According to press reports, on May 4, 2016, CMS directed Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIOs) tasked with reviewing the appropriateness of short stay inpatient claims under the Two Midnight Rule to temporarily suspend those reviews in order to improve standardization and consistency.  The duration of the suspension has not been announced.  Although CMS has not yet posted a formal announcement of the suspension on its Inpatient Hospital Reviews webpage, one of the two BFCC-QIOs – Livanta – posted an update on its website. 

The BFCC-QIOs assumed responsibility on October 1, 2015 for conducting reviews of short stay inpatient hospital claims under the Two Midnight Rule, transitioning that role away from the Medicare Administrative Contractors (MACs).  The MACs had spent two years developing expertise and had faced a steep learning curve in conducting Probe & Educate reviews.  Accordingly, some providers questioned the value of the change given the complexity of the reviews, the cost and effort of transitioning responsibility, and the expectation that the BFCC-QIOs would face the same steep learning curve.

Providers should be aware that the pause is temporary and reviews will resume.  Once reviews restart, providers should pay close attention to the results of their reviews in light of the BFCC-QIOs’ broad referral authority.  Hospitals that the BFCC-QIOs find have exhibited a “pattern of practices” (including but not limited to high denial rates, consistently failing to adhere to the Two Midnight Rule, or failing to improve their performance following a QIO educational intervention), will be referred to the Recovery Audit Contractors for further review.

In addition, the American Hospital Association (AHA) reports that CMS plans to provide additional information on process improvements and educational tools for the Two Midnight Rule in the coming weeks.

The CMS Inpatient Hospital Reviews webpage is available here.  The Livanta statement is available here.  The AHA statement is available here.  The Federal Register discussion of QIOs’ referral authority is available here.

Reporters, Rebecca L. Gittelson, Atlanta, and Ramsey Prather, Atlanta, +1 404 572 4624, rprather@kslaw.com