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CMS Issues Guidance on Two-midnight Inpatient Admission and Patient Status Reviews

The Centers for Medicare & Medicaid Services (CMS) released new guidance on the admission and review criteria in the Aug. 2 fiscal year (FY) 2014 inpatient prospective payment system (IPPS) final rule. The rule established a time-based presumption of medical necessity for physician-ordered hospital inpatient admissions for Medicare beneficiaries that span at least two midnights. The new guidance, released Sept. 26 in the form of frequently asked questions, states that Medicare administrative contractors (MACs) and recovery audit contractors (RACs) will not review inpatient claims for inappropriate admissions if the inpatient stay spanned more than two midnights.

It also states that RACs will not review inpatient admissions of one midnight or less for a period of 90 days, from Oct. 1 to Dec. 31, 2013. During the 90-day period, however, the guidance states that MACs will review a small sample of inpatient claims spanning less than two midnights. The sample will range from 10 to 25 claims per hospital. If the inpatient admissions are determined to be appropriate, the MAC will not further review that hospital during the 90-day period unless billing patterns significantly change. The results of these reviews will help CMS develop further guidance. Many stakeholders, including America’s Essential Hospitals, have called for a delay in the implementation of these review criteria until the process and potential impact are more clearly understood. See this week’s Newsline story on how you can join members of America’s Essential Hospitals in urging CMS to delay implementation of the two midnight rule. If this is an issue for your hospital, contact Xiaoyi Huang, assistant vice president for policy, at or 202-585-0127.


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