This document describes an initiative by Catholic Health East (CHE) to implement system-wide Medicare compliance standards across their network of hospitals. A task force developed 12 standards of practice focused on accurate patient status determination and communication between case management, billing, and other departments. A large teaching hospital pilotted the standards, which improved billing timeliness and reduced aged Medicare accounts. All CHE hospitals were then required to implement the standards within 3 months. The standards addressed issues like physician-led utilization reviews, concurrent case management, electronic communication, and data analysis. Overall the goal was to promote early and accurate status assessments to support compliant billing and reimbursement.

1. Medicare Compliance Readiness:
Practical Strategies
A story of inclusion, a nine month journey, and on-going optimization
Lana Cabral, RN BSN MSM
lcabral@che.org

2. 2
Objectives
• Describe an interdisciplinary approach to implement
Medicare compliance practice standards in your
health system or hospital
• Clarify how Medicare compliance practices by the
case manager impacts the hospital’s clinical and
financial outcomes
• Identify case management strategies to support a
constant state of Medicare compliance readiness

3. 3
Lana Cabral, RN BSN MSM
Director, Clinical Transformation
Care Management/ MIDAS+
lcabral@che.org
Catholic Health East
Newtown Sq, PA
Laura H. Roberts
Director, Corporate Compliance
lroberts1@che.org
Catholic Health East
Newtown Square, PA
CHE health system is located within 11 eastern states
from Maine to Florida. CHE has 35+ hospitals (20
wholly owned), many long-term care facilities,
assisted living and retirement communities. CHE is
the largest not-for-profit provider of home health
services in the nation.
Catholic Health East

4. 4
Today’s Hospital Regulatory Environment
• While compliance programs have been encouraged
by the Health and Human Services Office of Inspector
General since the mid to late 1990’s, with the passing
of the Patient Protection and Affordable Care Act,
these same programs are becoming required by law
• The reimbursement landscape is changing in a way
that reduces payment more often than it increases
• Reimbursement will increasingly hinge on highly
complex formulas and measurements
• Case Management is the “bridge” between the
clinical and reimbursement teams

5. 5
Areas of Focus
• Short stay inpatient admissions
• Readmissions
• Outlier claims
• High dollar/High frequency DRGs
• Admissions where the payment
exceeded charges
• Discharges to Skilled Nursing
Facilities
• Discharges to Hospice Facilities
$-
$500,000,000.00
$1,000,000,000.00
$1,500,000,000.00
$2,000,000,000.00
$2,500,000,000.00
$3,000,000,000.00
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
HC Fraud Recoveries
These are a few of the areas that have been the focus of
Recovery Audit Contractors and the Office of Inspector General
See Appendix A for one
hospital’s story

6. 6
“Achieving Accurate Reimbursement & Compliance”
A system-wide program

7. 7
System-Wide Initiative
• Name drives expectation  “Achieving Accurate
Reimbursement & Compliance”
• Executive Sponsorship: Case Management,
Compliance, Revenue Cycle
• Interdisciplinary group formed from across CHE
(Catholic Health East) representing our core group of
hospitals (n=20)
• Key stakeholder groups solicited and updated
regularly
• Over 5 month period the task force and sub-task
forces met frequently via conference calls

8. 8
Key Principles Addressed by Task Force
1. Hospital practices for utilization review and ‘status’ billing are
in compliance with regulations; Compliance opportunities
identified from reports such a PEPPER and Comparative
Database Reports are evaluated and valid areas of
opportunity are addressed
2. Inpatient medical necessity is based on the CMS definition of
inpatient care; Hospitalized patients have their ‘status’
determined/ validated, preferably while they are hospitalized,
otherwise, prior to billing
3. Hospitalized outpatients are proactively case managed and
their transition to the appropriate level of care/setting is
facilitated

9. 9
Key Principles Addressed by Task Force
4. There is consistent, accurate electronic communication to
support accurate billing between Hospital Case Management
(HCM), Patient Financial Services (PFS), and Patient Access; All
required documentation is in the patient’s medical record,
Health Information System, and/or the Case Management
System as applicable to support coding for billing
5. Commercial/Managed Care payer determinations, which are
managed by Utilization/Case Managers, are communicated
electronically “by exception” to Patient Financial Services
(PFS)

10. 10
The Output of the Task Force
• Rapid self-assessment of current state:
– Agreement that communication needed to be enhanced amongst all
stakeholder parties
– Agreement that processes/workflow needed to be more compliant,
efficient, reliable, and auditable
• Research on ideal future state:
– Discussion on the gap
– Future state process / workflows design discussions
• Pilot by one large teaching hospital:
– Progress and lessons learned incorporated
• Developed 12 Standards of Practice (must dos) and 1 Leading
Practice (highly recommended) effective Oct 1st 2010
– See Appendix B

11. 11
Impact from the Pilot -
Implementation of Electronic workflow Between
Case Management & Billing
Pre-implementation:
• DNFB (Days Not Final Billed)
>60 days - Medicare Short
Stay Accounts:
– 40-116 (~$2M+)
Post-Implementation:
• DNFB (Days Not Final Billed)
>60 days - Medicare Short
Stay accounts:
– Less than 5 “aged
accounts” (<$500K)
• DNFB threshold is a max of
15 accounts; Meet weekly to
discuss the holds

12. 12
Enlisting Executive Support for System-wide Change
• Key Stakeholder Groups: Hospital Case Management, Patient
Financial Services, Patient Access, Compliance Officers, and Health
Information Management/ Coding; Health System’s Hospital CFOs;
CHE Senior’s Management Team and the Hospital CEOs
• CEOs identified a Champion at each hospital
• Hospitals given 3 months to form local task force and implement
standards October 1st 2010

13. 13
Expected Outcomes - Benefits
Clinical:
• Earlier case
management of all
Medicare patients
promotes earlier
treatment plan
assessment and
intervention; earlier
patient and family
engagement; earlier
transition planning
Financial & Compliance:
• Timely and accurate
billing
• Workflow efficiency/
Productivity
• Medicare compliance
• Data reliability and
accuracy
• Throughput/ LOS/
Capacity

14. 14
Practical Strategies
Medicare Compliance Readiness:

15. 15
Practical Strategies
• Establish Clear Expectations of Case Management, Patient
Access, Billing & Coders with a Solid Infrastructure:
– Standards/P & P; Education; Monitoring; and Tools
• Engage Physician Advisor(s) and Utilization Review
Committee (URC) :
– ‘Market’ throughout your hospital/health system the growing
importance of the roles of PA and URC
– Inpatient Medical Necessity: Know and use the CMS definition of
Inpatient Care, Invasive Procedure Criteria, and Practice Guidelines that
are evidence-based and well accepted by the medical community
– Make the most of your URC: Use the interdisciplinary membership as
an advisory board/decision making body; Bring completed data
analyses with recommendations

16. 16
Practical Strategies
• Tighten the Front-end; Insert ‘Checks & Balances’ in the
Front–end:
– Institute a 3 Point Match (Order, Medical Necessity, HIS System)
• Incorrect status in HIS increases the potential for billing errors
– Check status at the time of referral to Patient Access/ Logistics Center
(direct admits, transports in)
• Conduct Status Checks (again) Prior to Surgery:
– Check order for status again prior to surgery/procedure:
• Confirm status as IP prior to incision (when on the IP only List) or
risk denial from the RAC
• Check the CMS Lists:
– Use Addendum E – IP Only List
– USE Addendum B – Quarterly Updates (all Pdx)

17. 17
Practical Strategies
• Address Failure Points in the Process Flow:
– ‘Decision to admit’ without CM input  ‘Point of Entry’ UM
• Be concurrent in case management practice and prospective
whenever possible, with case management in the ED, Logistics center,
PAT/OR
– Incorrect status in HIS (Health Information System) increases the
potential for billing errors
• Be clear about Status clerical corrections vs. notification of a Status
change
• Conduct Status Checks Prior to Billing :
– Review/confirm status within the period before the bill drops
– If necessary, (for the short term): Hold bills (≤ 3 LOS); release once
confirmed
• Move Process and Communication to Electronic:
– Efficient, measurable and auditable
– Agreement on which system you will find which data

18. 18
Practical Strategies
• Stress Proper Patient Notification - CMS Beneficiary Notices:
– Provide written and verbal information regarding status:
• CMS: “Are You a Hospital Inpatient or Outpatient? If You Have
Medicare – Ask!”
– Clearly identify the responsible party(s) to deliver, in a timely fashion,
Status Change Notification letters to the patient, physician, and
hospital
– Establish a comfort level with HINN and Discharge Appeal Notice
delivery; consider having staff from both Case Management and
Patient Financial Services deliver the notice to the patient
• Address Actionable Data (e.g. PEPPER); Understand Where
the Hospital is an Outlier for Certain Risk Areas:
– Utilize an interdisciplinary process to analyze data and develop action
plans; Keep the URC informed

19. 19
Tools
• Standards Manual (34 pages): Clearly states the
must-dos, rationale, and citations
• Concurrent and Retrospective Status Change
Worfklows
• Quick-Reference Guides
• Case Management Information System supports:
worklist rules, new dictionary terms, documents,
reports, e-mail notifications
• Training and support
• Subject of the system-wide 2011 External Audit

20. 20
External Compliance Audit
• Audit design based on the standards in the manual;
core hospitals audited in 2011
• Lessons Learned from the findings:
– Hospitals which specifically followed the manual were
found to have Medicare complaint practices
– Hospitals which asked for and had individual education
were found to have complaint practices
– Hospitals with competing priorities which impacted Patient
Financial Services or Case Management did not perform
well on the audit

21. 21
Appendix A: One Hospitals Experience
“Achieving Accurate Reimbursement & Compliance”

22. 22
One Hospital’s Experience
• In December 2007, Saint Joseph’s Hospital in Atlanta, Georgia
entered into a 5 year Corporate Integrity Agreement as a result
of an audit focused primarily on Short Stay admissions
• This case resulted from a qui tam action; Many corrective
actions, including close collaboration between Case
Management and Compliance, were implemented prior to the
Corporate Integrity Agreement was signed
• Saint Joseph’s was the first hospital in the country to
implement a “Case Management Assessment Protocol” as a
requirement of a Corporate Integrity Agreement

23. 23
History of the Case
• The Department of Justice focused their investigation on the
following areas:
– Zero-day stays – Inpatient admissions where the admission date and
the discharge date were the same
– One-day stays – Inpatient admissions where the admission date and
the discharge date were one day apart. The investigation focused
primarily on:
• Chest pain admissions
• Admissions made from the Emergency Department and Direct
Admissions
• Medically Unbelievable admissions – the Length of Stay and the
patients discharge were significantly shorter than the statistical
average
• End Stage Renal Disease – Specifically dialysis services provided to
inpatients for which there was not an associated inpatient
diagnosis
– For patients discharged to Nursing Homes who possibly did not have a
medically necessary inpatient admission of 3 days prior to discharge.

24. 24
One Day Admissions and PEPPER- Example
1DS Chest Pain
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Q1 FY 2006 Q2 FY 2006 Q3 FY 2006 Q4 FY 2006 Q1 FY 2007 Q2 FY 2007 Q3 FY 2007 Q4 FY 2007 Q1 FY 2008 Q2 FY 2008 Q3 FY 2008 Q4 FY 2008
HospitalPercentage
Hospital Statewide:90thPercentile Statewide:75thPercentile Statewide:Median Statewide:10thPercentile
Statewide 90th Percentile
Hospital
Statewide Median

25. 25
Case Management Assessment Protocol
• The Florida QIO developed this type of protocol and
worked with CMS to implement a demonstration
project for hospitals in Florida
• With the investigation focusing on the appropriate
admission status, it seemed prudent to Saint Joseph’s
to implement a similar protocol
• As seen on the previous slide, the impact was
dramatic following the implementation of the case
management assessment protocol in FY Q2 2008
(January-March 2008)

26. 26
Appendix B: CHE Hospital Standards of Practice Manual
“Achieving Accurate Reimbursement & Compliance”

27. 27
A Note About Standard Language
 Working with multiple hospitals from Maine to Florida required agreement
on and the use of a standard language for use in the “Achieving Accurate
Reimbursement & Compliance” Manual
 Hospitalized Patient: Generic term for an outpatient or inpatient in a bed
 Status/ Status Management: A patient’s hospital “status” is either
“Inpatient” or “Outpatient”
 Service Level:
o Inpatient: e.g. Critical Care, Intermediate Care, Acute Care
o Outpatient: e.g. Observation, Outpatient in a Bed, Ambulatory Surgery
 “Initial Review”: Formerly known as the “Admission Review”
 Patient Financial Services (PFS): Hospitals use a variety of names such as
Central Business Office, Billing
 Patient Access: Hospitals use a variety of names such as Admitting

28. 1. Hospital Utilization Determinations (e.g. Status Management) Must be
Made By a Physician Member of the Utilization Review Committee
2. Inpatient medical necessity is based on the CMS definition of inpatient
care as determined by the Physician Member of the Utilization Review
Committee
28
 A patient’s hospital “status” is either “Inpatient” or “Outpatient.”
o Observation is an outpatient service
 Only a physician member of the Utilization Review Committee (URC) can make a status
change determination.
o The CMS definition of inpatient care is utilized by the Utilization Review Committee
Physician when making a status determination. The hospital’s designated Case
Management Physician Advisor (PA) is an active member of the Utilization Review
Committee; this includes a vendor Physician Advisor and their inclusion as a physician
member of the URC is documented in the hospital’s UR Plan.
 Inpatient Care Definition
o Medicare Benefit Policy Manual: Chapter 1, §10: Inpatient Hospital Services Covered
Under Part A
 Inpatient-only Procedures
 Outpatient in a Bed
 Outpatient Observation Services
Standards Review

29. 3. All Medicare Patients Will have Their Status Confirmed Prior to Billing;
Billing Guidelines Are Adhered To
4. Use of the Case Management Information System Is Required By All
parties in the Status Management Workflow
29
 The Status Confirmation and Status Change Workflows require the use of case
management information system by Hospital Case Managers, Hospital-based Physician
Advisors, Patient Financial Services, and Patient Access
 Medical Necessity Review consists of the Initial Review (formerly known as the “Admission
Review”) of a hospitalized patient to determine appropriate status and hospital level of
care
o 1st Level Review – Case Manager; 2nd Level Review – UR Committee Physician
Advisor
 Concurrent and Retrospective Reviews (Patient Status flows: “CHE Hospital Standards of
Practice Manual”)
o Concurrent Review occurs while patient is still hospitalized
– IP to OP Status Changes: Condition Code 44
o Retrospective Review occurs post-discharge
– Provider Liable Claim (12X Bill)
Standards Review

30. 5. Status Management is a Daily Activity; Prospective and Concurrent
30
 Hospitals are expected to manage the status confirmation process 7 days per
week
o Status confirmation is conducted whenever possible concurrently, or
prospectively, and in the event status confirmation is conducted after the
patient’s discharge, the CHE Standard Retrospective Workflow is followed.
 The need for hospitals to correct inappropriate admissions (Status Changes IP 
OP) should be a rare circumstance
o All efforts should be placed on conducting Medical Necessity Reviews
prospectively as applicable, otherwise concurrently at the points of entry
and on the patient care units
 Utilization Review Process
o Prospective
o Concurrent
– Medicare Emergency Department Case Management
o Retrospective
Standards Review

31. 6. Case Manager Confirms the Patient’s Status “Matches” on 3 Points
31
Standards Review
Pt Status =
SI/IS
Status in Health
Info System
Physician Order
Accurate Billing
to Payer and
Patient
Case Management’s
Three Point Match
+ + = Match

32. 7. All Hospitalized Outpatients Are ‘Case Managed’ Concurrently
8. Avoid the Use of “Outpatients In A Bed” (OIB,) such as “Extended
Recovery” For Patients
32
 Hospitalized Outpatients:
o All hospitalized outpatients are case managed concurrently based on
their clinical condition to affect a rapid transition to an alternate care
setting or inpatient status at the point of their earliest qualification.
 Outpatients In A Bed:
o The assignment of an ambulatory surgery outpatient released from
Post-Anesthesia Care Unit to a patient care unit bed should not be
considered unless their condition warrants a change in their service to
OBS or their status to Inpatient which will require a physician order.
 Hospitals are to have a process in place to comply with any inpatient
notification requirements for the circumstance of a Hospitalized
Outpatient changing status to that of an Inpatient.
Standards Review

33. 9. The hospital’s Utilization Review Committee (URC) is a Required and
Valuable Committee to the Hospital
33
 The hospital’s Utilization Review Committee carries out the duties
required by the Hospital Conditions of Participation for Utilization
Review and fulfills any state UR requirements
 The URC is data-driven, outcomes-focused, and action oriented
Standards Review

34. 10. Distribution of CMS Beneficiary Notices and Hospital Discharge Appeal
Notices Are an Interdisciplinary Task
34
 CMS Beneficiary Notices and Hospital Discharge Appeal Notices will be
distributed in accordance with CMS guidelines.
o Advanced Beneficiary Notice (ABN)
o Hospital-Issued Notice of Non-Coverage (HINN)
o Hospital Discharge Appeal Notices
 Every effort should be made for a notice to be delivered to the patient
jointly by a Case Management staff member and a representative of
Patient Access/Financial Counseling; both the clinical and financial
implications are reviewed with the patient.
Standards Review

35. 11. HCM Communicates Commercial and Managed Care Payer Exceptions
to Patient Financial Services (PFS)
35
 Payer Determinations as a result of the ‘external’ review process with
payers (Commercial, Managed Care, TriCare, Some State Medicaid) are
communicated to Patient Financial Services by exception
 Case Management Information System use is required by all parties in
the payer determination communication process
Standards Review

36. 12. Valid Areas of Opportunity Identified Through Key Reports Require
Action
36
 Keys Reports that Potentially Generate Actionable Data
o Program for Evaluating Payment Patterns Electronic Report
(PEPPER)
o Information system reports, such as comparative database
reporting
 Process:
o Establish a monitoring team
o Identify Reports
o Conduct routine meetings
o Conduct action item follow up
o Perform on-going monitoring, trending data over time
o Report findings
o Maintain documentation
Standards Review

37. Leading Practice*Not required, however, the adoption of this practice is encouraged
• Claim Concordance of the Hospital Bill and the Physician Bill is
Important
o The hospital has a role in supporting Claim Concordance of the hospital bill and
the physician bill due to an increasing emphasis and level of scrutiny on billing
accuracy
o Physician coders and billing personnel collaborate to match the physician claim
with the dates of service that is in the hospital system
37
Hospital:
 Admission date is Day Three
 Previous observation charges combined into
inpatient stay
Example:
Day One: Patient placed in observation status
Day Two: Patient observed overnight
Day Three: Patient advanced to inpatient status
Day Four: Patient maintained in inpatient status
Etc….
Physician:
 Day One: Initial observation code
 Day Two: Office visit code
 Day Three: Initial inpatient code
 Day Four: Follow up inpatient code