Awareness : OBC Tips

Revised Exceptions to “Two-Midnight Rule”

The “Two-Midnight Rule,” created in 2013, calls for Medicare’s payment and audit contractors to assume a hospital admission was legitimate if it spans two midnights. Shorter stays are assumed to be more appropriately billed as outpatient observation care. Under the revised exceptions policy (CMS-1633-F), effective Jan. 1, 2016, admissions that do not meet the two-midnight benchmark may still be paid under Part A on a case-by-case basis where the medical record supports the admitting physician’s determination that the patient requires inpatient care, despite the lack of a two-midnight expectation.

Beginning Oct. 1, 2015, Quality Improvement Organizations (QIOs) started conducting initial patient status reviews of claims for inpatient admissions. Complex medical factors will be considered in determining whether the medical record supports the need for inpatient hospital care. Recovery audit contractors may conduct patient status reviews for those providers who have been referred by the QIOs as exhibiting persistent noncompliance with Medicare payment policies including, but not limited to, consistently failing to adhere to the “Two-Midnight Rule” or failing to improve their performance after QIO educational intervention.