Friday, September 8, 2017

Getting Authorization for inpatient hospital visit


The information in this section applies to instate and borderland hospitals. Information regarding out-ofstate hospital authorization requirements can be found in the Out-of-State/Beyond Borderland Providers subsection of this chapter.

All inpatient admissions must be medically necessary and appropriate, and all services must relate to a specific diagnosed condition. In the event that an inpatient stay is deemed medically inappropriate or unnecessary, either through a pre-payment predictive modeling review or a post-payment audit, providers are allowed to submit an outpatient claim for all outpatient services and any inpatient ancillary services performed during the inpatient stay. Elective admissions, readmissions, and transfers for surgical and medical inpatient hospital services must be authorized through the Admissions and Certification Review Contractor (ACRC). The physician/dentist should refer to the Prior Authorization Certification Evaluation Review (PACER) subsection of this chapter for specific requirements.

Medically inappropriate or unnecessary inpatient admissions may be resubmitted as outpatient claims for all outpatient services and any inpatient ancillary services performed during the inpatient stay. When an inpatient claim is deemed medically inappropriate or unnecessary through a pre-payment predictive modeling review or a post-payment audit, hospitals are allowed to submit a hospital outpatient Type of Bill (TOB) 013X for all outpatient services and any inpatient ancillary services performed during the inpatient stay. Examples of services related to medically inappropriate or unnecessary inpatient admission include:

** all elective admissions, readmissions, and transfers that are not authorized through the PACER system;

** admissions or readmissions which have been inappropriately identified as emergent/urgent;

** selected ambulatory surgeries inappropriately performed on an inpatient basis; and

** any other inpatient admission determined to have not been medically necessary. Medicaid does not cover inpatient hospital admissions for the sole purpose of:

** Cosmetic surgery (unless prior authorized)

** Custodial or protective care of abused children

** Diagnostic procedures that can be performed on an outpatient basis

** Laboratory work, electrocardiograms (ECGs), electroencephalograms (EEGs), and diagnostic x-rays

** Observation

** Occupational Therapy (OT)

** Patient education

** Physical Therapy (PT)

** Routine dental care

** Routine physical examinations not related to a specific illness, symptom, complaint, or injury

** Speech pathology

** Weight reduction or weight control (unless prior authorized)

If Medicaid does not cover the services of the physician/dentist or hospital, the physician/dentist or hospital must not bill the beneficiary, a member of the beneficiary's family, or other beneficiary representative.


Elective admissions, all readmissions within 15 days of discharge, continued stays (when appropriate), and all transfers for surgical or medical inpatient hospital services to and from any hospital enrolled in the Medicaid program require authorization through the ACRC. This includes transfers between a medical/surgical unit and an enrolled distinct part rehabilitation unit of the same hospital. All cases are screened using the Medicaid approved Severity of Illness/Intensity of Services (SI/IS) criteria sets and the clinical judgment of the review coordinator. An ACRC physician/dentist makes all adverse decisions. The ACRC performs medical/surgical and rehabilitation admission, readmission, and transfer reviews through the PACER system and assigns PACER numbers.

The attending/admitting physician/dentist or representative is responsible for obtaining the PACER number before admitting, readmitting, or transferring the beneficiary, with exceptions as noted below. (Refer to the Directory Appendix for PACER authorization contact information.) The physician/dentist is responsible for providing the PACER number to the admitting hospital. The PACER number is issued on the day that the admission is approved by the ACRC. This number is valid for the entire medical or surgical admission unless otherwise noted in this section. PACER authorization must be requested prior to the admission of the beneficiary. Physicians/dentists are asked to provide the procedure code(s) when a surgical admission/readmission is requested.

Authorization through the ACRC for the hospital admission does not remove the need for prior authorization (PA) required by Medicaid for specific services. The PA for the service must be obtained before the ACRC authorization is requested.

Approval of an admission only confirms the need for services to be provided on an inpatient hospital basis. Payment for the admission is subject to eligibility requirements, readmission, and third party liability (TPL) reimbursement policy, along with any pre- and post-payment determinations of medical  necessity.

If an admission, readmission, transfer, or continued stay is not approved, MDHHS does not reimburse for services rendered.

Reconsiderations The attending physician/dentist or the hospital may request reconsideration of the adverse determination of the ACRC regarding the need for admission, readmission, transfer, or continued stay. This reconsideration right applies regardless of the current hospitalization status of the beneficiary. Reconsiderations must be requested within three business days of the adverse determination. (Refer to the Directory Appendix for ACRC contact information.) If requested by the ACRC, the provider must provide written documentation. The provider is notified of the reconsideration decision within one business day of receipt of the request or the date of receipt of written documentation. If the initial adverse determination is overturned, the adverse determination is considered null and void. If the initial adverse determination is upheld or is modified in such a manner that some portion of the hospital care is not authorized, the hospital is liable for the cost of care provided from the date of the initial determination, unless this determination is overturned in the Medicaid appeals

Technical Denials If the provider fails to request a PACER number on a timely basis, the provider should make this request as soon as the omission is noted. When the provider contacts the ACRC by telephone with an untimely request, the review coordinator sends the provider a form to complete, explaining the circumstances of the untimely request. If upon review of this written documentation the untimeliness is waived, the case is reviewed for medical necessity and the appropriateness of the admission, readmission, or transfer. If approved, the ACRC gives the provider a PACER number. If the untimeliness issue is not approved, the attending physician/dentist and the hospital are notified in writing within 24 hours of the decision. The physician/dentist or hospital may request further review of the ACRC decision by Medicaid relative to timeliness.

If the ACRC does not authorize the admission or the continued stay for an admission and the beneficiary remains in the hospital for one or more days after Medicaid payment is not authorized, the hospital is at risk of Medicaid nonpayment for those days. The provider may request post-discharge review by the ACRC, regardless of whether reconsideration was requested on the case, in writing within 30 calendar days of the discharge from the hospital. A copy of the medical record must accompany the post-discharge review request.

Post-discharge review is conducted for only those days that were not authorized during the telephone review. The ACRC informs the provider, in writing, of the ACRC decision within 14 calendar days of the receipt of the request and documentation. If some or all of the previously nonauthorized days are approved, a new PACER number is issued and included in the notification of the decision. If the initial adverse determination is upheld, the notification includes the previously issued PACER number. If the provider is dissatisfied with the decision of the ACRC, the decision may be appealed.

The hospital may bill Medicaid only for the days authorized by the ACRC. If the ACRC has made an adverse determination and issued a final PACER number, the hospital  may submit a claim with this PACER number for only the authorized days while the
case is in the reconsideration, post-discharge review, or formal appeals process. Submission of such a claim does not imply acceptance of the ACRC determination.


The following require a PACER number:

** All elective admissions.

** All readmissions within 15 days of discharge (including newborns). [NOTE: If a beneficiary is readmitted to the same hospital within 15 days for a related (required as a consequence of the original admission) condition, Medicaid considers the admission and the related readmission as one episode for payment purposes. The related admissions must be combined on a single claim. No PACER number is issued for continuation of care.]

** All transfers for medical/surgical services to and from any hospital enrolled in the Medicaid program (including newborns).

** Transfers between a medical/surgical unit and an enrolled distinct part rehabilitation unit of the same hospital.

** Authorization of continued stays in freestanding and distinct part rehabilitation units.


The following do not require a PACER number:

** Emergent/urgent inpatient hospital admissions. (All transfers and 15-day readmissions to the same or a different hospital do require PACER through the ACRC.)

** All admissions and transfers to distinct-part psychiatric units or freestanding psychiatric hospitals and all continued stays in a psychiatric unit/hospital. (Authorization must be obtained through the local Prepaid Inpatient Health Plan (PIHP)/Community Mental Health Services Program (CMHSP).)

** Obstetrical patients admitted for any delivery.

** Newborns admitted following delivery.

** Admissions of beneficiaries who are eligible for CSHCS only.
** Medicaid beneficiaries enrolled in a Medicaid Health Plan (MHP). (Authorization must be obtained through the MHP.)

** When a beneficiary is admitted to a hospital that is not enrolled with the Michigan Medicaid Program.

** When a beneficiary becomes Medicaid eligible after the admission, readmission, transfer, or certification review period. (When Medicaid eligibility is determined retroactively, "Retroactive Eligibility" must be entered in the Remarks section of the inpatient hospital claim.)

** Medicare Part A beneficiaries.

** Commercial insurance coverage for admissions, readmissions, transfers, or continued stays.


To be separately reimbursable, all readmissions (whether to the same or a different hospital) for hospital services must be prior authorized through the ACRC. The request for a PACER number for an elective readmission, whether to the same or a different hospital, must be made prior to readmission. The request for a PACER number for an emergent/urgent readmission to the same hospital must be made by the next business day following the readmission. The request for a PACER number for an emergent/urgent readmission to a different hospital must be made prior to the beneficiary's discharge from a transferring hospital. Medicaid defines readmission, for purposes of review, as any admission/hospitalization of a beneficiary within 15 days of a previous discharge, whether the readmission is to the same or a different hospital.

If the hospital intends to combine an admission and a readmission into a single episode for DRG payment purposes, the ACRC should not be contacted for a separate PACER number for the readmission.

Before contacting the ACRC, the provider should assemble as much information as possible regarding the medical condition of the beneficiary upon the first discharge and at the time of the readmission. When contacted for a PACER number, the ACRC either:

** Agrees that the original admission and the readmission are unrelated, as well as medically necessary, and issues a PACER number so that the stays may be billed and paid separately by the same hospital;

** Authorizes a readmission to a different hospital as medically necessary and issues a PACER number;

** Asks the caller to obtain additional information and call back no later than the next business day; or

** Questions the relatedness of two stays at the same hospital or the medical necessity for the readmission and refers the call to a physician/dentist advisor who may issue or deny a PACER number.

If a PACER number is not provided for a readmission due to relatedness (required as a consequence of the original admission), the hospital must combine the two stays into a single episode for DRG payment purposes (using the Leave of Absence revenue code 0180 for the time between discharge and readmission), or request reconsideration of the ACRC physician/dentist advisor's decision within three business days. If the initial admission has already been billed, the hospital must submit a claim
replacement to combine the two stays.

If it is determined a readmission is medically unnecessary, the hospital may only bill for the first admission.


If a beneficiary needs to be transferred, authorization for the transfer must be obtained through the ACRC. Authorization for a transfer is granted only if the transfer is medically necessary and the care or treatment is not available at the transferring hospital. Transfers for convenience are not considered.

Transfers include the following situations:

** Transfer from one inpatient hospital to another.

** Transfer from one unit of an inpatient hospital to another unit of the same hospital (i.e., distinctpart rehabilitation unit).

The following describes the appropriate requestor and timeframes for transfer authorization:

** Elective transfers – the transferring physician/dentist or designee must obtain authorization prior to transfer.

** Emergent/urgent transfers – the authorization must be obtained by the transferring physician/dentist no later than the next business day, or by the receiving physician/dentist or hospital before discharge.

If the transfer is approved, a PACER number is issued. The receiving hospital must use this PACER number when billing. The transferring hospital continues to use the original PACER number if a PACER number was required for the admission.

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