Wednesday, September 18, 2013

Be Careful When Using Condition Code 42 When Transferring a Patient Back to Home Health

Please share with Directors of DIM and Discharge Planning

MCare Solutions reviews large volumes of billed Medicare discharges for proper payment under the Transfer Payment Rule.  Generally speaking, the majority of these discharges are roughly split between home health and skilled nursing.  Lately we have noticed the frequent use of discharge status code 06 (transfer to home health) along with condition code 42 (CC42). (This combination of codes would be used when an acute care episode occurred in the middle of a home health episode and the patient was being transferred back to home health.)  Using CC42 indicates to CMS that the reason for the acute stay and the reason for receiving home health services are not related and that the acute provider should receive a full DRG payment.  Since there are no bill edits for this combination of codes, it is extremely important that the use of these codes be correct. 
What is the rule or guideline that the provider would use to properly determine whether acute and home health services are related?
MCare turned to our healthcare attorney at Arnall, Golden, Gregory to research the issue for us.  Their findings provide a concise course of action that our clients can follow to ensure that they are complying with CMS requirements in this matter.  MCare would like to share these findings with you.
When there has been a “Hospital Interlude”, must the hospital always consider the subsequent home health care “related” to the hospitalization? 
No!  In fact, because patients who are admitted to hospitals during home health episodes may have multiple, distinct medical conditions, Hospital Interludes might actually be more likely to result in the appropriate use of condition code 42 than situations involving patients admitted to hospitals directly from home.  Condition code 42 asks whether the hospital’s continuing care plan at the time of discharge calls for the provision of services unrelated to the condition responsible for the patient’s admission to the hospital.  Patients who are admitted while in the middle of a home health care episode may require additional treatment after their hospital stay for the same medical issue that was being treated by home health care prior to their hospital admission, and this medical issue could be distinct from the condition responsible for the patient’s hospitalization.
For instance, if someone receiving home health care for mobility issues due to a hip fracture is admitted to an acute care facility for the treatment of pneumonia, and then is subsequently discharged to home health for mobility issues related to the hip fracture, then condition code 42 would be appropriate, as the pneumonia stay should not be subject to the post-acute transfer policy.   

If not, what criteria should be applied in determining whether condition code 42 is appropriate? 
Hospitals are responsible for deciding whether the home health care the patient is to receive as part of the hospital’s discharge plan is related to the condition responsible for the inpatient hospital admission.  In making that determination, the services called for in the hospital’s continuing care plan should be compared with the patient’s primary diagnosis – not the secondary diagnoses listed on the hospital bill.  If any of the services called for in the hospital’s discharge plan are related to the condition indicated by the hospital’s primary diagnosis, then condition code 42 should not be used. 
Hospitals are not expected to compare home health bills to hospital bills in order to determine relatedness between the two providers’ treatment.  However, whenever hospitals use condition code 42, they are expected to have documentation in the patient's record supporting their decision to use the condition code.

The Post-acute Transfer Policy Focuses on Hospitals’ Principal Diagnosis
Given that the post-acute care transfer policy is either applicable or inapplicable based on the hospital’s principal diagnosis code, the question of relatedness between the home health treatment and the prior hospital stay would also seem to be limited to the condition indicated on the principal diagnosis for the patient.  This is consistent with CMS’ use of the phrase “purpose of the inpatient hospital admission” when describing condition code 42 (since hospitals are instructed by coding rules to code as principal the condition that required the hospital admission), as well the fact that CMS’ overall discussion in the preamble to the post-acute transfer rule focuses on a hospital’s “principal” diagnosis.

CMS did not intend for the post-acute transfer policy to apply whenever any of the services provided during a home health episode are related to any of the services provided during the prior hospital stay.  Rather, CMS’ focus when it created the post-acute transfer policy was on the principal diagnosis and whether continued treatment related to that diagnosis is required upon discharge.


Condition code 42 can be used for Hospital Interludes.  CMS anticipates that Hospitals will look to the patient’s record (particularly the continuing care plan) to determine whether the hospital’s discharge plan called for services separate and distinct from the condition responsible for the patient’s hospitalization.  If the record demonstrates that the patient was discharged to home health for reasons unrelated to the condition responsible for her hospitalization, then condition code 42 is appropriate.

For a copy of the complete opinion, including cited references and examples of CC42 use, please click here.


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