Ready or not, physicians will soon have to answer to auditors about their admissions decisions involving Medicare patients, and hospitals may face payment denials if the determinations are questioned.
After ongoing delays, enforcement of the Centers for Medicare & Medicaid Service’s two-midnight policy goes into effect April 1. While most hospitals and doctors have known about the rule for some time, they are probably not fully prepared for the burden and potential consequences of the policy, said Dr. Bradley Flansbaum, a hospitalist at Lenox Hill Hospital in New York and a member of the Society of Hospital Medicine’s public policy committee.
Dr. Bradley Flansbaum
“It’s not like the two-midnight rule is being unveiled or it’s something new, it’s the promise of the actual penalties and chart reviews going into play,” he said in an interview. “Not that most hospitals haven’t been taking the rule seriously, but once they know the audits can begin and hospitals could lose money, everything that’s been talked about, actually has to be done. The theoretical becomes reality.”
The two-midnight policy officially went into effect on Oct. 1, 2013, but enforcement through postpayment claims audits by Recovery Audit Contractors (RACs) was delayed until March 31, 2015. Under the controversial rule, the decision to admit a Medicare patient as an inpatient comes down to two factors: whether the condition meets medical necessity requiring a patient to be in a hospital setting and the expectation that their time in the hospital will surpass two midnights. Doctors and hospitals have criticized the rule as undermining doctors’ medical judgment, generating inadequate reimbursement to hospitals for medically necessary care, and creating confusion for Medicare patients. Critics say the rule will mean needless administrative hassles for health providers and penalization of hospitals for innovations to reduce length of stay.
During the most recent delay, CMS planned to conduct prepayment reviews on samples of short-stay inpatient claims to determine hospital compliance with the new policy. The agency said it would evaluate the results of the “probe and educate” process and issue additional guidance to ensure consistency of the policy’s application.