Physician Certification Requirements for Inpatient Stays

By Janet Hodgdon, Healthcare Consulting Director
December 2014

The Centers for Medicare and Medicaid Services (CMS) in its recently released final rules has clarified/revised physician certification requirements for hospitals, whether an acute PPS hospital, including psychiatric facilities or a critical access hospital. These clarifications/revisions, effective October 1, 2014, are summarized below.

Certification for acute inpatient services, including inpatient psychiatric services

An order for admission is required, as always, and the admission order, the medical record and progress notes should supply sufficient information to support medical necessity of the inpatient stay.  The Medicare outpatient final rule, released on October 31, 2014, changes the inpatient certification procedures for inpatient admissions, requiring actual certification only for long stay and outlier cases.

Physician certification under 42 CFR 424.13 historically has required the following:

  1. Reason for hospitalization
  2. Estimated time the outpatient will need to remain in the hospital
  3. The plan for post hospital care, if applicable

CMS states that the requirement of these three items is generally satisfied by elements routinely found elsewhere in the medical records, so continued certification for these is unnecessary and the regulations will be revised accordingly.  However, evidence of additional review and documentation beyond the admission order is necessary to substantiate continued medical necessity of long (20 days or longer) or costly (outlier) inpatient stays.  In these two situations, a formal certification process is required.

This means that before the 20th day of a stay, physicians will need to formally certify continued need for care.  For the long stays of greater than 20 days, this is fairly straightforward.  However, for outlier stays, this is a more complicated issue.

Outliers are designed to protect hospitals from large financial losses due to unusually expensive cases for which hospitals receive additional payment based on a complex calculation, including a variety of factors such as charges, cost, cost to charge ratios and a cost threshold the estimated costs must exceed.  The amount generally is calculated at the time of payment, not when the patient is still receiving treatment.  CMS expects physicians to certify an outlier stay, potentially requiring an estimated outlier calculation, prior to the 20th day of the stay.  This could prove onerous for physicians and hospitals.

Certification for critical access hospitals

Critical access hospitals also have a certification requirement.  CMS expects physicians to certify that the patient may reasonably expect to be discharged or transferred within 96 hours of admission.  CMS goes on to say that all physician certification requirements must occur no later than one day before the date on which the claim for inpatient service is submitted.  The regulations at 42 CFR 424.11 (d)(3) will be amended to reflect this change.  The regulations will also be further revised to state that certification itself begins with the order for inpatient admission.

In summary, acute, psychiatric and critical access hospitals have newly revised and/or clarified physician certification requirements for inpatients.  Facilities should implement procedures to ensure compliance with the appropriate process.

We would be happy to address how these changes may impact you.  If you have any questions, please contact Janet Hodgdon.

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.