CMS extends two-midnight rule enforcement delay

American Hospital Association praises move, vows to push for more changes to 'flawed' RAC program
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The Centers for Medicare & Medicaid Services announced it will extend its partial enforcement delay of the unpopular two-midnight rule until the end of the year. The postponement coincides with proposed changes to the short-stay rule that the agency issued in July.

Under the current rule, Medicare patients only qualify for inpatient coverage if they stay in the hospital for more than two midnights. But CMS intends to modify the rule to give doctors the discretion to cover some cases even if they fall short of the two midnights. 

The enforcement delay, originally set to conclude at the end of September, prevents Medicare Recovery Audit Contractors (RACs) from conducting post-payment patient status reviews for claims dated from Oct. 1 to the end of 2015.

The American Hospital Association (AHA), one of the two-midnight rule's most vocal critics and a major proponent of an enforcement delay, commended the move. "We also appreciate that CMS provided further details related to changes in the agency's education and enforcement strategies for patient status claims," AHA Executive Vice President Rick Pollack said in a statement. "We will continue to work with the agency as it finalizes its two-midnight policy changes and implements reforms to the flawed RAC program."

In July, Pollack called the proposal "a good first step" but criticized it for maintaining reimbursement cuts, FierceHealthFinance previously reported.

Various healthcare leaders and advocacy groups have long advised CMS to scrap the two-midnight rule entirely; in April, the Medicare Payment Advisory Commission suggested RACs instead focus on the specific hospitals with the most short-stay admissions.

In addition to the enforcement delay, CMS also clarified other previously-announced policy changes:

  • As of October, Quality Improvement Organizations (QIOs) will be responsible for initial patient status reviews to assess the need for Part A payments for short-stay inpatient claims.
  • From October through the end of 2015, QIOs' patient status reviews will be based on the current two-midnight policy.
  • The third round of Probe and Educate reviews will likely conclude by Sept. 30.

To learn more:
- read CMS' announcement
- here's the AHA statement

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