Auditing Hospitalist Services

The inpatient side of coding and auditing can be enormously complex, with many more moving parts than are typically found in the outpatient setting. In this audit tip, we will discuss a few of the challenges that come with auditing one of the most important players in the inpatient setting: hospitalists.

What is a hospitalist?
As the name implies, a hospitalist is a physician who works exclusively in hospitals. They typically have an internal medicine background and play a crucial role in managing the inpatient care of acutely ill individuals. Hospitalists are a relatively new innovation, taking off in the late 1990s as hospitals sought to improve efficiency, patient outcomes, and coordination of care during inpatient episodes.

Because hospitalists are dedicated inpatient physicians, they are available to meet with patients' family members, follow up on ordered diagnostic tests and labs, answer nurses' questions, and coordinate specialist care. As specialists are a valuable and sometimes rare resource, hospitalists serve an important gatekeeper function in determining when a specialist's opinion is needed and how urgently. This can improve both patient care and the hospital's resource allocation.

Often, the hospitalist's role of patient management and care coordination is expanded by the use of non-physician practitioners such as advanced practice nurses (APNs) and physician assistants (PAs). Acting as physician extenders, these valuable providers ensure consistent patient contact during each episode of care and can significantly increase the productivity of hospitalists through split/shared billing.

Auditing admission services for hospitalists
Here's one of the more difficult scenarios you may encounter when auditing admission services billed by a hospitalist: late-night admissions, particularly by a non-physician provider.

Occasionally a patient will require admission late at night. Having the right calendar date is critical to ensure proper inpatient billing. Here's a common scenario that results in erroneous billing: A 68-year-old Medicare patient is admitted 30 minutes prior to midnight on May 15. A late-shift APN is on duty to see the patient and perform the admission service. Early the next morning, on the calendar date May 16, the hospitalist arrives to see the patient and reviews the APN's note. She dictates an addendum to the APN note rather than a separate progress note. When it comes time to bill, an initial hospital care code is billed on May 15 and a subsequent hospital care code is billed on May 16. Both codes are billed under the physician's identifier. As the auditor, you may enter this hospital's EHR and be baffled by the fact that no note appears on May 16 to support a service for that date. The moral of this story is to ensure that a.) the hospitalist is aware of Medicare's split/shared rules, which in this case precludes her billing for the APN's admission since she was not physically present until the next calendar date, and b.) that you know to be extra vigilant for documentation with the wrong date of service whenever a patient is admitted late at night or early in the morning.

Auditing diagnosis coding for hospitalists
For hospitalists, one of the most common admission scenarios is a case where a surgeon has just performed a major procedure on a patient, who is then admitted by the hospitalist for post-operative management. The question is, what should the hospitalist report as the principal diagnosis for the admission and any subsequent encounters during that stay?

For example, a 72-year-old patient with severe joint pain receives a total knee replacement on May 19 and the orthopedic surgeon bills for the procedure, triggering a 90-day global period. Later that day, the hospitalist sees the patient, who suffers from multiple chronic problems - hypertension, type 2 diabetes mellitus, insomnia, and post-traumatic stress disorder with severe anxiety. In this example, the hospitalist reported Z96.651 - presence of right artificial knee joint. As it turns out, she listed "Severe primary osteoarthritis, right knee, s/p total joint replacement" as the first item in her assessment and plan. Typing that into the EHR, the system pulled the informational code Z96.651, which became listed as the principal diagnosis.

This is not the correct principal diagnosis code - nor would it be ideal to code M17.11 (unilateral primary osteoarthritis, right knee). The surgeon would report M17.11 to show the replacement procedure is medically necessary. If the hospitalist used this same code, it may suggest that the hospitalist is billing for the same condition that just triggered a 90-day global period. Moreover, the hospitalist isn't really managing the osteoarthritis in this scenario - it's the patient's other problems that receive active management.

The code Z96.651 does apply to the patient, but the hospitalist is seeing the patient to manage the long list of chronic problems. The correct principal diagnosis would be any of those problems - hypertension, diabetes, insomnia, and so on.