Facing severe opposition, the Centers for Medicare & Medicaid Services (CMS) has delayed the “two-midnight” rule through September 30, 2014. The two-midnight rule is a new regulation included in the 2014 Medicare inpatient prospective payment rule. The policy established that inpatient admissions spanning at least two midnights qualify for Medicare Part A payments, and inpatient stays lasting fewer than two midnights must be treated and billed as outpatient  services.

According to CMS, the enforcement of the two-midnight rule will not begin until October 1, 2014. Medicare administrative contractors (MACs) and recovery auditors (RACs) will not conduct two-midnight post-payment reviews of claims with admissions dates between October 1, 2013, and October 1, 2014. The focus of the reviews will be whether the admitting physician expected medically necessary care at the time of admission. Physician documentation will be key in this process.

MACs and RACs will carry out prepayment reviews of hospital admissions that occur between March 31, 2014, and September 30, 2014. Dependingon the hospital, auditors will review 10 to 25 claims per facility. Based on the results of initial reviews, CMS will conduct educational outreach efforts later in 2014.

For questions or concerns about the two-midnight rule, please contact Scott Richards.