On January 31, 2014, the Centers for Medicare & Medicaid Services (“CMS”) issued a notice delaying by an additional six months (through September 30, 2014) enforcement of the “Two-Midnight” policy, referred to as the Inpatient Hospital Prepayment Review “Probe & Educate” review process. In the announcement, CMS also clarified that “residents and non-physician practitioners [are] authorized to make initial admission decisions,” as long as the attending physician countersigns the order prior to discharge.
According to the CMS notice: 1) Medicare administrative contractors (“MACs”) will continue to select claims for review of policy compliance with dates of admission between March 31, 2014 and September 30, 2014; 2) MACs will also continue to hold educational sessions with hospitals through September 30, 2014; and 3) Recovery auditors and other Medicare review contractors will not conduct post-payment patient status reviews of inpatient hospital claims with dates of admission on or after October 1, 2013 through October 1, 2014, generally.
The “Two-Midnight” policy specifies that hospital stays spanning two or more midnights after the beneficiary is properly and formally admitted as an inpatient will be presumed to be “reasonable and necessary” for inpatient status. Under this policy, “documentation in the medical record must support a reasonable expectation of the need for the beneficiary to require a medically necessary stay lasting at least two midnights.” The “Two-Midnight” policy was instituted because CMS was concerned with the overuse of the “observation” status at hospitals; CMS found that Medicare beneficiaries were spending extended period of times in observation units without being admitted as inpatients. According to CMS, observation services should be needed for 24 hours or less, usually.