CMS changes total knee arthroplasty (TKA) status and applies the Two-Midnight rule

Feb. 11, 2019 / By Barbara Aubry, RN

On January 24, 2019 CMS released MNL Matters article SE19002, effective January 1, 2018. The change applies to acute care, long-term care and critical access hospitals. As of January 1, 2018, total knee arthroplasty (TKA) was removed from the CMS inpatient-only list (IPO) to allow performance of the surgery in either the in or outpatient settings. CMS reiterates they are not suggesting that TKA is only appropriate as an outpatient service:

CMS policy does not dictate a patient’s hospital admission status and has no default determination on whether a TKA procedure should be done on an inpatient or outpatient basis. Rather, CMS continues its long-standing recognition that the decision to admit a patient as an inpatient is a complex medical decision, based on the physician’s clinical expectation of how long hospital care is anticipated to be necessary, and should consider the individual beneficiary’s unique clinical circumstances.

The Two-Midnight Rule audit process is confusing—there are basically three main components:

The regulation established two distinct but related medical review policies, the two-midnight presumption and the two-midnight benchmark.

Two-Midnight Presumption (helps guide contractor selection of claims for medical review): Hospital claims with lengths of stay greater than two midnights after the formal admission are presumed to be reasonable and necessary for Medicare Part A payment. Although these claims may be submitted among a sample of cases received, the Beneficiary and Family Centered Care Quality Improvement Organizations (BFCCQIOs) generally will not focus their medical review efforts on stays spanning two or more midnights after formal inpatient admission, absent evidence of systematic gaming, abuse or delays in the provision of care in an attempt to qualify for the Two-Midnight presumption.

Two-Midnight Benchmark (helps guide contractor reviews of short stay hospital claims for Part A payment): Hospital claims are generally payable under Medicare Part A if the admitting practitioner reasonably expects the beneficiary to require medically necessary hospital care spanning two or more midnights and this expectation is supported by the medical record documentation. The time a beneficiary has spent receiving hospital care prior to inpatient admission will be considered when assessing whether this benchmark is met.

3- January 2016 in the CY 2016 Hospital Outpatient Prospective Payment System (OPPS) CMS-1633-F to add the Case-by-Case Exception. The case-by-case exception states that for hospital stays that are expected to span less than two midnights, an inpatient admission may be payable under Medicare Part A on a case-by-case or individualized basis if the medical record documentation supports the admitting physician/practitioner’s judgment that the beneficiary required hospital inpatient care despite lack of a two-midnight expectation based on complex medical factors including but not limited to:

 -Patient’s history, co-morbidities, and current medical needs
-Severity of signs and/or symptoms
-Risk of Adverse Events

You may recall after the outrage regarding the RACs, CMS created the BFCC-QIOs to take over the task of reviewing cases for compliance with the Two-Midnight rule. Currently, the mandate for the BFCC-QIOs is to conduct routine analysis of hospital billing and review hospitals with high or increasing numbers of short inpatient stays that are potentially inappropriate under the Two-midnight policy. Now that TKAs are removed from the IPO list, the procedure is being reviewed for compliance. CMS reminds us in the MLN article that they have not targeted TKAs specifically for review, but during the review process of a TKA service, the QIO is applying either the Two-Midnight Rule or the Case-by-Case Exception.

My take

Once again ladies and gentlemen, it is all about documentation. The auditors look for documentation of the admitting physician’s expectation of the need for medically necessary in patient services spanning two midnights. This is usually based on patient history, comorbid conditions, expected post-operative issues, etc. The key to passing review is the documentation of the physician’s decision-making process regarding current medical needs, severity of symptoms and risk of adverse events.

CMS reminds us that they are not targeting TKA services for review, or that TKA is now an outpatient only procedure. But for those who perform TKAs that prior to January 1, 2018 were on the IPO list, it is essential that they become familiar with both the Two-Midnight and the Case-by-Case documentation requirements.

As is often the case (in my experience) with Two-Midnight stays, the root cause of the problem is lack of documentation to support the admission. If the provider can take a moment and think to themselves, “I am admitting this patient because…” and document their thought process, it goes a long way in helping determine the correct patient status. Conversely, when a TKA is intended to be observation but the patient’s blood pressure goes north or their blood sugar goes south post operatively, document it. If their pacemaker does crazy things in post op physical therapy, document it. This is the information the reviewers are looking for to certify the change to an inpatient stay. If the patient is clinically unstable but requires the TKA regardless, document the reasons they must be admitted for the procedure.

The MLM article offers clinical case scenarios created by CMS that show appropriate documentation of acceptable inpatient short stays. They are worth reviewing.

Barbara Aubry is a regulatory analyst for 3M Health Information Systems.