Speaking the Payer's Language

Posted on April 28, 2020
By Denise Wilson

The healthcare insurance denial and appeal process is similar to a conversation between two entities with differing views of the same situation. This method may not be the most efficient or effective form of communication between payers and providers. Still, it’s what state and federal laws and regulations have provided to us to use. As such, it’s essential as appeal writers that we use the payer’s language as much as possible to create clarity in our arguments.    

When considering level of care arguments, every payer will have their definition of what constitutes an inpatient admission. Traditional Medicare (Fee for Service) uses a definition that incorporates a 2-midnight expectation for hospital care. Individual states manage traditional Medicaid programs. Thus, level of care definitions can vary depending on the state. Commercial payers, including Managed Medicare (Medicare Advantage) and Managed Medicaid, use different definitions. Many commercial payers will state in their provider manuals or within hospital contracts that they use an industry-recognized guideline such as MCG or InterQual®. In general, though, standards of care recognized by the relevant medical community serve as the basis for almost all definitions of inpatient care. 

When engaging in this appeal conversation with the payer, best practice is to use the payer’s language as much as possible. Appeal writers should be well-versed in each payer’s definition of inpatient care. At least, there should be an easily accessible payer matrix for reference for everyone involved in the denial and appeal process. The matrix should describe what criteria the payer follows when defining an inpatient admission. Then, the appeal should persuasively argue how the documentation in the medical record supports the payer’s definition of inpatient care. 

When appealing a traditional Medicare denial, pay attention to three essential arguments required to support Medicare’s definition of inpatient status; the inpatient order, the expectation of the need for at least two midnights of hospital care, and the complex medical judgment of the physician (decision to admit):

1. INPATIENT ORDER: A Medicare beneficiary is considered an inpatient of a hospital if formally admitted as an inpatient pursuant to an order for inpatient admission by an ordering practitioner. As stated in the FY 2014 IPPS Final Rule, 78 FR 50908 and 50941, and as conveyed in 42 CFR 482.24, if the order is not properly documented in the medical record prior to discharge, the hospital should not submit a claim for Part A payment. (Medicare Benefit Policy Manual, Chapter 1 – Inpatient Hospital Services Covered Under Part A, 10.2 – Hospital Inpatient Admission Order and Certification. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c01.pdf)

2. 2-MIDNIGHT EXPECTATION: An inpatient is a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services. Generally, a patient is considered an inpatient if formally admitted as inpatient with the expectation that he or she will require hospital care that is expected to span at least two midnights and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight. (Medicare Benefit Policy Manual, Chapter 1 – Inpatient Hospital Services Covered Under Part A, 10.2 – Hospital Inpatient Admission Order and Certification.

 https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c01.pdf)

3. DECISION TO ADMIT: The physician or other practitioner responsible for a patient’s care at the hospital is also responsible for deciding whether the patient should be admitted as an inpatient. Physicians should use the expectation of the patient to require hospital care that spans at least two midnights period as a benchmark, i.e., they should order admission for patients who are expected to require a hospital stay that crosses two midnights and the medical record supports that reasonable expectation. However, the decision to admit a patient is a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient’s medical history and current medical needs, the types of facilities available to inpatients and to outpatients, the hospital’s by-laws and admissions policies, and the relative appropriateness of treatment in each setting. Factors to be considered when making the decision to admit include such things as:

• The severity of the signs and symptoms exhibited by the patient;
•  The medical predictability of something adverse happening to the patient;
• The need for diagnostic studies that appropriately are outpatient services (i.e., their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more) to assist in assessing whether the patient should be admitted; and
• The availability of diagnostic procedures at the time when and at the location where the patient presents. (Medicare Benefit Policy Manual, Chapter 1 – Inpatient Hospital Services Covered Under Part A, 10 – Covered Inpatient Hospital Services Covered Under Part A.

https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c01.pdf)

For commercial payers, determine the inpatient definition in use. If the definition is lengthy, try to break it down into a few salient points. Structure the appeal argument to demonstrate how specific documentation in the medical record supports each aspect of the definition. If the payer uses MCG or InterQual®, the payer should reference in the denial correspondence the guideline used to deny inpatient payment. If the payer doesn’t provide that information, the appeal writer should formally request it before writing the appeal, as long as appeal timeframes allow. 

If the payer used an inappropriate guideline or misapplied it, an appeal can often be successful by pursuing an argument that points out the misapplication of the guideline. If the applied guideline correctly indicates that inpatient admission was not appropriate, the appeal writer must argue that the inpatient admission was medically necessary according to standards of medical care. Commercially published guidelines are based on standards of care or evidence-based medicine; however, they cannot substitute for a physician’s medical decision making. As every patient is unique, a guideline cannot always accurately represent each patient’s situation. In those instances, an argument based on evidence-based medicine often better represents the medical necessity of the inpatient admission. Referencing peer-reviewed journal articles can more fully explain the impact of comorbid conditions and risk factors on the acuity of the patient’s medical needs. 

Incorporating the payer’s language into the appeal may involve creating appeal letter guides specific to each payer, or at least, the major payers. However, it is worth the investment of time in ensuring that the appeal is on target to argue the payer’s definition of inpatient care. The effective appeal is the one that uses the payer’s language to defend the medical necessity of care provided.