The Two-Midnight Rule is a benchmark for physicians to use in determining a patient’s status for care, whether inpatient or outpatient, at all inpatient acute care hospitals, including Long Term Care Hospitals and critical access hospitals. The Centers for Medicare and Medicaid Services (CMS) implemented the Two-Midnight Rule over concerns that some short inpatient hospital stays may be inappropriate and that beneficiaries may be paying more under observation status. Ultimately, CMS wants to see a clear, timely, thoroughly documented, and justified explanation of a case to determine whether it warrants inpatient status.
Understanding the Two-Midnight Rule
Under the 2-Midnight Rule, doctors must submit a Medicare Order Form attesting that the patient is expected to be in the hospital for two midnights or more, provide documentation that explains the medical reasons for admission, provide documentation containing the estimated duration of the stay, and outline plans for post-hospital care. The span of patient care needn’t be 48 hours to be in compliance with the rule – it only needs to be reasonably anticipated that the patient’s care will span two midnights, meaning if a patient’s care begins in the Emergency Department at 9 p.m. and the patient is then admitted to the hospital at 1 a.m., the patient’s care has already spanned one midnight.
The 2-Midnight Rule only applies when Medicare is the primary payer and the rule enforces Medicare’s demand for appropriate and adequate documentation about the medical necessity for inpatient admission. A goal of this rule is also to eliminate lengthy hospital stays that are billed under observation status.
Other reasons for the inception of the Two-Midnight Rule:
- To prevent hospitals from holding patients for observation without admitting them.
- To ward off the increased billing of patients under outpatient or observation status.
- To help providers accurately determine inpatient status.
- To increase hospital payments.
Compliance with the Two-Midnight Rule
Non-compliance with the 2-Midnight Rule often results in the denial of reimbursement claims. Hospitals run the risk of RAC denials because of incomplete documentation, or because the recovery auditing agency considers the justification of hospital stays insufficient to warrant Part A payment.
Physician cooperation and documentation is key to compliance with the 2-Midnight Rule, as physicians determine whether a patient will be admitted and are the party responsible for providing reasoning for whether an in-patient status is medically necessary. Medicare administrative contractors (MACs) and recovery auditors (RACs) will expect to see a thorough documentation of a patient’s medical history, signs and symptoms, medical needs, and risks in the physician’s assessment.
Hospitals should be vigilant about following all required steps to assess and ensure full compliance. Support from a physician advisor is invaluable in this respect.
Any healthcare reform can be confusing and complicated for medical professionals and administrative personnel. Provident provides the in-person and mobile solutions to make compliance possible and easier for hospitals. Contact us to learn more.