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Based on document review and staff interview, the facility failed to ensure physicians followed specific clinical criteria for admission to observation status. Physicians admitted patients to observation status based on the expected length of the patients' stay, for 8 of 8 selected patients ' out of 77 patients in the prior 6 months where the patient was initially admitted to the facility as an observation patient, and later transitioned to an acute admission. (Refer to C-211)

The cumulative effect of this systemic problem resulted in the patients at the facility potentially having to pay a 20% coinsurance payment for the observation stay and the cost of all the medications administered during the observation stay. If the patient required admission to skilled care, the observation stay did not count towards the length of stay required to allow a patient admission to skilled care. Furthermore, the cumulative effect of this systemic problem resulted in the facility's inability to comply with the limits on the length of acute patient stays.

Based on document review and staff interview, the facility failed to follow specific clinical criteria for the admission of 8 of 8 sampled patients who started their admission to the facility as an observation patient, and the physician then admitted the patient as an acute inpatient. The facility identified 236 patients admitted as observation patients in the prior 6 months for non-obstetrical reasons, and 77 patients who the physician admitted to observation status and then admitted as an acute inpatient.

Failure to admit a patient to the appropriate level of care initially could result in the patient not receiving the appropriate level of monitoring and care. It could also result in the patient having to pay a greater share of the cost of the hospital admission, and affect the patient's ability to meet the 3 day length of stay requirement for skilled care.

Findings include:

1. During an interview on 2/20/13 at 12:00 PM, the Inpatient Director stated the physicians at the facility could admit patients to acute inpatient (actual hospitalization) or observation (where a patient was considered an outpatient, subject to a higher insurance deductible, and the patient's insurance doesn't pay for medications) status. The physicians had to follow the Milliman Guidelines to determine if the patient qualified for acute or observation status at the facility.
The Inpatient Director stated if a physician admitted the patient to observation status, the observation status gave the physician time to try to determine a patient's medical problems in the facility. Normally patients stayed in observation status for 1 day, but could stay in observation status for a maximum of 2 days. The facility's physicians only rarely placed patients in observation status.

2. Review of a document listing all patients admitted to the facility from August 2012 through January 2013 revealed the facility's physicians admitted a total of 400 patients to the facility during the 6 months. Of the 400 patients admitted to the facility, the physicians admitted 236 patients with non-obstetrical complaints (any complaint not related to a pregnancy) to observation status during the 6 month period. 39 percent of all the patient admitted to the facility consisted of patients on observation status with non-obstetrical complaints.

Further review revealed the facility identified 77 patients admitted as an observation patient (where a patient was considered an outpatient, subject to a higher insurance deductible, and the patient's insurance doesn't pay for medications), then had their admission status changed to an inpatient admission (with a lower deductible for the patient, and the insurance company pays for medications administered to the patient). The physicians admitted 33 percent of all the non-obstetrical observation patients to acute status during the 6 month period.

The document revealed 22 patients stayed in the facility for a combined total (observation and acute) of 7 or more calendar days (the facility was limited to an average length of stay for patients of 4 days, with the observation stay not counting towards the 4 day limit). Of the patients admitted to observation and acute status, 29 percent of the patients went on to have a stay of 7 or more calendar days.
3. During an interview on 2/20/13 at 1:30 PM, the Case Manager stated the Milliman Guidelines were a set of clinical criteria used nationally to help ensure the patients received the correct level of care at facilities. The Milliman Guidelines contained sets of specific clinical criteria for a patient's main medical problem to allow the physician and case manager to determine if the patient required observation care, or would require an acute admission to the facility.

4. Physician interviews revealed the following

a. during an interview on 2/20/13 at 12:45 PM, Family Practice Physician (FPP) A stated they did not have specific clinical criteria to determine if a patient warranted admission to observation status or an acute admission status. He knew a patient was required to fail outpatient therapy, or if the physician thought they could discharge a patient in 24-48 hours, they needed to admit the patient to observation status. The decision to admit a patient to observation or an acute admission status was based on if the patient had failed outpatient therapy. Since FPP A did not have specific clinical criteria, he relied on his clinical judgment to determine if a patient needed an observation level of care or an acute level of care.

b. during an interview on 2/20/13 at 5:05 PM, FPP D stated she did not know the Milliman Guidelines. She knew the facility relied on clinical guidelines, but did not know what the guidelines contained. If she questioned if a patient required admission to observation or acute status, she would call the Case Manager. If the Case Manager was not available, FPP D relied on her clinical judgment.

c. during an interview on 2/20/13 at 1:45 PM, FPP F stated he did not know the Milliman Guidelines. He relied on the Case Manager to inform him if a patient required an observation or acute level of care. FPP F relied on his clinical judgment to determine if a patient required 24 hours or less of inpatient care, and if he felt he could treat and discharge a patient within 24 hours, he admitted the patient to observation status.

Since the patient received the same care by the nursing staff if he admitted the patient to observation or acute care, he would preferentially admit the patient to observation care, unless he knew the patient would require 3 or more days of treatment.

d. FPP G stated he relied on his education and clinical judgment to determine if a patient required observation status, defined as a short admission less than 48 hours, or if a patient would require an acute admission of greater than 48 hours.

5. Review of the policy "Observation Patients", reviewed 10/12, revealed the facility allowed physicians to admit patients to observation (outpatient) status for continued evaluation in the facility. However, the policy did not allow physicians to admit the patient to observation status simply due to the fact the physician believed the patient would only require 24-48 hours of inpatient care at the facility.

6. During an interview on 2/20/13 at 1:30 PM, the Case Manager stated if a patient had not attempted outpatient therapy and failed to improve, the physician should place the patient in outpatient status to see if the patient would improve within 24 hours. If the patient improved in 24 hours, the physician could discharge the patient from the facility. If the patient did not improve 24 hours, the physician could admit the patient to acute status, since the patient had failed to improve in observation status (where the patient was considered an outpatient).
7. During an interview on 2/20/13 at 12:45 PM, FPP A stated a patient had to fail outpatient treatment (where the patient received oral medications, and the medications failed to improve the patient's condition) before he could admit a patient to acute status. If a patient had not failed outpatient treatment, FPP A had to admit the patient to outpatient care, and wait 24-48 hours. After the patient was in the facility for 24 hours, FPP A could switch the patient to acute status, since they had not improved enough for FPP A to discharge the patient from the facility.

8. Review of medical records revealed:

a. Patient #1 was admitted to observation status on 1/16/13 with a diagnosis of nausea and vomiting. FPP A admitted Patient #1 to acute status on 1/17/13. FPP A wanted to administer intravenous (directly into a vein) antibiotics to Patient #1, intravenous fluids, and start medications to reduce Patient #1's nausea. FPP A documented he wanted 48 hours to observe Patient #1, prior to admitting them into acute status.

The Case Manager documented in Patient #1's medical record on 11/29/12 at 5:48 PM they spoke with Patient #1's family member after the family member requested FPP A change Patient #1 to acute status since Patient #1 would be charged for the medications in the facility. The Case Manager informed the family member Patient #1 had not tried outpatient therapy and failed to improve, so FPP A had to admit Patient #1 to observation status.

During an interview on 2/20/13 at 12:45 PM, FPP A stated Patient #1 presented to the ED on 1/16/13. Patient #1 had a predisposition to kidney infections, and lived at a nursing home. Patient #1's predisposition to kidney infections caused the patient to get sick quickly when starting to develop a kidney infection. The nursing home staff would take Patient #1 to the ED, and the ED Physician would admit Patient #1 to the hospital for intravenous antibiotics. When the ED Physician directly admitted Patient #1 to the hospital, FPP A did not get a chance to try outpatient treatment with Patient #1. Since Patient #1 had not received outpatient treatment, FPP A could not admit Patient #1 to acute status, even though FPP A knew Patient #1 would require acute status care, since Patient #1 had not attempted outpatient care and failed to improve.

FPP A stated, "This is a patient at the nursing home, and with [him/her], we didn't get a chance to do outpatient treatment. So we initially admit [him/her] to observation [status], and in 24 hours flip [him/her] to an acute admission."

b. ED Physician C admitted patient #2 to observation status on 12/24/12 with an admitting diagnosis of acute pancreatitis (a very painful inflammation of the pancreas, an organ that produces enzymes used to digest food). ED Physician C admitted Patient #2 with a Patient Controlled Analgesia (PCA, a device used to administer strong pain medications into a patient's intravenous line, and controlled by the patient) machine to administer hydromorphone (a very strong medication used to relieve pain). On 12/25/12 at 10:46 AM, FPP D ordered Patient #2 to receive extended observation status (24 hours more hours beyond the initial observation status, for a total of 48 hours in outpatient observation status). On 12/26/12 at 8:46 AM, FPP D admitted Patient #2 to acute inpatient status.

During an interview on 2/21/13 at 7:30 AM, ED Physician C stated if they admitted a patient to the hospital for pain control with a PCA machine, they would assume the patient would require more than 24 hours to recover from the illness.

During an interview on 2/20/13 at 5:05 PM, FPP D stated she did not recognize the Milliman Guidelines, and did not know how to apply them to Patient #2's care. Additionally, FPP C stated "if you put someone in [the hospital] with a PCA [machine], of course you are going to keep them longer than 24 hours."

c. FPP E admitted Patient #3 to observation status on 1/5/13 at 4:16 PM. FPP E documented in the Admitting History and Physical assessment Patient #3 was unable to walk, had a urinary tract infection, and required intravenous antibiotics. FPP E ordered Patient #3 to receive extended observation care on 1/6/13 at 3:19 PM. FPP E admitted Patient #3 to acute admission status on 1/7/13 at 6:41 AM.

During an interview on 2/21/13 at 8:45 AM, FPP E stated he admitted Patient #3 to see if he could treat Patient #3 in 24 hours and then discharge Patient #3. FPP E acknowledged they did not intend to gather any additional information about Patient #3's condition, and instead used observation as a short inpatient admission.

d. FPP F admitted Patient #4 to observation status on 1/15/13 at 3:59 PM, with an admitting diagnosis of Congestive Heart Failure (a disease where the heart looses its ability to effectively pump blood, and fluid builds up in the legs and lungs). FPP F ordered Patient #4 to receive extended observation care on 1/16/13 at 7:58 AM. In a note dictated at 7:59 AM on 1/16/13, FPP F diagnosed Patient #4 with pneumonia, after reviewing an x-ray test on Patient #4. On 1/16/13 at 8:48 PM, FPP F admitted Patient #4 to acute inpatient status for pneumonia.

During an interview on 1/15/13 at 8:15 AM, FPP F stated he saw Patient #4 in his office. When Patient #4 walked into FPP F's office, Patient #4 could barely walk down the hall, due to extreme shortness of breath, and almost fell in the hallway. FPP F stated he relied on his clinical judgment to admit Patient #4 to observation status originally. FPP F stated he wanted to administer intravenous antibiotics to Patient #4 for 24 hours to see how Patient #4 would respond, and did not admit Patient #4 to observation status to obtain additional clinical information to determine if Patient #4 required acute inpatient admission.

e. FPP E admitted Patient #5 to observation status on 1/15/13 for unrelieved back pain, and ordered the nursing staff to place Patient #5 on a PCA machine with Demerol (a strong pain relieving medication). FPP E documented in the admission History and Physical assessment they admitted Patient #5 for pain control. FPP E admitted Patient #5 to an acute inpatient admission status on 1/16/13 at 8:38 PM.

During an interview on 2/21/13 at 8:45 AM, FPP E stated they admitted Patient #5 to the facility for pain control measures. FPP E stated he hoped to discharge Patient #5 within 24 hours. FPP E acknowledged the reason he admitted Patient #5 to an acute inpatient status was because of an incidental finding, and he did not initially admit Patient #5 for further diagnostic testing. FPP E acknowledged he admitted Patient #5 to observation status for a short inpatient admission, instead of an acute admission.
f. FPP G admitted Patient #6 to the facility on 1/9/13 at 5:12 PM with a diagnosis of difficulty breathing and weakness. FPP G dictated in the admission History and Physical note he admitted Patient #6 to the facility to see if Patient #6 would improve with intravenous antibiotics. On 1/10/13 at 1:28 PM, FPP A ordered Patient #6 to receive extended observation care for intravenous antibiotics. On 1/11/13 at 5:15 PM, FPP A dictated a note stating Patient #6 had failed observation treatment, and required an acute inpatient admission, and FPP A had admitted Patient #6 to an acute admission status on 1/11/13 at 1:16 PM.

During an interview on 2/21/13 at 9:10 AM, FPP G stated he saw Patient #6 in his office for FPP A. FPP G admitted Patient #6 to observation status to have the nursing staff administer intravenous antibiotics to Patient #6 for 24 hours, and see if he could discharge Patient #6 at that point. FPP G placed Patient #6 into observation status because he wasn't sure if FPP A would switch Patient #6 to acute admission status. FPP G stated because Patient #6 could require intravenous antibiotics, Patient #6 could possibly require more than 48 hours of stay at the facility, and require admission as an acute patient. FPP G acknowledged he did not admit Patient #6 for further diagnostic tests, but admitted Patient #6 to observation status for a short inpatient admission, instead of an acute admission.

g. FPP A admitted Patient #7 to observation status on 10/3/12, with a diagnosis of shortness of breath and fever. In the admitting History and Physical examination, FPP A dictated he was admitting Patient #7 to the facility for intravenous steroids (to reduce inflammation in Patient #7's lungs), and intravenous Lasix (a medication to remove fluid from Patient #7's body). On 10/4/12, FPP A dictated a note stating he decided to change Patient #7 to an acute admission.

During an interview on 2/20/13 at 12:45 PM, FPP A stated he admitted Patient #7 to the hospital for FPP F. FPP A stated he thought Patient #7 had a viral illness. He thought he could have the nursing staff administer the intravenous steroids and inhaled medications to Patient #7, and discharge Patient #7 from the facility in 48 hours (the extent of observation). FPP A acknowledged he admitted Patient #7 for a short inpatient admission to observation status, and did not admit them to acute status.

h. FPP A admitted Patient #8 to observation status on 9/28/12 at 11:38 for telemetry monitoring (where nurses constantly monitor the patient's heart rhythm) and intravenous fluids, with a diagnosis of dehydration and nausea/vomiting/and diarrhea. On 9/28/12 at 8:17 AM, FPP A admitted Patient #8 to an acute admission status with a diagnosis of a small bowel obstruction (when a part of the digestive system stops moving food through the system).

During an interview on 2/20/13 at 12:45 PM, FPP A stated he admitted Patient #8 for a short inpatient admission, and placed Patient #8 in observation status because FPP A thought he could discharge Patient #8 within 48 hours for an observation admission. FPP A did not admit Patient #8 to observation for continued assessment, but admitted Patient #8 to observation due to the expected short duration of the inpatient admission.

9. FPP F stated the insurance companies preferred the physicians to place the patient in observation status for 24 to 48 hours, and then switch the patient to inpatient status if the patient continued to need hospitalization.

10. FPP G reported a situation when he first arrived at the facility to practice as a physician, and an insurance company denied payment for an acute admission. After discussing the situation with the insurance company, he was advised to consider putting patients into observation status. FPP G stated after the conversation, he was more likely to place a patient into observation status than an acute admission right at the start of a patient's stay in the facility.

11. During an interview on 2/26/13 at 7:52 AM, the Case Manager stated when an insurance company denies payment to the facility, especially for a patient admitted to the facility, all the physicians become aware, since the facility must write off the lost revenue from the admission.