Inpatient hospital authorization (IHA) is required for certain admissions to ensure all inpatient hospital services paid under Minnesota Health Care Programs (MHCP):
An approved inpatient hospital authorization (IHA) determines a member’s need for inpatient services, not his or her eligibility.
MHCP requires providers to request IHA and obtain approval from a medical review agent before submitting claims for inpatient hospital services.
Providers may not seek payment from the member for inpatient hospital services for which an IHA is required but not issued.
Submit authorization requests and required documentation to the Authorized Medical Review Agent.
Although most admissions are exempt from IHA, the member must require the level of care or the intensity of service provided to an inpatient. For inpatient services requiring IHA, the admitting provider must request an IHA from the medical review agent any time before you submit the claim.
The medical review agent determines medical necessity of inpatient hospital services based on a thorough review of the patient’s medical condition(s) or records. This review is in conjunction with an industry standard evidence-based clinical decision tool.
A determination that inpatient hospital services are medically necessary is not a guarantee of payment. For MHCP to pay for services, the provider must meet all state and federal requirements of an MHCP provider for inpatient services.
To determine medical necessity for inpatient admission for detoxification, refer to Guidelines for Inpatient Hospital Detoxification at the end of this section. Medical management is based on the clinical needs of the patient and may occur on a medical or psychiatric unit, as determined by the physician.
The following admissions require IHA:
The following admissions are excluded from inpatient hospital authorization requirements:
Members under 21 years old at the time of admission who are hospitalized in an Institution for Mental Diseases (IMD) require completion of a Certificate of Need per 42 CFR 441 subp. D.
An admitting physician or hospital must obtain an IHA from the medical review agent when a member’s admission falls into a group that requires authorization found on the Admissions Requiring IHA list above.
Providers can request an IHA in writing, by telephone or by fax. Refer to Medical Review Agent Information. Faxed requests for IHA must follow the format and order specified in the following list of required information.
The admitting physician or hospital must provide the following information to the medical review agent:
To assist in the IHA process, complete the MHCP Inpatient Hospital Authorization Form (DHS-4676) (PDF) before contacting the medical review agent for IHA. For admissions that require IHA, using the form will help ensure that the necessary information is available when contacting the medical review agent.
If the medical review agent determines that the admission is medically necessary, they will issue an IHA number. You will be able to use each IHA number once and only for the admission requested on the claim for that admission.
The admitting physician or hospital that obtains IHA must inform all other providers of inpatient hospital services of the IHA number. Include the IHA number on claims submitted for inpatient services.
If the nurse reviewer for the medical review agent is unable to determine medical necessity, the reviewer will refer the case to a medical review physician. If the medical review physician determines that the admission is medically necessary, the medical review agent will issue an IHA number.
If the medical review physician determines that the admission is not medically necessary, or is unable to determine if the admission is medically necessary, the medical review agent will notify the admitting physician or hospital by telephone. The provider may request, within 24 hours of notification, a second medical review physician's opinion.
If the admitting physician or hospital requests a second physician opinion, the medical review agent will contact a medical review second physician. If the second medical review physician determines that the admission is medically necessary, the medical review agent will issue an IHA number. The second medical review physician will make the determination within 24 hours exclusive of weekends and holidays.
If the second physician determines that the admission is not medically necessary or is unable to determine medical necessity, the medical review agent will deny IHA. The medical review agent will notify the admitting physician of the denial by telephone within 24 hours. The medical review agent will send a written notice of the determination to the hospital and admitting physician within five working days of the denial.
If the inpatient admission is denied prior to services being provided, a written notice of the denial that clearly states the reason for the denial is sent to the admitting physician, the hospital and the member. The member also receives notice of his or her appeal rights. The physician and hospital will receive notice of their right to request reconsideration.
Only a medical review physician can deny inpatient hospital services for not meeting medical necessity.
The admitting physician and hospital may request reconsideration of a decision to deny an inpatient hospital authorization by submitting the reconsideration requests according to the medical review agent within 30 days of notification of the denial.
The reconsideration request must include the following:
Reconsideration requests must:
The outcome of the reconsideration is the majority opinion of the physician advisers. The admitting physician and hospital may appeal the reconsideration decision to the Commissioner of the Department of Human Services.
Submit appeal requests in writing within 30 days of the date of receipt of the certified letter upholding the denial or withdrawal of IHA and sent to:
Minnesota Department of Human Services
Appeals and Regulations Division
Attn: Administrative Law Manager
444 Lafayette Rd. N.
St. Paul, MN 55155-3841
The admitting physician and hospital may appeal the commissioner's decision to the district court of the county in which the admitting physician or hospital is located by submitting written notice to the commissioner within 30 days of the commissioner's decision.
The medical review agent or DHS may conduct concurrent, continued stay and retrospective reviews. The medical review agent will determine medical necessity of inpatient hospital services, including inpatient psychiatric treatment, based on a review of the patient's medical condition and records, in conjunction with industry standard evidence-based criteria.
When determining medical necessity for inpatient hospital services, the medical review agent will follow industry standard medical necessity criteria to determine medical necessity for the following:
They will consult a medical review physician adviser if the medical record and other supporting information do not clearly demonstrate the medical necessity of the admission, continued stay, services provided or the reasons for the member's discharge and readmission.
If an admission was determined to be not medically necessary, or the medical record does not adequately document that the admission was medically necessary, DHS may deny or recover all or part of the MHCP payment to the admitting physician, hospital and other providers of inpatient hospital services.
If admission IHA is denied or if the medical review agent determines that the admission did not meet inpatient criteria, you may bill the services as outpatient observation hospital services only if the following apply:
The medical review agent may retrospectively review the medical records of inpatients readmitted to the hospital. The initial admission and the readmission are reviewed to monitor quality of care (for example, under-utilization of services, fragmented care, premature discharge), to determine if payment should be made for one or both hospitalizations, or if payment should be made according to transfer payment established by Minnesota rule. If a readmission is denied because it is considered continuous with the previous admission, reconsideration may be requested.
Medical records with clearly documented situations of patient preference, AMA (leaving hospital against medical advice), patient noncompliance, physician or hospital convenience, or scheduling conflicts will not be sent through physician review. Situations of episodic illness (same or different episode) or prevailing medical standards, practice, and usage will be sent to a medical review physician if the medical review agent cannot make a determination or the provider disagrees with the determination.
Medical records of an admission must clearly state the following:
Medical records of a readmission must clearly state the following:
Criteria used to determine whether a readmission is considered a second admission, as continuous with the first admission, or eligible for transfer payment are as follows.
The medical review agent determines both the admitting and readmitting hospitals, whether they are the same or different, retains their IHA numbers or, if IHA was not required, retains payment. A second admission is a readmission that resulted from one of the following circumstances:
Continuous with the initial admission
The medical review agent informs the hospital of the need to combine admissions.
A readmission that is continuous with the initial admission is the result of one of the following circumstances:
Eligible for transfer payment
The medical review agent determines that MHCP will make payment to each hospital as a transfer payment, according to the transfer payment established in the payment rule for the inpatient hospital services necessary for the member’s diagnosis and treatment.
An “eligible for transfer payment” is an inpatient discharge followed by a readmission that resulted from one of the following circumstances:
Certification and recertification requirements apply only to MA members as stipulated in the Code of Federal Regulations (CFR). These requirements are included in the following section.
Certification of Need for Care
A physician, physician assistant or nurse practitioner, acting within the scope of practice as defined by state law and under the supervision of a physician, must verify a member's need for continued placement at an inpatient hospital level of care. The initial certification consists of the admitting physician’s written order and plan of care documented in the medical record.
Members under 21 years old at the time of admission who are hospitalized in an Institution for Mental Diseases (IMD) require certification of need for services (PDF).
Recertification of Need for Care
Providers must complete recertification at least every 60 days after the admission.
To be valid, the recertification must be:
Providers may complete the recertification in the progress notes at the time of a multidisciplinary team meeting or by completing the Inpatient Hospital Recertification (DHS-1931) (PDF).
If the member is not covered under MA on the date of admission, but applies during the hospital stay and is approved, the 60-day recertification period begins on the day the county approves the MA eligibility.
If recertification of a member's need for inpatient hospital services was required but was not documented in the medical record, the medical review agent must deny that portion of the admission that was not recertified (Minnesota Rule 9505.0525, subp. 10F).
When billing for inpatient hospital services, enter the IHA number in the Authorization/Certification field on the Claim Information tab in MN–ITS.
An inpatient claim will deny for payment if the admission requires IHA but the IHA number is not included on the claim or the IHA number was included on another claim that paid.
An inpatient claim that includes an authorization number but IHA is not required will be processed as if the number was not included on the claim.
If an IHA number and a medical authorization number are issued, the IHA number must be the first number entered in FL-63.
If admission IHA is denied, patient billing is prohibited.
Admission: The time of birth at a hospital or other act that allows the member to officially enter a hospital to receive inpatient hospital services under the supervision of a physician who is a member of the medical staff.
Admitting Physician: The physician who orders the member's admission to the hospital.
Authorization Number: The number the medical review agent issues that establishes that all or part of the inpatient hospital services are medically necessary.
Certification of Need for Care: Admitting physician or hospital providing services certifies the admission to the hospital in the medical record; a physician, physician assistant or a nurse practitioner dates and signs it.
Concurrent Review: A medical record review completed to determine medical necessity of inpatient hospital services while the member is in the hospital. The review consists of admission review, continued stay review, and, when appropriate, procedure review.
Continued Stay Review: A review and determination of the medical necessity of continued inpatient hospital services during a member's hospitalization.
Diagnostic Categories: The diagnostic classifications established under Minnesota Statutes 256.969, subd. 2, containing one or more Medicare diagnosis related groups (DRGs).
Diagnostic Category Validation: The process of comparing documentation in the medical record to the information submitted on the inpatient hospital billing form to determine the accuracy of the information upon which the diagnostic category was assigned.
Diagnosis Related Groups (DRGs): An inpatient classification, which provides a way to relate the type of patients a hospital treats to the costs incurred by the hospital in order to establish prospective payment rates.
Inpatient Hospital Authorization (IHA): The determination by the medical review agent that all or part of a member's inpatient hospital services are medically necessary and cannot be provided at a less intensive level of care.
Inpatient Hospital Service: A service provided by or under the supervision of a physician after admission to a hospital. This includes outpatient services provided by the same hospital that immediately precede the admission.
Institution for Mental Diseases (IMD): A hospital of more than 16 beds primarily engaged in providing diagnosis, treatment and care of persons with mental diseases.
Local Trade Area: The geographic area surrounding the person's residence, including portions of states other than Minnesota, commonly used by other people in the same area to obtain similar necessary goods and services (MN Rule 9505.0175, subp. 22).
Medically Necessary: An inpatient hospital service consistent with the member's diagnosis or condition in conjunction with industry standard evidence-based criteria, and care that the member requires that cannot be provided on an outpatient or other basis.
Medical Review Agent: The authorized representative that administers procedures for IHA, medical record reviews and reconsiderations, and other functions as stipulated in the terms of the contract.
Medical Review Physician: The physician for the medical review agent who reviews a case for medical necessity when the nurse for the medical review agent has recommended it for denial.
Out-of-Area Hospital: A hospital located outside Minnesota that is not a local trade area hospital.
Physician Adviser: A physician who practices in the specialty area of the admitting, principal or secondary diagnosis or a specialty area related to the admitting, principal, or secondary diagnosis.
Principal Diagnosis: The condition established, after study, to be responsible for causing the admission to the hospital for inpatient hospital services.
Principal Procedure: A procedure performed for definitive treatment of the principal diagnosis rather than one performed for diagnostic exploratory purposes or a procedure necessary to take care of a complication. When multiple procedures are performed for definitive treatment, the principal procedure is the procedure most closely related to the principal diagnosis.
Psychiatric Residential Treatment Facility (PRTF): A PRTF provides active treatment to children and youth under age 21 with complex mental health conditions. This is an inpatient level of care provided in a residential facility rather than a hospital. PRTFs deliver services under the direction of a physician seven days per week to residents and their families, which may include individual, family and group therapy. Children and youth under the age of 21 are eligible based on medical necessity. PRTFs are not subject to the IMD exclusion because they qualify as accredited, licensed inpatient psychiatric hospitals.
Readmission: An admission that occurs within 15 days of a discharge not including the day of discharge or the day of readmission. DHS may conduct a retrospective review to determine if the admission and readmission are considered separate admissions, transfer admissions or a readmission that is a continuation of the previous admission.
Recertification: A provider must certify an admission for every 60 days of continuous hospitalization. A physician, physician’s assistant or nurse practitioner must document, date and sign the recertification in the medical record.
Reconsideration: A review of a denial or withdrawal of inpatient hospital authorization (IHA) or payment.
Retrospective Review: A review conducted after a member receives inpatient hospital services. The review focuses on validating the diagnostic category, verifying recertification, where applicable, and determining the medical necessity of the admission, the medical necessity of any inpatient hospital services provided, and if all medically necessary inpatient hospital services were provided.
Transfer: The movement of a patient after admission from one hospital directly to another hospital with a different NPI, or to or from a unit of a hospital to another unit recognized as a rehabilitation distinct part by Medicare. Transfer also includes members who move to or from extended inpatient psychiatric services capacity under contract with DHS. Moving a member from a medical or surgical service to the acute psychiatric unit within the same hospital are not considered transfers under MHCP and must be billed as one continuous hospitalization.
Minnesota Statutes 256.969, subd. 2
Minnesota Statutes 256B.0625, subd.1
Minnesota Statutes 256B.04
Minnesota Statutes 256D.03
Minnesota Statutes 256L.03, subd. 3(b)
Minnesota Rules 9505.0175, subp. 22
Minnesota Rules 9505.0525, subp. 10F
Minnesota Rules 9505.0500 to 9505.0540
Minnesota Rules 9500.1090 to 9500.1140
42 CFR 456.50 to 456.245
42 CFR 482.30
42 CFR 441 subp., D