Physician certification of inpatient medical necessity

Part 1 of 2 about Medicare's medical necessity requirements

What's required in content, timing, and format.

Confusion and consternation reign over Medicare's 2-midnight rule for the medical necessity of inpatient admissions, and the requirement for a physician “certification” of medical necessity for inpatient services. These are 2 separate but related issues. The 2-midnight rule became regulatory law on Aug. 2, 2013, and applies to all cases with an admission date on or after Oct. 1, 2014. The requirement for a physician inpatient order and certification has been in existence since 1988, with several amendments since then, and is the topic of this column. Next month we'll discuss the 2-midnight rule.

Photo by Thinkstock
Photo by Thinkstock

Medicare has always required an inpatient order and certification of medical necessity as a prerequisite for coverage of inpatient care. In general, the requirements for certification are content, timing, and format.

Content requirement

Content includes an “admit” order; the reason for inpatient medical care or medically-required inpatient diagnostic study; the estimated time required for inpatient care; and plans for post-hospital care.

A statement to “admit” the patient is generally acceptable for the inpatient order, but an indication in the order that inpatient status is intended is even stronger, such as “Admit as inpatient to unit 3.” For the purposes of certification, a verbal order is valid but it must be authenticated prior to discharge. When the permanent Recovery Audit program was instituted in 2009, many clinicians were caught off guard by inpatient Medicare claims being denied in full because the word “admit” did not appear in the orders.

The requirement that a clinician provide reason for admission may be met by documentation in the initial inpatient admission assessment (H&P) and/or the admitting diagnoses and orders. This will be discussed in greater detail in the next column, but the 2-midnight rule sets the general criteria for inpatient admission and physician certification of its necessity. The clinician must clearly state and document his or her expectation that hospital admission will be required over at least 2 midnights. Documentation must support that this expectation is based upon accepted standards of medical practice and patient-specific clinical circumstances.

The requirement for plans for post-hospital care is met by the physicians' notes and/or the discharge instructions and isn't typically a source of contention.

Timing and format requirements

Timing of the certification begins with the inpatient admission order. The patient does not become an inpatient until the date and time of the admit order. Medicare does not allow any retrospective orders, such as an order on Wednesday to “Admit as inpatient as of Monday.” The observation services provided prior to the inpatient order/certification are always “rolled into” the inpatient admission and DRG payment. If, on the day the order is written, a patient is still sick enough to stay for at least 2 more midnights, a physician can certify the whole stay. So if a patient came in on Monday, and an order was written on Wednesday, the physician must expect the patient will stay for at least 2 midnights starting from Wednesday to count the entire episode as medically necessary for inpatient care.

Medicare also states that all elements of the certification discussed above must be “completed, signed, dated, and documented in the medical record prior to discharge.” The certification is not dependent upon the completion of a formal discharge summary, but best-practice standards call for dictation of the summary at the time of discharge.

As for format, Medicare states that “no specific procedures or forms are required for certification….The provider may adopt any method that permits verification….[Certification statements] may be entered on forms, notes, or records that the appropriate individual [the clinician] signs, or on a special separate form.” In essence, the certification may be based on the medical record as a whole, so long as it collectively contains all the required elements.