CERT: Insufficient documentation of observation and inpatient hospital care

A Comprehensive Error Rate Testing (CERT) study showed that insufficient documentation causes most improper payments for observation and inpatient care services, according to the January 2019 Medicare Quarterly Compliance Newsletter.

CERT reviewed claims billed with HCPCS code 99234 (observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, requiring three components: A detailed or comprehensive history, a detailed or comprehensive examination, and medical decision making that is straightforward or of low complexity) submitted from April through June 2017.

HCPCS code 99234 is reported for patients who receive observation care for a minimum of 8 hours, but fewer than 24 hours, and who are discharged on the same calendar date.

CERT reported that claims with insufficient documentation lacked one or more of the following:

  • A properly authenticated record (e.g., a legible signature)
  • Documentation to support the services were provided or other documentation required for payment of the code
  • Hospital record
  • Valid physician’s order that includes all elements required by regulation, Medicare program manuals, and Medicare Administrative Contractor (MAC) specific guidelines

In its report, CERT provides an example of a physician asked by a CERT contractor for documentation when billing HCPCS code 99234. The physician submitted the following:

  • A discharge summary note for the billed date of service

According to CERT, a medical reviewer then requested additional documentation, but only received a history and physical note for the billed date of service. There was no billing physician’s order to support the observation services billed, as Medicare policy requires. As a result of insufficient documentation, the medical reviewer scored the claim as an insufficient documentation error and the MAC recovered payment from the provider.

For more information, see the Medicare Claims Processing Manual, Chapter 12, Section 30.6.8, on payment for hospital observation services and inpatient care services, or read the Medicare Quarterly Compliance Newsletter.

Editor's note: The article originally appeared on Reveneu Cycle Advisor.