Present and Accounted For

Medicare Initiative Poses Hassles for Hospitals, Physicians


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Quality Feature - September 2007  

By  Ken Ortolon
Senior Editor  

A new Medicare quality initiative focusing on hospital-acquired conditions likely will create some financial pain for hospitals. But experts say it also will add significant hassles for physicians.

The new program, mandated by the federal Deficit Reduction Act of 2005, requires hospitals beginning in October to document on Medicare claims whether all of the conditions that were treated were present when the patient was admitted to the hospital. If some conditions were acquired during hospitalization, the hospital could see its reimbursement reduced.

While hospitals are the ones facing the financial hit, Texas Hospital Association (THA) officials say physicians will bear much of the burden for documenting in patients' medical records whether conditions were "present on admission" (POA). Starr West, THA director of policy analysis, says hospitals will rely heavily on physicians to provide the proper documentation.

"There will definitely be some implications for physicians," she said.

Meanwhile, physicians warn that if the U.S. Centers for Medicare & Medicaid Services (CMS) collects this type of data on hospitals, it likely will want it on doctors, as well.

"Understand that if CMS can collect hospital-level data, they can just as easily collect physician-level data," said San Antonio pulmonologist John R. Holcomb, MD, a member of Texas Medical Association's Council on Scientific Affairs. "Your name and your identification number are on that patient's chart and on that CMS bill, as well." 

How It Works  

Beginning Oct. 1, hospitals must report on all inpatient Medicare claims a POA code for all principal and secondary diagnoses. CMS will not actually begin using the codes for claims processing until Jan. 1, 2008. On April 1, 2008, CMS will begin returning for submission claims that do not have a POA code.

And, beginning Oct. 1, 2008, hospitals could see their reimbursement reduced for conditions that were not present on admission.

Under the Deficit Reduction Act, CMS must select at least two conditions to target initially under the POA program. Conditions under consideration include surgical site infection, ventilator-associated pneumonia, catheter-associated bloodstream infections, urinary tract infections, pressure ulcers, falls, and deep-vein thrombosis.

Ms. West says CMS essentially is targeting diagnosis-related groups (DRGs) where the presence of a complicating condition or a comorbidity produces a slightly higher payment rate for the hospitals. There are about 120 such DRGs, she says.

If the complicating condition is not documented as "present on admission," the hospital will be paid as if the complicating condition did not exist, she adds.

The magnitude of the financial hit on hospitals will depend largely on which conditions CMS decides to target. "Most of them are fairly low volume, so I don't think this is going to be an enormous hit," Ms. West said. 

Preventable Conditions  

Dr. Holcomb says many of the conditions CMS is considering are preventable and should be avoided through use of accepted best practices. However, he says penalizing hospitals on a case-by-case basis for failing to prevent a condition such as deep-vein thrombosis would be unfair.

Use of subcutaneous heparin is the accepted treatment to prevent deep-vein thrombosis among hospital patients, but it is not 100-percent effective, Dr. Holcomb says.

"So if you dinged the hospitals on a case-by-case basis (for failing to prevent deep-vein thrombosis) that would be grossly unfair," he said. "On the other hand, you could argue if one hospital's aggregate number of deep-vein thrombosis cases that develop during hospitalization was 25 percent and all the rest of the like hospitals were at 10 percent, then CMS would probably have a pretty firm basis for saying we're going to pay you less because you provide less effective care." 

The Documentation Police  

The hassle for physicians likely will be increased pressure to document all complicating conditions on the medical charts. If a chart does not reflect whether a condition was present on admission, the hospital billing office will go back to the physician to provide that documentation, Ms. West says.

"I think there's a risk that this will not be very good for hospital-physician relations because physicians are going to question why they're being asked for this," she said. "There will be a hassle factor with it. Some of those are things physicians have not been accustomed to documenting to the level of detail that we may be looking for now."

Dr. Holcomb agrees. "The hospitals' risk is that they will be defeated by the doctors' lack of attention to the documentation requirements," he said. Physicians may be using best practices to prevent the targeted conditions but they also may not be fully documenting those efforts or whether the condition was POA, he adds. "The hospitals have been put in the position of policing the doctors' documentation."

TMA, THA, and the TMF Health Quality Institute are collaborating to develop a series of audio conferences to help Texas hospitals prepare for the POA initiative. (See "Audio Conferences to Examine POA Initiative.")   The conferences will be intended mainly for hospital staff, but at least one will focus on the physician's role in documenting POA information, Ms. West says.

She also expects individual hospitals to inform their physicians about the initiative through regular medical staff activities.

Meanwhile, Dr. Holcomb says it's only a matter of time before CMS starts looking for similar data on doctors.

"We know perfectly well that the data ultimately will be used to either penalize or reward doctors," he said. "My advice is to learn how to do it and to start documenting better."

Ken Ortoloncan be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email at Ken Ortolon.  


Audio Conferences to Examine POA Initiative

A series of audio conferences will be launched this month to help hospitals and physicians deal with a new Medicare initiative requiring documentation of conditions that are present when patients are admitted to the hospital.

The audio conferences, developed by the Texas Medical Association, the Texas Hospital Association, and the TMF Health Quality Institute, will review Medicare's present on admission (POA) initiative, as well as explore its impact on reimbursement, public reporting, research, and other issues.

Participants will be able to call a central telephone number to join the conferences. Continuing medical education credit will be awarded for participation.

The scheduled conferences include:

  • An Overview of POA, the Physician Quality Reporting Initiative, and Pay for Performance, Sept. 13;
  • How to Engage Physicians in POA and Pay for Performance, Sept. 27;
  • POA Practical Implementation Issues, Oct. 11;
  • Downstream Impact of POA on Reimbursement, Public Reporting, Research, and Others, Oct. 25; and
  • Case Studies: What Have Hospitals Learned? Jan. 24, 2008.

More details about how to participate in the audio conferences will be available soon in the Practice Management section of the TMA Web site at

Back to article

 Read  AMA's letter [PDF] to the Centers for Medicare & Medicaid Services regarding this Medicare initiative.

See  related article  [PDF] in  MLN Matters.  




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