New Admission Guidelines Proposed by Medicare

on Wednesday, 15 May 2013. All News Items | Patient Status

On April 26, 2013, CMS released the 2014 Inpatient Hospital Proposed Rule which included a proposal to clarify admission and medical review criteria for hospital inpatient services. This proposal is being issued in response to the large number of inpatient admissions that have been determined to not be medically necessary for an inpatient level of care by numerous Medicare reviewers especially related to inpatient short stays. The provider community has also requested clearer guidance from CMS on the requirements for an inpatient admission.

So what are Medicare’s proposed new inpatient hospital admission guidelines?

Under the proposed guidance, a physician or other practitioner should order inpatient admission if he or she expects the patient to require a stay that crosses at least 2 midnights. If the physician does not expect the patient to require care for at least 2 midnights, an outpatient status (or outpatient with observation services) would be the appropriate setting. Note that CMS proposes the starting point for this time-based instruction to be when the patient moves from an outpatient area to a bed in the hospital; however, they are requesting comments concerning the start time proposal.

Are there any exceptions to the “2 midnight” standard?

Yes, patients receiving procedures designated by CMS as inpatient only procedures and if the patient dies or is transferred. According to the proposed rule, CMS will add an exception to the general rule “If an unforeseen circumstance, such as beneficiary death or transfer, results in a shorter beneficiary stay than the physician’s expectation of at least 2 midnights, the patient may be considered to be appropriately treated on an inpatient basis, and the hospital inpatient payment may be made under Medicare Part A.”

Will a physician order still be required for an inpatient admission?

Yes, the physician order and the physician certification are required for all inpatient hospital admissions in order for payment to be made under Part A. However, the order and certification are not considered by CMS to be conclusive evidence that the admission was medically necessary. These documents are considered along with other documentation in the medical record to determine the medical necessity of the admission.

What will be the focus of Medicare reviews for the medical necessity of inpatient admissions?

Medicare medical review efforts will focus on those inpatient hospital admissions with lengths of stay crossing only one midnight or less. The Medicare review contractors will not presume such admissions are reasonable and necessary, but will review the record in accordance with current policy for Part A payment. They will consider complex medical factors, such as the patient’s medical history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event that would have justified a longer stay. If the review contractors determines, based on the documentation of these factors, that it was reasonable for the physician to have expected the patient to require a stay lasting 2 midnights, even though it did not transpire, payment would be made for the inpatient admission.

Will claims with inpatient stays of 2 days or greater be subject to Medicare medical review?

Medicare’s external review contractors will presume that hospital inpatient status is reasonable and necessary for patients who require more than 1 Medicare utilization day (encounters crossing 2 midnights) after admission. If CMS suspects a provider is gaming the time-based presumption, a review would focus on undue delays in the provision of care. Beneficiaries should not be held in the hospital absent medically necessary care for the purpose of meeting the 2-midnight presumption.

These claims will also be reviewed to ensure the services provided were medically necessary, to validate coding and documentation as reflective of the medical evidence and if so directed by CMS or other authoritative governmental entity.

Where will inpatient screening criteria fit into this picture?

It is hard to know. According to the proposed rule, the judgment of the physician and the physician’s order for inpatient admission should be based on such complex medical factors as patient history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event. Also, as stated above, these criteria will be used in the medical review of short-stay claims to determine if the services were appropriate to be provided in an inpatient status, but they tie these factors into the need for services for 2 midnights.

What documentation should be in the medical record?

The physician will be required to clearly and completely document the clinical facts supporting the inpatient hospital admission. It is the documentation of the reasonable basis for the expectation of a stay crossing 2 midnights that would justify the medical necessity of the inpatient admission, regardless of the actual duration of the hospital stay and whether it ultimately crosses 2 midnights. Therefore, the physician would be responsible for ensuring that the patient’s medical record includes complete medical information, and this information would be the basis for determining the medical necessity of the prescribed treatment.

Obviously this significant change in the rules for determining appropriate inpatient admissions raises a lot of questions and concerns from the provider community. We encourage everyone to carefully review the proposed rule and submit your comments to CMS (discussion begins on page 657 of the display copy’s link above). The comment period lasts until June 25, 2013. Note that the link above may no longer work after the rule is published in the Federal Register on May 10, 2013. If not, look for the rule at this link to the Federal Register.

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc. Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system. In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers. You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it.This email address is being protected from spambots. You need JavaScript enabled to view it..

green-iconWe are an environmentally conscious company, dedicated to living “green” both at work and as individuals.


1900 Twentieth Avenue South
Suite 220
Birmingham, AL 35209


This email address is being protected from spambots. You need JavaScript enabled to view it.