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RAC Auditors Interested in Providers' Placement Orders

James Carroll, February 22, 2010

Admission orders are an important area of focus for auditors charged with the responsibility of recouping improper Medicare payments. Billing for an inpatient admission is dependent on the physician's order. For this reason, auditors will keep a keen eye on placement orders, according to Deborah K. Hale, CCS, president and CEO of Administrative Consultant Service, LLC.

Verifying that a valid physician's "admit" order is documented, dated, and timed is an essential step in the audit process. Simply documenting the intent in the progress notes is unacceptable; a physician is required to document intent within the initial order for services, Hale says, adding that admission orders were an issue in the RAC demonstration project, and will likely continue in the permanent RAC.

"A valid physician order for inpatient admission is just that, an order and not a progress note or a part of another document in the record," she says. "The Medicare Benefit Policy Manual clearly states 'Patients are admitted to the hospital as inpatients only on the recommendation of a physician or licensed practitioner permitted by the State to admit patients to a hospital.'" For more detail, see the hospital Conditions of Participation (CoP) at 42 C.F.R. §482.12(c)." Medicare Benefit Policy Manual, Chapter 1.

In some cases, there were denials in the RAC demonstration project because of an incomplete or missing physician's order. "We saw claims denied for inpatient admissions if the admission order did not specify the intended level of care," says Hale. "For example, 'admit to CCU' wasn't enough; it needs to say 'admit as inpatient to CCU.'"

This type of denial should no longer be an issue after publication of Transmittal 107, effective July 6, 2009, which states: "Typically the word 'admission' is used to denote inpatient admission and inpatient hospital services."

"There is no further reference to the need for the order to state 'Admit as Inpatient,'" says Hale. " However, we believe the complete wording of the level of care order is the best practice for establishing the correct level of care."

View Medicare Benefit Policy Manual, Chapter: www.cms.hhs.gov/manuals/Downloads/bp102c01.pdf

View transmittal 107, Change Request 6492, May 22, 2009: www.cms.hhs.gov/transmittals/downloads/R107BP.pdf

View HHS Frequently Asked Questions and Answers: http://answers.hhs.gov/


James Carroll is associate editor for the HCPro Revenue Cycle Institute.

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