Hospital Inpatient Admission Decisions: CMS Issues Guidance

Inpatient acute care hospital billing staff need to make sure medical documentation submitted demonstrates evidence of the clinical need for patients to be admitted and that it fully and accurately identifies any subsequent care provided during that stay. The Centers for Medicare & Medicaid Services (CMS) recently issued guidance to all staff involved with the clinical decision to admit patients. It's essential, states CMS, that responsible inpatient hospital staff stay abreast of all related national and local policies. (SE1037, which contains this information, is available at

According to CMS, some hospital staff members are concerned about how Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs), Fiscal Intermediaries (FIs), and the Comprehensive Error Rate Testing (CERT) contractors are using screening criteria (such as Interqual) to analyze medical documentation to determine whether inpatient hospital claims are medically necessary. In the memo, CMS explains how claims are reviewed for appropriate inpatient admissions and summarizes the resources that hospital staff may use to understand inpatient admission decisions.

CMS noted that contractors use other criteria (besides screening criteria) to determine whether an inpatient hospital claim meets medical-necessity requirements. In addition to Medicare coverage guidelines, they also use admission, invasive procedure, and published CMS criteria as well as practice guidelines that are well-accepted by the medical community.

According to CMS, contractors ask questions such as the following during their reviews:

  • Was the inpatient hospital care medically necessary, reasonable, and appropriate for the diagnosis and the beneficiary's condition during the stay?
  • Were there any pre-existing medical problems or extenuating circumstances that made the beneficiary's admission medically necessary?
  • Were the beneficiary's signs and/or symptoms severe enough to warrant the need for medical care?
  • Did the beneficiary receive services of such intensity that they can be furnished safely and effectively only on an inpatient basis?

Inpatient care, rather than outpatient care, is required only if the beneficiary's medical condition, safety, or health would be significantly and directly threatened if that care was provided in a less intensive setting. Without accompanying medical conditions, factors that would only cause the beneficiary inconvenience in terms of time and money needed to care for the beneficiary at home or for travel to a physician's office, or that may cause the beneficiary to worry, do not justify a continued hospital stay.

Appropriate Admission