January 8, 2019, almost exactly a year after CMS removed total knee arthroplasties from the Medicare Inpatient-Only List, CMS released additional guidance regarding the application of the Two-Midnight Rule to these cases.  However, just a few days later, CMS withdrew the guidance, likely to address certain issues in the guidance identified by the provider community. 

Prior to January 2018, total knee arthroplasties, which are also referred to as total knee replacements, had been included on the Medicare Inpatient-Only List, which identifies procedures that must be provided in an inpatient setting and therefore are not paid under the Outpatient Prospective Payment System (OPPS).  Because total knee arthroplasties represent a significant revenue source for many hospitals, the removal of total knee arthroplasties from the Medicare Inpatient-Only List garnered industry attention. 

In the wake of CMS’s change to the Medicare Inpatient-Only List, many hospitals struggled with the application of the Two-Midnight Rule to total knee arthroplasties.  Indeed, according to the Journal of Arthroplasty, following the removal from the Medicare Inpatient-Only List, some hospitals began scheduling all total knee arthroplasties as outpatient procedures. 

Last week, CMS issued Medicare Learning Network (MLN) guidance, MLN Matters Number SE19002, to provide additional clarity on the application of the Two-Midnight Rule to total knee arthroplasties and provide several case examples.  In the MLN guidance, CMS emphasized that the removal of this procedure from the Medicare Inpatient-Only List allows “[total knee] procedures to be performed on an inpatient or outpatient basis.”  CMS further stated that “CMS policy does not dictate a patient’s hospital admission status and has no default determination on whether [total knee arthroplasty] procedures should be done on an inpatient or outpatient basis.” 

Shortly following the release of the MLN guidance, the provider community noted certain issues with the guidance.  For example, the MLN guidance stated that Critical Access Hospitals are not subject to the Two-Midnight Rule, which conflicts with other CMS authority.  See 42 C.F.R. § 412.3; 78 Fed. Reg. 50496, 50949 (Aug. 19, 2013).  Likely to address these issues and to further refine the clinical examples provided, CMS removed the MLN article from CMS’s website, although a revised version of the guidance may be issued later. 

The current page for the MLN guidance is available here and the previous version is available here.