ACPA Newsletter: Cancelled Surgery – Change the Status?

Dr. Ronald HirschFebruary 9, 2022


The flip flop by CMS on the Inpatient Only List (IOL) has left many with their head spinning, and with good reason. First they remove 298 surgeries from the list, including many where patients always stay over two midnights, leading to education sessions and program redesigns to get status correct. Then CMS says “never mind” and puts most of them back.

 

As a reminder, the IOL only applies to traditional Medicare and not Medicare Advantage plans. The MA plans can elect to follow it but are not required to use it. In fact an MA plan can allow an inpatient only surgery to be done at an Ambulatory Surgery Center. Nope, don’t try to rationalize that. It’s an unexplainable decision by CMS but they make the rules.

 

But the question occasionally comes up about what to do about the status of the patient who is admitted for an inpatient surgery, either inpatient only or not, but then the surgery gets cancelled before being completed. If the inpatient only procedure was not done, should the status be switched to outpatient via condition code 44 or self-denial and rebill?

 

And as usual, the answer is “it depends.” Below I will use examples to describe the common scenarios, noting all are Medicare.

  • Patient scheduled for planned revision total hip arthroplasty, HCPCS 27132. It is on the IOL. Patient stops at registration, is registered as inpatient. The surgeon has sent in their preop orders including an inpatient order and that is activated. The patient signs the paperwork, gets their Important Message from Medicare, goes into the pre-op area and puts on their gown. The RN starts their iv and gets vitals. The patient mentions “oh, by the way, my husband was diagnosed with COVID two days ago.” The RN informs the surgeon who cancels the surgery.

    In this case, the patient has been formally admitted and the surgery is cancelled before being started. The fact the patient’s husband was ill could have been ascertained prior to the patient’s arrival so CMS would say this inpatient admission is inappropriate and you should not bill an inpatient admission. You can change the status to outpatient with the condition code 44 process which would allow billing any services as part B, or you may simply submit a no-pay inpatient 110 claim and get paid nothing. The same would apply if the patient in pre-op said they had a cold or sore throat or were pregnant, all findings that should have been discovered before formal admission.

 

  • Patient scheduled for planned revision total hip arthroplasty, HCPCS 27132. It is on the IOL. Patient stops at registration, is registered as inpatient. The surgeon has sent in their preop orders including an inpatient order and that is activated. The patient signs the paperwork, gets their Important Message from Medicare, goes into the pre-op area and puts on their gown. The RN starts their iv and gets vitals. The patient is taken into the OR. The anesthesiologist induces anesthesia and as the surgeon is preparing the patient, the patient goes into ventricular tachycardia that resolves after 15 beats. The surgeon cancels the surgery and the patient is taken into the recovery room. Cardiology is called, an EKG and labs and an echocardiogram are done. The potassium is 2.9 and is replaced. Her hydrochlorothiazide is stopped. The cardiologist orders a telemetry bed to keep the patient overnight and get a stress test in the am. Testing is negative and the patient is discharged to reschedule their surgery.

    In this case, the patient was formally admitted as inpatient but did not undergo the planned surgery. But surgery did start with induction of anesthesia. But the patient had no incisions and certainly did not get her hip replaced. This would be billed as an inpatient admission. The patient was admitted as inpatient for hip surgery and the surgery began. The principal diagnosis would be osteoarthritis of hip, with ventricular tachycardia and hypokalemia as secondary diagnoses, along with others. But the claim would not include the ICD-10-PCS code for the hip replacement surgery since it was not done. The coders would only code what was done- initiation of anesthesia, EKG, echocardiogram, one inpatient day on a telemetry unit, stress test, etc. The encoder would then assign the appropriate DRG.

 

  • Patient scheduled for knee replacement, HCPCS 27447, not inpatient only. The surgeon scheduled the surgery as inpatient and a written order was provided. The preop documentation notes a healthy patient with a BMI of 28, non-smoker, and no medical issues. They are classed as ASA 2. The surgeon’s patients normally are discharged the day after surgery. The patient arrives, registers, is formally admitted and given the Important Message from Medicare. The surgery commences and anesthesia induced. The patient’s blood pressure starts fluctuating and despite the best efforts of the anesthesiologist, it is determined unsafe to proceed. The patient is awakened, the blood pressure normalizes and the patient is sent to the recovery room. Cardiology is consulted, EKG, echocardiogram, and labs are done. The patient is kept overnight and discharged home.

    In this case, the patient was formally admitted as inpatient for a surgery that is not on the inpatient only list. The surgery was not performed and the patient was discharged the next day. Here, the deciding factor is whether the inpatient admission was appropriate. It appears that there was no documentation to support an inpatient admission for this patient with no documentation of elevated risk, surgical complexity, or the expectation of a two midnight stay. So in this case, inpatient admission was not appropriate. Since the patient has already been discharged, the admission requires review as specified in 42 CFR 482.30(d). In all likelihood, the inpatient admission will be determined to be not appropriate and as a result, a no pay 110 inpatient part A claim will be filed, indicating osteoarthritis as the principal diagnosis with one inpatient day and the other tests listed. The surgery will not be coded. Occurrence span code M1 will be placed on the claim. Once that processes, a 121 inpatient part B claim can be submitted and payment will be made for the payable services.

 

  • A patient is scheduled for a laparoscopic colon resection HCPCS 44208 for a dysplastic polyp. This surgery is inpatient only so the patient is formally admitted. The patient goes into the operating room and surgery is commenced. The surgeon starts the surgery and notes diffuse peritoneal seeding. A frozen section is sent to pathology revealing ovarian cancer. The surgeon then closes the abdomen and the patient goes to recovery. The patient is monitored for 4 hours and discharged home.

    Here the patient commenced surgery and the peritoneum was entered but the colon resection was not performed. An inpatient admission would be billed. The principal diagnosis would be dysplastic polyp of colon and ovarian cancer with peritoneal metastasis would be a secondary diagnosis. The claim would not include the colon resection but would include coding for the incision of the peritoneum and the biopsy. The patient did not spend a night in the hospital but since the intent was an inpatient only surgery, a room charge can be added to the claim per chapter 3, section 40.2.2.K of the Medicare Claims Processing Manual.

As can be seen, the determination of how to bill a surgery that is cancelled is not simple. One needs to consider the initial status order and the validity of that order, along with when the surgery was cancelled and why. Only then can the correct claim be submitted. It should also be noted that scenario 1 could have been avoided if the hospital had a policy that for scheduled inpatient admissions, the inpatient admission does not formally begin until the patient enters the operating room. In that case, the condition code 44 process would not be needed and an outpatient part B claim could be submitted for eligible services. This is outlined in a 2014 article found here.

 

Dr. Hirsch is vice president of regulations and education at R1 RCM Inc.

This article was reprinted from the American College of Physician Advisors Member’s Newsletter. ACPA information can be obtained at www.acpadvisors.org.



Author Bio: Dr. Ronald Hirsch is Vice President of the Regulations and Education Group at R1 RCM Inc. Dr. Hirsch was a general internist and HIV specialist and practiced at Signature Medical Associates, a multispecialty practice located in Elgin, IL. He was Medical Director of Case Management at Sherman Hospital in Elgin, IL from 2006 to 2012, where he was Chairman of the Medical Records Committee from 1995 to 2012, and also served on the Medical Executive Committee. Dr. Hirsch is certified in Health Care Quality and Management by the American Board of Quality Assurance and Utilization Review Physicians, certified in Revenue Integrity by the National Association of Healthcare Revenue Integrity, and on the Advisory Board of the American College of Physician Advisors. He is on the editorial board of RACmonitor.com. He is the co-author of The Hospital Guide to Contemporary Utilization Review, with the third edition published in 2021.



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