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Observation, Two-Midnight Rules Hit in Hearing

Cheryl Clark, for HealthLeaders Media, May 21, 2014

Hospital leaders testifying before the House Ways and Means Committee derided Medicare's two-midnight and observation rules, saying that not only are the policies not working, they've also added huge costs and quality issues for providers and patients.

Hospital officials and a Medicare advocate expressed their extreme frustration with Medicare's two-midnight and observation rules before the House Ways and Means Subcommittee on Health hearing Tuesday, saying that not only are the policies not working, they've also added huge costs and quality issues for providers and patients.

"We know the two-midnight rule was spawned out of an attempt to limit lengthy stays and add clarity to the definition of an inpatient," said Amy Deutschendorf, senior director of clinical resource management at Johns Hopkins Hospital in Baltimore. "Unfortunately, the rule adds a new layer of complexity that not only does not meet the [Centers for Medicare & Medicaid Services] objective, but has created confusion and stress for our providers and patients, and has been operationally difficult to implement."

Meanwhile, patients are being assigned to observation status to avoid visits from Recovery Audit Contractors, Deutschendorf and others said. Those RACs are questioning far too many claims as inappropriate, a number that "has increased by 33%" in the last year and has "required our physicians to become soothsayers as they try to project" whether an emergency room patient with multiple symptoms and comorbidities will require a stay that lasts longer than two midnights, she said.

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1 comments on "Observation, Two-Midnight Rules Hit in Hearing"


Sherry Crockett (5/23/2014 at 5:52 PM)
I am so glad to see people speaking up for the effects of Medicare's complex and counter productive regulations. As a case manager, I know how hard the policies are for hospitals and physicians to comply. There are multiple cases where it is not just one illness that brings the patient to ED, but a combination of co-morbidities, exacerbations, along with a new illness that leads to hospitalization. These cases require additional time for the patient to recover. Medicare does not take these co-morbidities into account on many admissions and if the physician does not document exactly why the patient needs to remain in the hospital, either Medicare or RAC's will deny payment.