Health Law Blog - Healthcare Legal Issues

Two Midnight Rule Implementation Delays Announced

CMS Issues Further Delays And Implementation Of The Two-Midnight Rule

In late January, the Center for Medicare/Medicaid Services announced that it will delay implementation of regulations pertaining to the two-midnight rule.  CMS announcements state that Medicare administrative contractors will not audit for compliance with the rule until October 1, 2014.

The two-midnight rule provides that an admission does not qualify for per diem reimbursement where a physician admits a patient with an expectation that treatment will require a stay of covering at least two nights.  CMS indicates that this policy merely clarifies its longstanding consideration of when admission meets criteria to be covered as an inpatient rather than as an observation or outpatient.

Under the two-midnight rule, services that are not considered to be medically necessary unless the two midnight inpatients stay rule are met.  This does not mean that there is no coverage at all.  It is possible that the service would be paid as an observation stay or as an outpatient service.  MACs will continue to perform reviews of 10-25 selected clients per hospital per admission dates between March 31 and September 30.  However, the reviews will be considered “probe and educate” reviews and will not lead to administrative sanctions.  However, providers should be completely ready and implement with the rule by October 1, 2014 date that CMS states it will use as a more formal implementation date.


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John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
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