CMS released CY 2016 Outpatient Prospective Payment System (OPPS) Proposed Rule (CMS 1633 P). In which they propose to allow an exception to the controversial Two Midnight Rule. This proposed change is in recognition that there may be times when an inpatient admission (Part A payment) may be clinically warranted for stays that span less than two midnight’s.
The two midnight rule was adopted effective October 1, 2013. Inpatient admission is generally appropriate for Medicare Part A payment when a patient is admitted inpatient with the expectation that the patient will need hospital care that spans at least two midnight’s. If the patient is expected to need less than two midnights of care in the hospital, the services should be billed as outpatient services (Part B).
Previously the only exceptions to the two midnight benchmark were cases involving services designated by CMS as inpatient only, and those rare and unusual circumstances published on the CMS Web site. In the proposed rule, CMS seeks to modify the existing, “rare and unusual”, exceptions policy to allow determinations to be made on a case-by-case basis by the physician responsible for the care of the beneficiary, subject to medical review.
What does this mean? Under “rare and unusual” circumstances patients may be admitted for inpatient care even if that care spans less than two midnight’s, AND this may be payable under the Medicare Part A.
CMS offered a judicious warning, “However, we continue to expect that stays under 24 hours would rarely qualify for an exception to the 2-midnight benchmark.”
It is important to note that along with this proposal CMS outlined revisions to the medical review strategy for these services.