Illinois Hospital Association

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February 8, 2007

Preparing for "Present on Admission"
Implications for Hospital Reimbursement and Public Reporting

As noted in earlier communications for the past year, the Centers for Medicare and Medicaid Services (CMS) will require hospitals to report on their inpatient claims a "Present on Admission" code for all principal, secondary, and e-code diagnoses starting October 1, 2007 with payment adjustments to begin October 1, 2008. Under the Deficit Reduction Act’s Section 5001 (c), CMS will implement payment reductions for select complications that occurred during the patient stay.

At several meetings and briefings over the past week, CMS shared their draft transmittal that will be sent to all PPS inpatient hospitals within the next month. For now, critical access hospitals are exempt from reporting a "Present on Admission" code on their inpatient claims since their payment does not come under the inpatient PPS changes under the Deficit Reduction Act.

Technical Hurdles Overcome. On February 1, CMS overcame the one obstacle that could have delayed implementation by receiving approval from the ANSI X12 Committee to allow a special portion of the HIPAA 837 4010 A1 Claim to be used for reporting the Present on Admission Code. ANSI has accommodated the request and the changes will be effective starting October 1, 2007.

Targeted Areas. While providers will not know the areas of focus for payment reductions starting October 1, 2008; CMS Medical Officer and Senior Advisor, Tom Valuck, M.D., J.D., did provide some insight at a national meeting in early December 2006. The areas under consideration currently are surgical site infection, ventilator associated pneumonia, catheter associated bloodstream infections, urinary tract infections, pressure ulcers, falls, and deep vein thrombosis. Criteria for final selection will include those conditions that are high cost or high volume; assignment to a higher DRG when the condition is present as a secondary diagnosis; and could reasonably be prevented through the use of guidelines or evidence based practices.

Hospital Implications. In most hospitals, this will require changes to be made in several areas, including:

  • Education and training of all staff on reporting requirements and compliance issues and technical reporting requirements for medical records and clinical staff
  • Health information technology changes will need to be made within any system that captures clinical information for usage in the inpatient medical record and billing systems. Hospitals will need to ensure that their medical records systems and billing systems are aligned and properly recording and reporting the diagnoses and present on admission codes.
  • Clinical process and outcome improvement opportunities will need to be identified (focusing on infections, falls, and deep vein thrombosis that effect outcomes is a good starting point).
  • Hospital leadership in all the various areas will need to come together to identify the pathways for successful implementation
  • Board engagement to address reporting and quality compliance issues and any major reimbursement shifts
  • Audit and compliance controls will need to be put in place as these will be high profile areas and audits
  • Expansion. While Medicare is requesting this information, we fully expect other health plans and employers to require it as well (since they were the original requestors of the Present on Admission variable over a decade ago). Also, as noted by Dr. Valuck, once CMS has the data, they will be able to mine the information quickly to identify unexpected patient outcomes based upon the information on the patient claim.

    Helping IHA Members Get Started. On Friday, February 16 from 1:00 p.m. to 2:00 p.m., IHA will host a one hour conference call providing additional background information on areas targeted for improvement, linkages to patient safety and quality measurements of the Agency For Healthcare Research and Quality, coding details, helpful resources, and technical guidelines. IHA will be joined by an ANSI X12 member and HIPAA expert to answer some of the technical issues providers will need to address as they plan their health information technology changes.

    Please contact Dottie Jackson by e-mail at: djackson@ihastaff.org for February 16 meeting materials and conference call in number.