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CMS Delays Two-Midnight Rule

Posted on 2/5/2014 by NTOCC ® in Public Policy Updates

Last week, after mounting pressure from the hospital and physician community, CMS announced that it will delay enforcement of the two-midnight rule until October. The punitive measures of the rule were set to go into effect in April, and auditors will now have to wait until after September 30 to start auditing claims under the two-midnights rule.

The two-midnight rule was finalized in CMS’ inpatient payment rule for 2014 and states that an inpatient admission will be presumed appropriate by the Medicare auditors if physicians expect the beneficiary to stay in the hospital for at least two midnights.  However, there has been growing opposition to the rule from the provider community which claims that if a beneficiary stays less than two-midnights, the providers are presumed to have provided medically unnecessary care.

As you know, NTOCC has previously expressed concern to both CMS and Congress regarding the challenges faced by Medicare beneficiaries who are hospitalized under “observation status”, rather than formally admitted as an inpatient, which includes higher financial liability toward accessing follow-up skilled nursing facility (SNF) care, or forgoing care altogether because costs are too burdensome.  Under current law, to qualify for the Skilled Nursing Facility (SNF) benefit, Medicare requires that the patient must have an inpatient stay of three or more consecutive days.  NTOCC continues to support Congressman Joe Courtney (D-CT) and Senator Sherrod Brown’s (D- OH) bill, Improving Access to Medicare Coverage Act of 2013 (H.R. 1179/ S. 569), which would ensure that time spent in an observation stay could be counted toward meeting the three-day prior inpatient stay requirement to qualify for Medicare SNF coverage.