Line item removal of cardiac implants: Revenue integrity’s next challenge
by Ronald Hirsch, MD, FACP, CHCQM, CHRI
Prior authorization has become commonplace in medical care today. For many years, insurers have required prior authorization for advanced imaging and procedures. Prescribing medication often requires following step therapy and submitting a prior authorization to the pharmacy benefit manager. Hospitals must notify payers of inpatient admissions. Medicare has even started requiring prior authorization for select procedures performed at hospital outpatient departments.
But one insurer is taking prior authorization to another level. In a policy published online, one national health insurer has notified providers that for many of their plans, any electrophysiology implant, including pacemakers, defibrillators, and cardiac resynchronization therapy—even those placed during an inpatient admission—requires prior authorization. Although the prior authorization requirement for elective placement of these devices is intended to ensure that the patient meets the payer’s medical necessity guidelines, the requirement for inpatients presents several challenges and requires careful scrutiny.
The most significant concern is time related. Patients are hospitalized and admitted as inpatients because they require care that can only be safely provided in the hospital. Care provided each day of a hospital stay must be justified and deemed necessary. If it is determined that a patient requires a pacemaker or defibrillator during their hospital admission, the patient should have access to that procedure as soon as feasible. It is not only inconvenient for the patient, the physicians, and the hospital to have to wait until the authorization is approved by the payer, but it exposes the patient to the many risks of a prolonged hospitalization. In the case of a patient requiring a pacemaker, the physician may be forced to continue the use of a temporary pacemaker, awaiting authorization, again exposing the patient to unnecessary risk.
The logistics of obtaining this authorization are also daunting. Utilization review processes are hard wired to notify payers of inpatient admissions but the need for a second authorization during that inpatient stay did not previously need to be addressed. Elective care can be planned and is usually limited to “working hours,” but the urgent need for an implant can occur on any day and at any time. Although this payer’s new prior authorization policy allows providers to notify the payer after the procedure for “after hours” placement, that is of little consolation if the payer then determines the procedure was not necessary. It also requires a workflow to ensure that the notification occurs within the payer’s timeframe.
There is also a financial concern. Most inpatient admissions are paid on a per-admission basis, so a stay that is prolonged by one or two days will result in added cost to the hospital with no additional reimbursement. For hospitals that run at capacity, that bed is unable to be used for another patient whose care may be delayed or even provided in a less than optimal location such as the emergency department (ED) hallway.
But hidden within the financial realm is another risk. When an inpatient claim is processed for payment, the presence of a surgical procedure will affect payment, moving the admission from a medical to a surgical group. If an inpatient underwent the placement of an electrophysiology implant and the prior authorization was not obtained, the payer has a few options. It would seem reasonable for the payer to contact the provider and request clinical information to determine if a retroactive authorization can be issued. But the policy gives no indication whether retroactive authorizations are permitted except when the payer cannot be informed because the placement was performed outside the payer’s normal office hours. Alternatively, the payer could issue a formal claim denial and allow the provider to submit a formal appeal.
But the worst possible scenario is that the payer will simply remove the procedure from the claim and reprocess it, making the adjustment to the payment. For instance, a patient admitted with syncope and a heart rate of 30 who has a pacemaker placed without prior authorization would have the claim processed not as an inpatient admission with the principal diagnosis of bradycardia with placement of a permanent pacemaker, but rather as a medical inpatient admission for bradycardia. This claim adjustment would be easily missed since the claim is paid and the payment difference simply viewed as a contractual adjustment, resulting in the adjustment being accepted and the claim finalized. In the MS-DRG system, the relative weight difference between those two, assuming no complication/comorbidity (CC) or major CC (MCC), would be 2.01, resulting in a payment difference of more than $10,000 for a community hospital with no teaching program. For placement of a defibrillator, the difference could exceed $30,000.
Adjustments without notification are not unprecedented. This same payer has a policy of performing claim analyses with a proprietary algorithm to ensure that ED visit facility fees are billed at the “proper level,” with the HCPCS code automatically downgraded if the algorithm differs with the submitted HCPCS code.
Monitoring for automated line item code adjustments are not a new task in revenue integrity. But the removal of a code with such substantial revenue implications seems unprecedented. The first step, awareness of the issue, is now complete. The rest is in your hands.
About the author
Hirsch is vice president of R1 RCM in the physician advisory services division in Chicago and a general internist and HIV specialist. Previously, Hirsch was the medical director of case management at Sherman Hospital in Elgin, Illinois. He is certified in healthcare quality and management by the American Board of Quality Assurance and Utilization Review Physicians. In addition, he is a member of the American Case Management Association, a member of the American College of Physician Advisors, and a fellow of the American College of Physicians. He is a NAHRI Advisory Board member.