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From Health Law Daily, August 13, 2015

Two-Midnight Rule partial enforcement delay extended to end of year

By Mary Damitio, J.D.

CMS is extending its partial enforcement delay of the controversial Two-Midnight Rule until December 31, 2015. The announcement detailed the role that various Medicare contractors will have in conducting patient status reviews for the remainder of the year and beyond, and CMS further indicated that Recovery Audit Contractors (RACs) will be taking smaller roles in such reviews.

Two-Midnight Rule. In response to concerns over observation status, CMS proposed the Two-Midnight Rule, which provides that Medicare Part A payment is appropriate for hospital stay if the physician admits the patient as an inpatient based upon the expectation that the patient will need hospital care across two midnights. The physician may account for outpatient hospital care that the patient received prior to inpatient admission. If it is expected that the patient will require less than two midnights of care in the hospital, the services should be billed as outpatient services. The enforcement of the policy has been repeatedly delayed by legislative and regulatory action (See Two midnight rule, policy changes in OPPS and ASC CY 2016 proposal, July 8, 2015).

QIOs. Starting in October 2015, Quality Improvement Organizations (QIOs) will be conducting patient status reviews to determine whether Part A payments for short hospital stays are appropriate. The reviews conducted from October 1, 2015 through December 31, 2015, will be based on Medicare’s current payment policies. Starting on January 1, 2016, QIOs and RACs will conduct patient status reviews according to any policy changes that are finalized in the Outpatient Prospective Payment System (OPPS) rule and are effective in 2016.

RACs. Congress imposed a moratorium on RACs performing patient status reviews until October 1, 2015. However, no patient status reviews will be performed by RACs between October 1, 2015 and December 31, 2015. Starting in January 2016, RACs will conduct patient status reviews only for providers that were referred by the QIO after being identified as exhibiting “persistent noncompliance” with the program’s payment policies and high denial rates, or consistently failing to adhere to the Two-Midnight Rule or failing to improve their performance after receiving QIO education.

MACs. Medicare Administrative Contractors (MACs) are in the process of conducting the third round of Inpatient Probe and Educate reviews, and anticipate that they will be completed by September 30, 2015. After October 1, 2015, MACs may continue to conduct reviews that are unrelated to patient status such as coding or medical necessity.

Rick Pollack, Executive Vice President of the American Hospital Association (AHA), reportedly stated that the association was pleased with the enforcement delay. He stated, “We will continue to work with the agency as it finalizes its two-midnight policy changes and implements reforms to the flawed RAC program,” he said.

Companies: American Hospital Association

MainStory: TopStory AgencyNews CMSNews IPPSNews OPPSNews BillingNews ProviderNews PartANews MedicareContractorNews QualityNews

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