening criteria to analyze medical documentation and make medical necessity determinations on inpatient hospital claims. However, the CMS special edition Medlearn Matters issuance fails to provide further clarification on the use of screening processes; rather, it instructs hospitals to review current standards as published in manuals.

CMS refers hospitals to the Medicare Program Integrity Manual and reiterates that CMS requires contractor review staff to use a screening tool as part of their medical review process of inpatient hospital claims. While there are several commercially available screening tools Medicare contractors may use -- such as Milliman, Interqual and other proprietary systems -- CMS does not endorse any particular brand. CMS repeats that contractors are not required to automatically pay a claim even if screening indicates the admission was appropriate and, conversely, contractors are not required to automatically deny claims that do not meet the screening tool guidelines. The guidance emphasizes the following language: "In all cases, in addition to screening instruments, the reviewer shall apply his/her own clinical judgment to make a medical review determination based on the documentation in the medical record."

CMS also references the Medicare Benefit Policy Manual (MBPM) and reiterates what constitutes an appropriate inpatient admission: a person who has been admitted to a hospital for bed occupancy to receive inpatient hospital services. The guidance restates the MBPM instructions that a physician is responsible for deciding whether the patient should be admitted as an inpatient.

Inpatient admission determination is an area that is being scrutinized in government investigations, such as the kyphoplasty investigations. We also have seen inpatient admission decisions being questioned by Medicare contractors (e.g., RACs). Accordingly, hospitals should review such guidance and continue to institute measures to document compliance. Such documentation is a valuable tool when produced in response to medical reviews and in support of appeals.