Recovery Auditors will Delay Scrutiny of ‘two-midnight’ Rule

October 4, 2013
Rick Gawenda

On September 26, 2013, the Centers for Medicare and Medicaid Services (CMS) announced that government recovery auditors will delay scrutiny of short inpatient stays for 90 days while providers get acclimated to the new policy. Recovery auditor contractors have been told by CMS that they will not be allowed to question the medical necessity of inpatient claims lasting a day or less between October 1, 2013 and December 31, 2013.

The two-midnights rule says that hospital stays that last two days—defined as a stay that spans at least two midnights—are presumed to be legitimate uses of inpatient care and will not be subject to auditing, for the most part. Likewise, most stays that are shorter than that are presumed to have been appropriate for outpatient observation, a level of care for which Medicare pays less and subjects patients to much higher costs.

Medicare Administrative Contractors will still be allowed to “probe” a sample of 10 to 25 claims per hospital on inpatient hospital claims spanning less than two midnights after admission with dates of admission October 1, 2013 through December 31, 2013. If irregularities turn up, the administrative contractor can still deny claims within that sample and then “conduct education” for how the hospital should comply with the rule.

To read the 2-page FAQ document published by CMS, click

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