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When a clinician admits a Medicare beneficiary for inpatient care, their choice may have been influenced by a Centers for Medicare and Medicaid Services (CMS) standard that sounds like a term from a spy novel: the two-midnight rule.<\/p>\n
The two-midnight rule is used when a clinician believes that a Medicare beneficiary needs hospital care that will likely eclipse two midnights\u2014requiring inpatient care instead of cheaper outpatient care, Regan Tankersley, an attorney at the law firm Hall Render who advises healthcare systems, told Healthcare Brew.<\/p>\n
\u201cIt\u2019s a more expensive setting, it\u2019s more expensive care, and so it costs more for the payer,\u201d she said.<\/p>\n
CMS first implemented the two-midnight rule in 2013 to provide hospitals with a benchmark on what types of care qualify for Part A coverage, meaning the insurer fully covers treatment costs for services, such as hospital inpatient care or time in a skilled nursing facility. Under Part B coverage, which includes outpatient services, the insurer pays a lower percentage of those costs, usually 80%,\u00a0according to Medicare<\/a>.<\/p>\n By mischaracterizing coverage under Part A, a provider could overcharge the insurer for treatments, according to Tankersley. Before the rulemaking clarified what coverage could qualify under Part A, CMS auditors found inconsistencies in medical claims the agency received from hospitals.<\/p>\n \u201c[T]hrough the Recovery Audit program, CMS identified high rates of error for hospital services rendered in a medically unnecessary setting (i.e., inpatient rather than outpatient),\u201d a 2015 CMS\u00a0fact sheet<\/a>\u00a0stated.<\/p>\n According to one 2016 Office of the Inspector General for the Department of Health and Human Services (HHS-OIG)\u00a0report<\/a>, Medicare may have paid nearly $3 billion in short inpatient stays wrongly categorized under Part A in 2014.<\/p>\n On the other hand, mischaracterizing coverage as Part B could prevent patients from accessing coverage for certain services, such as admission to a skilled nursing facility, according to the report.<\/p>\n \u201cIt took some of the guesswork away for hospitals as to when they should admit patients,\u201d Tankersley said.<\/p>\n The rule cleared away \u201cfear\u201d on the provider side that \u201cwe admit them because we think they\u2019re sick enough, and then Medicare or an auditor comes back and says, \u2018No, we think they should have been an outpatient,\u2019 and then they recoup that payment,\u2019\u201d she added.<\/p>\n Enrollment in Medicare Advantage (MA), a program through which private insurers contract with Medicare to provide coverage, has grown to more than 30 million members, up from 14.4 million members, when the two-midnight rule took effect, according to KFF. Last June, CMS and HHS added a\u00a0new rule<\/a>\u00a0to the Federal Register: MA plan providers must follow the two-midnight payment structure, too.<\/p>\n \u201cA lot of Medicare Advantage plans or commercial plans have a pre-authorization [for inpatient admission],\u201d Tankersley said. Before the rule, MA plans might \u201ccome back and say, \u2018No, we\u2019re not going to let this be admitted.\u2019 And then you\u2019re back into this outpatient bucket and services.\u201d<\/p>\n This article was initially published<\/a> by Healthcare Brew<\/a>, a branch of Morning Brew<\/a>.<\/em><\/p>\n<\/div>\nSubscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up<\/a> for free today.<\/div>\n