By Edward J. Niewiadomski, MD and Laureen A. Rimmer, RHIA, CPHQ, CHC, BESLER Consulting
Effective October 1, 2013, The Centers for Medicare and Medicaid Services (CMS) implemented a new rule, the “2-Midnight Rule” that is intended to clarify which patients are sick enough to be admitted to a hospital by adding “midnight” as a point in time for determining inpatient length of stay and requiring physicians to certify that they have the expectation of care surpassing two midnights. Medicare would then pay inpatient hospital rates. Prior to this rule, CMS outlined observation care as short term and generally would not exceed 24 hours but could be up to 48 hours in rare and exceptional cases. It is important to note that a New Jersey State regulation stipulates a length of stay criteria of less than 24 hours for observation services. The New Jersey Department of Health and Senior Services, N.J.A.C., Title 8, Chapter 43G-32.21 outlines the state standards for observation services and scope which is more stringent than the CMS guidance on observation services.
The key elements of the 2-Midnight rule require documentation in the medical record for medical necessity and a presumption of the length of stay. The focus of the documentation requirements for Medicare inpatient admission is as follows:
- Inpatient admission order at the time of admission by a physician or qualified practitioner licensed by state to admit inpatients and who has admitting privileges;
- Physician certification of medical necessity includes (before discharge):
- Inpatient admission order signed/authenticated by the physician or countersigned, if needed;
- Dated order;
- Reason for inpatient services, including diagnosis, patient history, patient comorbidities, severity of signs & symptoms, risk of adverse events, current medical needs requiring inpatient care, plan of care, and plans for post hospital care; and
- Estimated length of stay (expected to stay at least 2 midnights).
There are other circumstances supporting short inpatient stays, exceptions to the 2-Midnight benchmark, based upon CMS guidance which is as follows:
Procedures defined as “Inpatient–Only”
- Unforeseen beneficiary death
- Unforeseen transfer
- Unforeseen departure against medical advice
- Unforeseen clinical improvement
- Election of hospice care in lieu of continued treatment in the hospital
- Mechanical ventilation initiated during present visit
Documentation in the medical record, as always, is critical to explain what happened during the episode of care. Physicians need to tell the story of the patient by outlining the above which will provide auditors with the reasons for the inpatient status.
The 2-Midnight Presumption and the 2-Midnight Benchmark
The 2-Midnight presumption and benchmark are outlined in CMS-1599-F. The 2-Midnight presumption specifies that hospital stays spanning two or more midnights after the beneficiary is formally admitted as an inpatient based upon the physician order, will be presumed to be reasonable and necessary for inpatient status, as long as the stay in the hospital is medically necessary. CMS will direct Medicare Administrative Contractors (MACs) not to focus medical reviews on stays spanning at least two midnights after admission. MACs may review these claims as part of routine monitoring activity or as part of other target reviews and/or in the event of evidence of systematic gaming, abuse or delays in the provision of care to qualify for the 2-Midnight presumption.
The 2-Midnight benchmark represents when an inpatient admission is generally appropriate for Medicare coverage and Part A inpatient payment. For purposes of determining whether the 2-Midnight benchmark was met, CMS will direct MACs to consider time the beneficiary spent receiving outpatient services within the hospital prior to inpatient admission, in addition to the post-admission duration of care. The pre-admission time may include services such as observation services, treatment in the emergency department (ED), and procedures provided in the operating room or other treatment area. MLN Matters Number: MM8586 was released January 24, 2014 to provide clarification to hospitals regarding the billing of inpatient hospital stays to track the total, contiguous outpatient care prior to inpatient admission to the hospital. CMS has redefined occurrence span code 72 which allows providers to voluntarily identify those claims in which the 2-Midnight benchmark was met because the beneficiary was treated as an outpatient in the hospital prior to the formal inpatient order and admission.
From the issuance of the Inpatient Prospective Payment System (IPPS) Final Rule CMS 1599-F for Fiscal Year (FY) 2014 on August 19, 2013 to the soon to be published IPPS Final Rule FY 2015, CMS-1607-F on August 22, 2014 to the Outpatient Prospective Payment System (OPPS) Proposed Rule for Calendar Year (CY) 2015, the public comments and CMS guidance evolves. The table below outlines the milestones in this regulatory journey. In spite of the OPPS Proposed Rule for CY 2015 which proposes 20 days as the appropriate minimum threshold for physician certification, these regulations have been and continue to be effective as of October 1, 2013. In spite of the OPPS CY 15 proposal, clinical documentation in the medical record drives medical necessity for inpatient hospital stay. Physician documentation needs to be specific and explicit.
Best Practice Today
Currently, no specific procedures or forms are required. The physician certification may be entered on various forms, notes or records (with appropriate signatures) included in the medical record, or on a special form, so long as there is a separate signed statement for each certification. In the absence of specific certification forms, the medical record elements identified above may be sufficient to meet the initial inpatient certification requirements for each component.
Collaboration of the revenue cycle team, inclusive of Case Management, Patient Access Services, Health Information Management, Clinical Documentation Improvement and Patient Financial Services with the physicians is the key strategy to success. Understanding the clinical processes, electronic health record interfaces to the billing system and validating the patient status concurrently are essential. How would your organization answer these questions?:
- What is the Case Management model to support concurrent physician decision making on the patient status; inpatient vs. observation vs. outpatient?
- Are there case managers in the ED to collaborate with the ED physicians, hospitalists and/or community physicians to assess the clinical picture of the patient, ensure the medical record tells the story and then places the patient in the appropriate status?
- Is there strong physician leadership to monitor observation patients timely and make the next appropriate clinical decisions?
- What is the role of the Utilization Review Committee and Physician Advisors?
- Are physicians educated and do they have the tools needed to support the clinical decision making?
- Are the clinical and financial metrics implemented and assessed for improvement opportunities?
- Are there policies for observation billing, use of occurrence span code 72, inpatient only procedures?
- Is there auditing of hospital systems, policies and procedures for compliance?
- Is there a process to aggressively appeal cases that appear to meet inpatient criteria?
As CMS continues to state, the decision to admit a patient as an inpatient is a complex medical decision based upon many factors including the risk of an adverse event during the period considered for hospitalization. The MACs will continue their probe and educate while the Recovery Auditors will be in a holding pattern by not conducting inpatient status review of claims through March 31, 2015. Hospitals need to monitor the regulatory advisories and remain diligent and compliant in meeting the CMS requirements for the 2-Midnight Rule.
Footnotes
- CMS: Selecting Hospital Claims for Patient Status Reviews: Admissions on or after 10/1/13 (last update: 2/24/14)
- CMS: Inpatient Hospital Reviews, Update 3/12/14
- CMS FAQs, Update 3/12/14
- CMS: MLN Matters Number MM8586, 1/24/14; revised 4/8/14
- CMS Fact Sheets: FY 2015 Policy & Payment Changes for Inpatient Stays in Acute Care Hospitals and Long Term Care Hospitals, 8/4/14
- New Jersey Department of Health and Senior Services, N.J.A.C., Title 8, Chapter 43G-32.21
Related
By Edward J. Niewiadomski, MD and Laureen A. Rimmer, RHIA, CPHQ, CHC, BESLER Consulting
Effective October 1, 2013, The Centers for Medicare and Medicaid Services (CMS) implemented a new rule, the “2-Midnight Rule” that is intended to clarify which patients are sick enough to be admitted to a hospital by adding “midnight” as a point in time for determining inpatient length of stay and requiring physicians to certify that they have the expectation of care surpassing two midnights. Medicare would then pay inpatient hospital rates. Prior to this rule, CMS outlined observation care as short term and generally would not exceed 24 hours but could be up to 48 hours in rare and exceptional cases. It is important to note that a New Jersey State regulation stipulates a length of stay criteria of less than 24 hours for observation services. The New Jersey Department of Health and Senior Services, N.J.A.C., Title 8, Chapter 43G-32.21 outlines the state standards for observation services and scope which is more stringent than the CMS guidance on observation services.
The key elements of the 2-Midnight rule require documentation in the medical record for medical necessity and a presumption of the length of stay. The focus of the documentation requirements for Medicare inpatient admission is as follows:
Best Practice Today
Currently, no specific procedures or forms are required. The physician certification may be entered on various forms, notes or records (with appropriate signatures) included in the medical record, or on a special form, so long as there is a separate signed statement for each certification. In the absence of specific certification forms, the medical record elements identified above may be sufficient to meet the initial inpatient certification requirements for each component.
Collaboration of the revenue cycle team, inclusive of Case Management, Patient Access Services, Health Information Management, Clinical Documentation Improvement and Patient Financial Services with the physicians is the key strategy to success. Understanding the clinical processes, electronic health record interfaces to the billing system and validating the patient status concurrently are essential. How would your organization answer these questions?:
