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

Christopher Cheney, for HealthLeaders Media, March 3, 2014

'Ill-conceived and Poorly Drafted'
Mark Bogen, senior vice president and CFO at South Nassau Communities Hospital in Oceanside, NY, offered a scathing assessment of the Two Midnight Rule via email Thursday:

"The Two-Midnight Rule came out as a way by CMS to deal with the RAC process that they created, which resulted in a huge backlog of unadjudicated appeals and the mounting threat of lawsuits from the AHA and other interested parties on behalf of the hospital industry. It was ill-conceived and poorly drafted and it is why the 'enforcement' has been delayed until October 1, 2014, for now…

"I believe that instead of measuring/defining inpatient status based on the 'clock' they would have been better served to create a system, which they ultimately did do for the Transfer Issue back in 2002, whereby these short stays would be paid using the [diagnosis-related group] methodology but would be reduced for the fact that the stay was short. 

The ability to have to monitor this at the Hospital level has added untold burden and cost and does not lead at all to the triple aim (Patient Satisfaction, Quality Outcomes and Lower Cost) as well as it in fact shifts the financing cost between Part A (Medicare tax component of FICA) and Part B (basically a premium-based financing) and shifts cost to the Medicare Beneficiary…

Bogen, echoing the AMA and AHA, said "the Two-Midnight rule needs to be repealed and a more thoughtful process needs to be contemplated."


Christopher Cheney is health plans editor at HealthLeaders Media.
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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.