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2012 Texas Medicaid Provider Procedures Manual

Inpatient and Outpatient Hospital Services Handbook : 3. Inpatient Hospital (Medical/Surgical Acute Care Inpatient Facility) : 3.6 Inpatient Utilization Review : 3.6.1 Utilization Review Process

The inpatient UR process for admissions reimbursed under the DRG prospective payment system consists of sampling medical records of paid Medicaid claims. The review process consists of three major components:
Admission review. Determination of the medical necessity of the admission. For purposes of the Texas Medical Review Program (TMRP) and TEFRA, medical necessity means the client has a condition requiring treatment that can be safely provided only in the inpatient setting.
Quality review. Assessment of the quality of care provided to determine if it meets generally accepted standards of medical and hospital care practices or puts the client at risk of unnecessary injury or death. Quality of care review includes the use of discharge screens and generic quality screens.
DRG validation. Determination that the critical elements necessary to assign a DRG are present in the medical record and the diagnosis and procedures are sequenced correctly. The critical elements are age, sex, admission date, discharge date, discharge status, principal diagnosis, secondary diagnoses (complications or comorbidities), and principal and secondary procedures.
The HHSC OIG UR Unit staff reviews the complete medical record to make decisions about the medical necessity of the admission, validity of the DRG, and quality of care. The medical record must reflect that any services reimbursed by Texas Medicaid were ordered by a physician, certified nurse-midwife, or nurse practitioner.
Effective for dates of admission on or after September 1, 2006, the HHSC OIG UR Unit uses evidence-based guidelines to assist in performing retrospective UR of inpatient hospital claims for Medicaid clients. The evidence-based guidelines are Milliman Care Guidelines, which replace the physician-developed and physician-approved Medicaid hospital screening criteria addressed through a rule revision effective August 1, 2006. Reviews required by the TMRP, TEFRA, and the current LoneSTAR Select II contracting program are included.
All services, supplies, or items submitted are medically necessary for the client’s diagnosis or treatment as certified on claim submission.
Refer to:
Subsection 1.5.8, “Provider Certification/Assignment,” in Section 1, “Provider Enrollment and Responsibilities” (Vol. 1, General Information).
When an admission denial or a denial of continued stay is issued, or when a technical denial becomes final, all money is recouped from the hospital for the admission or days of stay that are denied. When a DRG is reassigned as a result of UR, the payment to the hospital is adjusted.
If an inpatient admission is denied, but a physician’s order is present documenting the client originally was placed in observation, the UR unit may authorize the resubmission of services rendered during the first 48 hours on an outpatient claim.

Texas Medicaid & Healthcare Partnership
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