Policy & Regulation News

CMS Extends Upcoming Two-Midnight Partial Enforcement Delay

By Jacqueline DiChiara

- The partial enforcement delay of the two-midnight policy originally set for September 30, 2015 expiration has been extended by the Centers for Medicare & Medicaid Services (CMS) through December 31, 2015, confirms the American Hospital Association (AHA).

two-midnight rule

According to the simply named two-midnight rule, if inpatient rates for treatment fail to span the course of two midnights, hospitals will not be reimbursed by Medicare. 

Under this extension, Recovery Audit Contractors are barred from conducting post-payment patient status reviews for claims with admission dates between October 1 and December 31 of this year.

CMS released additional information about previously announced changes regarding education and enforcement strategies for patient status claims, says the AHA. “Specifically, beginning Oct. 1, Quality Improvement Organizations will assume responsibility for conducting initial patient status reviews to determine the appropriateness of Part A payment for short-stay inpatient hospital claims,” the AHA confirms.

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  • “From Oct. 1 through Dec. 31, 2015, patient status reviews conducted by the QIOs will be based on Medicare’s current two-midnight policy. Beginning Jan. 1, 2016, patient status reviews will be conducted in accordance with any policy changes finalized in the Outpatient Prospective Payment System rule and effective in calendar year 2016,” the organization adds.

    Additionally, the AHA confirms CMS’s announcement that a third round of Probe and Educate reviews should be completed by the end of September.

    CMS delayed further implementation of the two-midnight rule earlier this year in connection with the repeal of the Sustainable Growth Rate formula (SGR), as RevCycleIntelligence.com reported.

    CMS was urged to make such a decision due to urgency on behalf of the AHA. Last April, the AHA sued the Department of Health and Human Services (HHS) over the two-midnight rule and other Medicare inpatient policies, as EHRIntelligence.com reported.

    According to a series of filed court document complaints, concerns arose regarding a variety of factors, including CMS’s decision to withhold reimbursement for admissions spanning less than the course of 3 days, reimbursement policies for inpatient services, and evolving inpatient definitions.

    This time around, AHA confirms support for CMS’s decision to extend the partial enforcement delay of the two-midnight policy into December.

    “The AHA is pleased that the Centers for Medicare & Medicaid Services (CMS) has extended the partial enforcement delay of the two-midnight policy through the end of the year, which would continue to prevent Recovery Audit Contractors (RACs) from issuing inappropriate denials for medically necessary patient care,” states Rick Pollack, the AHA’s Executive Vice President.

    “The enforcement delay had been set to expire Sept. 30. The AHA strongly urged CMS to extend this enforcement delay because CMS’s proposed changes to the two-midnight policy would not take effect until Jan. 1,” he adds.

    “We also appreciate that CMS provided further details related to changes in the agency’s education and enforcement strategies for patient status claims. We will continue to work with the agency as it finalizes its two-midnight policy changes and implements reforms to the flawed RAC program,” confirms Pollack.