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Two-Midnight Rule Must be Fixed or Replaced, Say Providers

Christopher Cheney, for HealthLeaders Media, March 3, 2014

CMS has issued a clarification on its rule governing how Medicare classifies and pays for short hospital stays, but healthcare providers are still crying foul over the new standard.

A top policy official at the American Hospital Association says last week's Two Midnight Rule guidance letter from federal officials provides welcomed clarifications but leaves the policy fundamentally flawed.

"This is guidance that hospitals have been waiting for," said Priya Bathija, senior associate director of policy at the AHA. "It's been very hard for hospitals to operationalize Two Midnights without the guidance."

She praised the directive in the Feb. 24 guidance letter calling on Medicare Administrative Contractors to "re-review" all claim denials under the Two Midnight Rule's probe and educate process prior to Jan. 30. The Centers for Medicare & Medicaid Services says the MAC claim denial re-reviews are supposed "to ensure the claim decision and subsequent education is consistent with the most recent clarifications. The MAC may reverse their decision and issue payment outside of the appeals process if the MAC determines that a claim is payable upon re-review."


See Also: Hospitals Welcome Two-Midnight Rule Delay


Last week's guidance letter from CMS is the second is less than a month. On Jan. 30, CMS issued a guidance letter that included an update on physician certification of short-term hospital stays.

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3 comments on "Two-Midnight Rule Must be Fixed or Replaced, Say Providers"


Lisa Sams MSN, RNC (3/11/2014 at 12:31 PM)
As an APN of many years I would like to bring the focus back to The Patient. On the surface the Two Midnight Rule looks very much like a way to establish two standards of care. It is a woeful development for patient care and the clinical patient relationship. The unintended consequences of most regulations is the very human behavior that will find work arounds to rules that make little sense for the problems at hand. This rule is all about the money. Do we want to improve the systems of care, the outcomes for the people who trust us to care for them? Or will misguided regulations continue to erode the heart of health care...the patient clinicians relationship? The window of time to re-focus and get things on the right path is very limited.

Cheryl (3/7/2014 at 7:49 AM)
Some hospitals appear to have used observation stays to circumvent the re-hospitalization penalties or other payment/penalty issues. This rule helps those people who had a 3 day hospital stay but were denied their Medicare Part A benefits as the stay was considered "observation". In many cases the patient had no idea that they weren't inpatient. The decision define stay as observation or inpatient is also often made retroactively. I have called to determine status of a stay only to be told a week later that the stay is something different. In this instance the benefit to the patient is after the acute stay when they then require subacute skilled services.

Stefani Daniels (3/3/2014 at 9:27 AM)
In my opinion, this whole '2 MN' rule is a product of poor patient management. If hospitals had clamped down on physicians who let their patients linger in observation for more than 23 hours; if hospitals hadn't cohorted observation patients with inpatients and allowed community based physicians to manage them on a day to day basis rather than the hour to hour basis that they require; if hospitals had kept observation patients 'vertical' in an area cleared marked as 'outpatient observation;' if hospitals had invested in nursing staff who were schooled in the management and information needs of observation patients and their families; and if hospitals spent time educating their community about the kinds of services an acute care facility provide, then all of this 'mess' could have been avoided. Like the 24 hr guidance previously on the books, the 2MN rule doesn't change the fact that complete and accurate documentation must support the physicians decision to admit a patient to acute level of care, despite the anticipated or actual length of stay.