CMS Extends Enforcement Delay For “Two-Midnight” Rule

Posted on Thursday, August 13, 2015 9:39 AM

CMS has extended its enforcement delay for the “two-midnight” rule which governs short hospital stays to fall in line with recently proposed changes to the policy. In July, CMS proposed that the rule be modified to allow physicians to exercise judgment to admit patients for short stays on a case-by-case basis. The enforcement delay, passed by Congress in legislation replacing Medicare’s payment formula for doctors, was scheduled to expire on September 30. CMS has now extended the delay through the end of the year. The two-midnight rule requires Medicare’s payment and audit contractors to assume a hospital admission was legitimate if it spans two midnights. Additionally, shorter stays are assumed to be more appropriately billed as outpatient observation care. The rule was intended to provide clarity in response to an increase in observation claims assumed to be a defensive tactic by hospitals weary of auditors challenging their admissions. However, many providers have opposed the policy, saying that it undermines their clinical judgement. The proposed changes put quality improvement organizations in charge of initial reviews of the appropriateness of short inpatient hospitals stays. Recovery audit contractors will only be allowed to conduct patient-status reviews for hospitals that violate Medicare payment policies. RACs will continue to conduct reviews of short stay inpatient claims for reasons unrelated to patient status. The two-midnight rule will be enforced beginning January 1, 2016. Click here to read more.

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