EDITOR’S NOTE: The public comment period on the proposed two-midnight rule ends on Aug. 31, 2015. Send your comments to the Centers for Medicare & Medicaid Services. See details in this article.

The two-midnight rule was supposed to clarify Medicare criteria for admission, but it left many issues unresolved. I would like to explain my proposal for a simplified one-midnight admission rule that would replace the two-midnight rule.

Here’s how a one-midnight rule would work. It’s very simple and it’s easy to understand:

Any patient who requires one midnight of care in a hospital would be admitted, and the hospital would receive a Part A DRG payment. The only exceptions would be for midnight treatment in an ED or one night of recovery following surgery, both of which would remain outpatient services.

When determining length of stay, I propose that the date and time of admission would be when the admission order is written, but the effectuation of admission orders would be delayed to the first midnight for patients who begin ED or hospital care before 4 p.m. To prevent short pre-midnight admission of patients who will go home in the early morning hours, for those who start care late in the day the admission order would be effectuated at noon the following day. Patients who are discharged before reaching the benchmark would remain outpatients, and the hospital would bill Part B, so the cumbersome Condition Code 44 process would go away. Hospitals could divert some of the resources now devoted to utilization review to true case management.

New DRGs would not be required; there would be no need for a “short stay DRG.” There are already DRGs for the conditions commonly treated in observation, such as chest pain and syncope. Revenue neutrality would be maintained if the DRG payment were set at the amount hospitals currently are paid for observation plus the small cost of self-administered medications that currently are billed to the patient.

Outpatient observation could be abolished and replaced by a new comprehensive APC for an “extended outpatient evaluation” – an extended outpatient service that would not require a special physician’s order. It would be an extension of the ED visit. And there would be no need to count hours or carveouts for “active monitoring.”

By admitting and billing under Part A, there would be less risk of beneficiaries being billed for self-administered medications, and unlike patients who are placed in outpatient observation and admitted before the second midnight, the first night in the hospital would count toward the skilled nursing facility (SNF) benefit.

In the interest of patient safety, the inpatient-only list would be a list of procedures that must be performed in a hospital – but not necessarily as an inpatient – with admission appropriate for surgical patients requiring more than one night of recovery whether the procedure was on the inpatient list or not.

There would be less confusion with a one-midnight rule. The physician would be relieved of the need to determine billing status, but of course still would have to determine and document the need for care in the hospital and write an admission order. As an extra bonus for hospitals, there would be far fewer denials and appeals. Beneficiaries would understand that except for outpatient recovery, if they need to stay in the hospital overnight, they’ve been admitted. How simple is that?

The Centers for Medicare & Medicaid Services (CMS) has asked for public comment on the two-midnight rule. You can comment until Aug. 31 by going online to www.regulations.gov and typing “CMS 1633 P” into the search box (the OPPS proposed rule). I hope you will tell CMS that you support a one-midnight rule.

CMS will interpret a lack of comments on the two-midnight rule as satisfaction with the current regulations, so if you agree that a revision of admission rules is needed, let your voice be heard.

Let’s see if CMS will consider some new ideas.

About the Author

Dr. Steven Meyerson is a geriatrician and consultant in Medicare compliance and case management. He has served as physician advisor and Medicare compliance educator. Dr. Meyerson received the 2014 Distinguished Achievement Award from the American College of Physician Advisors and is a member of the Board of Directors that group. 

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