Nov. 5—Hospitals will have three months more to prepare for post-payment reviews of the “two-midnight” rule after Medicare delayed any such action until April 1.

The two-midnight changes were finalized in the Aug. 19 Medicare Inpatient Prospective Payment System (IPPS) final rule, which modified the inpatient admission criteria for Medicare contract auditors. The new rule specified that inpatient hospital admissions were eligible for Medicare Part A payments when the physician both expected the beneficiary to require a stay of at least two midnights and admitted the patient based upon that expectation.

The latest guidance from the Centers for Medicare & Medicaid Services (CMS) on the two-midnight rule delayed post-payment patient status reviews for an additional three months, with reviews now set to take place beginning with claims for services provided on April 1, 2014, or later. The reviews were initially supposed to begin for claims dated from the Oct. 1 start of FY14, but CMS had delayed those for three months in Sept. 26 guidance.    

Instead, during the delay period, CMS directed Medicare administrative contractors (MACs) to conduct “probe and educate” reviews of claims submitted by acute care inpatient hospital facilities, long-term care hospitals, critical access hospitals, and inpatient psychiatric facilities.

The latest guidance provided more details on those educational audits, including the size of the sample batches auditors should review for hospitals. The MACs were directed to provide hospital officials with “educational outreach” based on the findings of those reviews.

"Although further delaying post-payment reviews is the appropriate action, it still does not address the concerns HFMA raised in its comment letter on the two midnight rule and related policies in the 2014 IPPS proposed rule," said Chad Mulvany, director of healthcare finance policy, strategy, and development for HFMA. "We continue to believe it is inappropriate for CMS to have cut IPPS payments by 0.2 percent, and CMS needs to provide more detailed guidance as to how the policy will be implemented."

Publication Date: Tuesday, November 05, 2013