Knowledge Base Article

New “Exception” to the 2-Midnight Rule

Just 40 days prior to the 2014 Final Rule going into effect we released an article titled Inpatient Status: To Be or Not to Be, That is the Question. Since that time, through sub-regulatory guidance CMS has indicated that there may be “unforeseen circumstances” or “exceptions” where even though a beneficiary’s stay is not 2-Midnights that inpatient may still be appropriate.

• CMS defines “unforeseen circumstances” as when a beneficiary’s stay is shorter than the physician’s expectation of at least 2 midnights and “the patient may still be considered to be appropriately treated on an inpatient basis for payment purposes, and the hospital inpatient payment may be made under Medicare Part A.” Examples provided by CMS include unforeseen: death, transfer to another hospital, departure against medical advice, clinical improvement, and election of hospice care in lieu of continued treatment in the hospital.
• CMS has also acknowledged that there is the possibility of an “exception” to the 2-Midnight Rule where an inpatient admission would be reasonable in the absence of an expectation of a 2 midnight stay. Prior to the CY 2016 Outpatient Prospective Payment (OPPS) Final Rule, CMS had only identified one “exception.” The exception is mechanical ventilation initiated during the present visit.

CMS finalized a second “exception” to the 2-Midnight Rule in the CY 2016 OPPS Final Rule released October 30, 2015. CMS indicated in the Final Rule that “after consideration of the public comments we received, we are finalizing, without modification, our proposal to revise our previous “rare and unusual” exceptions policy to allow for Medicare Part A payment on a case-by-case basis for inpatient admissions that do not satisfy the 2-midnight benchmark, if the documentation in the medical record supports the admitting physician’s determination that the patient requires inpatient hospital care despite an expected length of stay that is less than 2 midnights.”

Challenge for Hospitals

With this new “exception,” to be or not to be an inpatient continues to be the question. Unfortunately, CMS provides no examples of what they would consider to be such an exception. What we do know is this:

• Records will be considered on a case-by-case basis.
• Documentation in medical records must support the admitting physician’s determination that the patient required inpatient hospital care absent the expectation of a 2-Midnight stay.
• CMS has indicated that factors relevant to determining whether or not the inpatient stay would be nonetheless appropriate for Part A payment include:
• The severity of the signs and symptoms exhibited by the patient;
• The medical predictability of something adverse happening to the patient; and
• The need for diagnostic studies that appropriately are outpatient services, that is, their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more).
• One final challenge is making sure you have an appropriately authenticated inpatient order in the record prior to the patient being discharged.

1-Day Short Stay Hospital Volumes

From the implementation of the 2-Midnight Rule through September 30, 2015 short-stay reviews have been a review focus of Medicare Administrative Contractors (MACs) through the Probe and Educate Program. As of October 1, 2015 the short-stay review responsibility has shifted to the Beneficiary and Family Centered Care (BFCC) Quality Improvement Organizations (QIOs). But before I get ahead of myself, let’s look at the numbers.

Has the implementation of the 2-Midnight Rule impacted the volume of 1-Day short stays?

To answer this question, I needed to ask two more questions.  

• Has there been a significant difference in 1-day stays prior to the implementation of the 2-Midnight Rule vs. after October 1, 2013?
• What is the percentage of 1-day short stays compared to a hospital’s total inpatient volume for our client base?

To find answers, I looked to our sister company RealTime Medicare Data (RTMD). RTMD collects over 680 million Medicare claims annually from 23 states and the District of Columbia, and allows for searching of over 5.1 billion historical claims. By accessing this data base I analyzed 1-Day Short Stay paid claims data for several hospitals within the MMP footprint. Specifically, I chose 1-day short stay claims with dates of service January 1, 2013 through June 30, 2013 which pre-dated implementation of the 2-Midnight Rule and January 1, 2015 through June 30, 2015 to compare the same six months after implementation of the 2-Midnight Rule. What I found was that while not all hospitals realized a decrease in 1-day stays, collectively there was a 2.87% decrease in 1-Day Short Stays compared to overall inpatient volume as depicted in Table 1.

Table 1

 I do not believe there should be a 1-Day Stay volume benchmark for all hospitals to strive for. I do believe that if physician documentation in your medical records supports the need for an inpatient admission, then the volume of 1-day short stays at your hospital will be what it should be. On the other hand, if you are an outlier above or below an “average” this may be a reason to take a closer look at these claims.

Medical Review Responsibility Change effective October 1, 2015

As previously mentioned, the BFCC-QIO’s have assumed responsibility for the short-inpatient stay medical review process. This transition, while outlined in the CY 2016 OPPS Proposed Rule, was not a proposal and subsequently occurred October 1, 2015.

CMS indicated in the CY 2016 OPPS Final Rule that “Under the new short-stay inpatient medical review process that we adopted beginning on October 1, 2015, BFCC-QIOs began to transition to reviewing a sample of post-payment claims and making a determination of the medical appropriateness of the admission as an inpatient.

QIOs will conduct “Revised Determination Reviews” (42 CFR 405.980) on hospital short-stay Medicare Part A claims. QIOs will conduct patient status reviews to determine the appropriateness of Medicare Part A payment for these short-stay inpatient hospital admissions, in accordance with section 1862(a)(1)(A) of the Act. In conducting these reviews, QIOs will use the information documented in the patient’s medical record, and may use evidence-based guidelines and other relevant clinical decision support materials as components of their review activity (we refer readers to 42 CFR 476.100 relating to setting standards for QIO reviews).

Comment: Several commenters stated the need for transparency and for more detailed information regarding the types of claims that would be subject to QIO review, claim sample sizes, the frequency of reviews, the claim look back periods, ADR limits, and administrative burden.

Response: We will address the technical medical review questions posed by commenters in subregulatory guidance.

We expect to release this information on the CMS Web site at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityImprovementOrgs/index.html?redirect=/qualityimprovementorgs/, no later than December 31, 2015.”

There are five BFCC-QIO Service Areas in the country. Most of the MMP footprint is located in an area where KEPRO is the BFCC-QIO. On September 30, 2015 KEPRO provided a Two-Midnight Short-Stay Reviews webinar. Short-stay review guidance provided in this session is outlined in Table 2.

Table 2

Resources

• Link to display copy of the CY 2016 OPPS Final Rule: https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-27943.pdf

• Link to CY 2016 OPPS Final Rule in the November 13, 2015 Federal Register:http://www.gpo.gov/fdsys/pkg/FR-2015-11-13/pdf/2015-27943.pdf

• Link to KEPRO Two-Midnight Short-Stay Reviews webpage: https://www.keproqio.com/twomidnight/Default.aspx