Murtha Means More

“Crossing Two Midnights:” CMS Tries to Define a Hospital Inpatient

May 6, 2013

Bowing to hospital pressure to fix a long-standing problem, CMS recently announced a major proposal to establish a simpler standard for when an individual can legitimately be made an inpatient. On April 26, 2013, CMS proposed that if the admitting physician documents that the beneficiary will require more than one “Medicare utilization day,” external review contractors should presume that an inpatient admission was reasonable and necessary. CMS acknowledged that hospitals were pleading for guidance and that many hospitals have been keeping Medicare patients in observation status in order to avoid having their admission decisions overturned by RACs. CMS will accept comments through June 25. Issuance of a final rule has been promised by August 1, 2013.

More than one Medicare utilization day is defined as an encounter “crossing two midnights” in the hospital. However, if a hospital is found to be abusing this rule (as by deliberately delaying care so that the stay will cross two midnights), the external review contractor will be instructed to presume the reverse: that the service should have been provided on an outpatient basis.

If this negative presumption is triggered, it may be overcome by the thorough documentation of the physician who ordered the admission, which would have to clearly explain and justify any apparent delays in providing care. If, on the other hand, an admitted patient did not actually remain for two midnights, that might be explained as the result of an unforeseen circumstance causing a shorter stay. For example, patients who die after admission or must be transferred to another facility would presumably be covered by the unforeseen circumstances provision. CMS stated that the proposed policy “would address longstanding concerns from hospitals that they need more guidance on when a patient is appropriately treated and paid by Medicare as an inpatient. At the same time the proposed change would help beneficiaries who in recent years have been having longer stays as outpatients because of hospital uncertainties about payment if they admit the patient to the hospital.”  Part A payment will of course continue to be made for shorter stays for services on Medicare’s “inpatient only list.”

Also of note: the hospital Conditions of Participation already require that records contain a physician admission order. However, as part of defining an inpatient admission, CMS is proposing a new regulation at 42 CFR § 412.3. In order to qualify for Medicare Part A payment, an inpatient admission would require an order from a licensed individual with hospital admitting privileges who is responsible for the care of the patient. This responsibility could not be delegated to someone who does not satisfy these criteria.

If you have questions about the issues addressed here, or any other matters involving Health Care Law, please contact your usual Murtha Cullina attorney or Elizabeth Neuwirth at 203.772.7742 /

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