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Washington Highlights

CMS Extends Two-Midnight Delay and Issues Guidance on Inpatient Admissions

February 7, 2014—The Centers for Medicare and Medicaid Services (CMS) Jan. 31 announced a six-month extension of the partial enforcement delay of the “two-midnight rule” and the corollary “probe and educate” period, and issued new guidance regarding the order and certification requirements for inpatient admissions under the policy.

The guidance explicitly clarifies that residents can write orders of admission as long as the attending countersigns the order prior to the patient’s discharge.

After substantial pressure from the AAMC and other hospital associations highlighting the operational challenges that member institutions are facing related to the two-midnight policy, CMS extended the partial delay in enforcement of the rule.  This means recovery auditors and other Medicare review contractors will not conduct post-payment patient status reviews of inpatient hospital claims with dates of admission on or after Oct. 1, 2013, through Sept. 30, 2014.

Medicare administrative contractors (MACs), recovery auditors, and supplemental medical review contractors will continue with other types of inpatient hospital reviews, including, but not limited to, coding reviews, reviews for medical necessity of a surgical procedure provided to a hospitalized beneficiary, and inpatient hospital patient status reviews for dates of admission before Oct. 1, 2013 (using the applicable pre-two-midnight rule policy at the time of admission).

CMS also extended the probe and educate review process through Sept. 30, 2014.  During this period, MACs will continue to review a sample of claims with admission dates from Oct. 1, 2013 through Sept. 30, 2014. 

Although recovery audit contractor (RAC) review will be delayed, the provisions of the two-midnight rule will remain in effect during this period.  MACs will deny Part A payment for any selected claims that do not cross the two-midnight benchmark and will communicate with hospitals to educate them based on the patient status probe reviews conducted during this period.

The AAMC continues to believe a delay is necessary to provide an opportunity to adequately address the many challenges associated with implementing the two-midnight rule until the policy is changed to allow for stays of no or one midnight to be billed under Medicare Part A [see Washington Highlights, Sept. 20, 2013].

The association will continue to educate CMS about stays less than two midnights that should be routinely paid under Medicare Part A, and supports legislative efforts to require CMS create a new policy.

The AAMC also previously urged CMS to change physician certification and order requirements associated with the two-midnight rule that would require practitioners (including residents) who lack the authority to certify a case, to write orders for admission only “[f]ollowing a discussion with and at the direction of the ordering practitioner.”

In response to AAMC-member concerns, CMS clarified in the new guidance that residents and other practitioners can write admission orders on behalf of the attending physician if the attending or another practitioner with admitting privileges later countersigns the order sometime before the patient is discharged. The same process may be used by physicians, such as ED physicians, who do not have admitting privileges.

CMS held a Special Open Door Forum on Feb. 4 to announce the delay and answer questions on the new physician certification and order guidance.  At the forum, CMS stated that further guidance on transfers under the two-midnight policy is forthcoming.

Additionally, CMS will host an MLN Connects Call on Feb. 27 from 2:30 – 4:00 p.m. EDT, during which the agency will field more questions from the public regarding the two-midnight policy and share responses to previous stakeholder questions.


Ivy Baer, J.D., M.P.H.
Senior Director and Regulatory Counsel
Telephone: 202-828-0499

Allison M. Cohen, J.D., LL.M.
Senior Policy and Regulatory Specialist
Telephone: 202-862-6085


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806