CMS delays two-midnight rule enforcement to January 2016

The Centers for Medicare and Medicaid services on Wednesday said it would delay enforcement of the controversial two-midnight rule until the beginning of 2016, a change from the September 30 extension laid out in the sustainable growth rate replacement legislation passed by Congress in July.

The Centers for Medicare and Medicaid services on Wednesday said it would delay enforcement of the controversial two-midnight rule until the beginning of 2016, a change from the September 30 extension laid out in the sustainable growth rate replacement legislation passed by Congress in July.

According to CMS, newly established quality improvement organizations will begin conducting reviews of short-stay inpatient claims on Jan. 1, 2016, a job that was previously conducted by Medicare Administrative Contractors.

[Also: CMS to soften two-midnight rule, allow for exceptions]

The two-midnight rule establishes a criteria for when a hospital visit is classified as an outpatient or inpatient stay, which affects the reimbursement rate. Under the law, a visit that lasts longer than two midnights must be classified as inpatient, but healthcare providers have protested the law claiming the benchmark is too rigid, especially in cases where physicians want extra time for observation but not necessarily treatment.

Under the SGR bill in July, CMS said it would allow case-by-case exceptions.

"Beginning in January 2016, Recovery Auditors may conduct patient status reviews only for those providers that have been referred by the QIO as exhibiting persistent noncompliance with Medicare payment policies, including, but not limited to: having high denial rates and consistently failing to adhere to the Two Midnight rule (including repeatedly submitting inappropriate inpatient claims for stays that do not span one midnight), or failing to improve their performance after QIO educational intervention," CMS said in the announcement.

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