Oversight of the Two-Midnight Rule for Inpatient ADMISSIons

• Did you know that the OIG is bringing back a focus on compliance with the Two-Midnight Rule?
• Did your organization relax its concurrent and retrospective reviews of short stay inpatient admissions?
• Are your newer physicians aware of all the components of the Two-Midnight Rule?
• Have you done a report of less than 2 day LOS admissions to even know how many possible records could be reviewed or at risk?
• Are you confident that you are not at risk for having millions of previously booked revenues recouped by your Fiscal Intermediary?
• Do you have sound processes, policies and procedures to support 100% of your coding and billing as inpatients when the length of stay is not greater than two midnights?
• Are your Executive team and Board of Trustees fully informed about the financial impact of these potential take backs?

Perhaps it is time for an external review of your processes, written documentation, and concurrent/retrospective medical records.  We not only will help your team identify risks we will help you mitigate them.

Prior OIG audits identified millions of dollars in overpayments for inpatient claims with short lengths of stay. Instead of billing the stays as inpatient claims, they should have been billed as outpatient claims, which usually results in a lower payment. To reduce inpatient admission errors, CMS implemented the Two-Midnight Rule in fiscal year 2014. Under the Two-Midnight Rule, CMS generally considered it inappropriate to receive payment under the inpatient prospective payment system for stays not expected to span at least two midnights. The only procedures excluded from the rule were newly initiated mechanical ventilation and any procedures appearing on the Inpatient Only List. Revisions were made to the Two-Midnight Rule after its implementation. We plan to audit hospital inpatient claims after the implementation of and revisions to the Two-Midnight Rule to determine whether inpatient claims with short lengths of stay were incorrectly billed as inpatient and should have been billed as outpatient or outpatient with observation. We also plan to review policies and procedures for enforcing the Two-Midnight Rule at the administrative level and contractor level. While OIG previously stated that it would not audit short stays after October 1, 2013, this serves as notification that the OIG will begin auditing short stay claims again, and when appropriate, recommend overpayment collections.

Reference: https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000538.asp