Hospitals May Ask Physicians to Help Comply With New Inpatient Rule

CMS 'Two-Midnight' Provision Effective on Oct. 1

November 20, 2013 11:30 am Sheri Porter

Family physicians with hospital admitting privileges likely are aware of CMS' new benchmark for inpatient hospital admissions that went into effect on Oct. 1. If not, they most likely will hear about it soon from the hospitals to which they admit patients.

[Stock photo of woman in hospital bed with physicians at bedside taking notes]

The final rule, dubbed the "two-midnight provision," and published in the Aug. 19 Federal Register(, instructs physicians on when an inpatient hospital admission should be ordered and clarifies when such admissions qualify for Medicare Part A payment.

The rule won't directly affect physicians' payment, but it does affect how hospitals get paid by Medicare, said Kent Moore, the AAFP's senior strategist for physician payment.

"There's money on the table for the hospitals," said Moore, so family physicians should not be surprised when hospital administrators approach them about the new guidelines. "Since hospitals don't do admitting -- physicians do -- hospitals undoubtedly will be talking to their physicians about this rule and its implication for the admission decisions within the hospital," said Moore.

Here's the gist of the CMS final rule.

If a physician anticipates a patient will be in the hospital for two or more midnights, CMS typically will expect the patient to be admitted as an inpatient and will presume that an inpatient admission is appropriate. If the inpatient stay is less than two midnights, CMS may consider the hospital stay questionable and initiate a review.

"There has been long-standing confusion on the part of the hospital community about what Medicare expects as criteria for admitting patients to the hospital as an inpatient versus outpatient," said Moore. "That confusion, in turn, has led to claims denials on the hospital side for short-stay admissions."

With this rule, "CMS has attempted to create a brighter line about its expectations when it comes to inpatient versus outpatient status in the hospital," said Moore. "That line is two midnights."

Moore recently sat in on a CMS-hosted conference call on the issue during which CMS officials announced that Medicare administrative contractors (MACs) would be conducting reviews of inpatient stays of less than two midnights for all hospitals other than critical access hospitals through March 2014.

Furthermore, the MACs will review 10 claims of this type for small hospitals -- 25 for larger hospitals -- and any claims violating the new rule will be denied.

"I expect hospitals will be putting equal pressure on physicians, including family physicians, to help them meet the new Medicare standard," said Moore.

CMS has created a frequently-asked-questions document( to help guide physicians and hospitals on the rule.