2-Midnight Inpatient Admission Policy

by King & Spalding

Under CMS’s modified inpatient admission guidelines adopted in the IPPS Final Rule, Part A payment is “generally inappropriate” unless the patient is admitted based on the physician’s expectation that the patient will require a hospital stay that crosses at least 2 midnights (or the planned procedure is on the inpatient-only list).  During the ODF, CMS emphasized that for purposes of this rule, “the clock starts when the patient begins to receive hospital services” including outpatient services such as emergency room and observation services.  In response to this policy, one questioner presented the following scenario:  A patient is admitted for observation for one day, and on the second or third day the patient’s condition deteriorates and the patient is then admitted as an inpatient.  The patient is subsequently discharged one day after admission.  The questioner stated that currently many RACs would view this is a one-day inpatient stay even though the patient was actually in the hospital for three days and asked how this scenario would be treated under CMS’s new 2-midnight policy. 

CMS responded that as soon as a physician believes that a second day of observation will be needed, an inpatient admission order should be issued.  One CMS representative stated that, under this application of the two-midnight rule, there should be no observation stays of more than one day.  In response to questions, CMS representatives also discussed how other inpatient admission criteria, such as those established by InterQual or Milliman, relate to the 2-midnight rule.  CMS stated that the 2-midnight rule would apply even if an admission failed InterQual or Milliman; the only question is whether there was a medical reason that required the patient to be in the hospital for at least two midnights, even if that reason is that the patient must remain under observation for at least two days.  One ODF participant asked more directly whether  the fact that the patient is staying another 24 hours is sufficient to justify an inpatient admission.  The CMS representative replied that as long as the patient medically needed to be in the hospital for another 24 hours, it would be a valid inpatient admission. 

CMS stated that it generally will not look behind the determination to keep a patient for two midnights unless there was a pattern of abuse or delay.  One participant specifically asked what type of data CMS would look at to determine a pattern of abuse.  The CMS representative replied that it will take some time to establish average and outlier behavior under the new policy, but indicated that CMS would generally look to the data contained in a provider’s PEPPER reports. Another participant followed up

this line of inquiry by asking what happens if a death, transfer, or discharge against medical advice interrupts the expectation of a 2-midnight stay.  CMS acknowledged that the rule requires only a legitimate “expectation” of a 2-midnight stay and that there will be times when there are legitimate reasons as to why that expectation is not met.  CMS stated that such unexpected events should be thoroughly documented by providers and would be “taken into consideration by reviewers.”   

Inpatient Admission OrdersUnder CMS’s finalized policy, which CMS categorizes as a “clarification,” an inpatient admission order signed by a qualified, licensed practitioner with admitting privileges who is responsible for the patient’s care must be documented in the patient’s medical record (at or before the time of inpatient admission) and must be supported by the physician admission and progress notes.  One participant on the ODF asked whether there were any circumstances in which a resident or other “physician extender” such as a physician assistant, could issue an admission order.  CMS suggested that the answer would vary somewhat based on whether the particular hospital granted residents or other physician extenders “admitting privileges” and indicated that further guidance on this issue would be forthcoming.      

Part B RebillingDuring the ODF, CMS stated that because the 2-midnight rule represented a significant simplification of the inpatient admission criteria, it expected there to be fewer rejections of inpatient status and less need to rebill under Part B for services initially billed under Part A.  Therefore, beginning with inpatient admissions on or after October 1, 2013, the one-year timely billing requirement under Part B would be reinstated for services denied under Part A.  If a patient was admitted as an inpatient prior to October 1, 2013, however, and that admission was later determined not to be medically necessary under the old inpatient admission parameters, the more expansive Part B rebilling rights under CMS Ruling 1455-R (March 13, 2013) would continue to apply.

A recurring theme from CMS on the ODF was that providers should email questions, concerns, or comments to a mailbox established by CMS for that purpose:  IPPSadmissions@cms.hhs.gov.  The CMS representatives stated repeatedly that CMS is actively monitoring that mailbox and replying to provider questions, and that it is an important resource for CMS to understand industry concerns and the full implications of its policy.  The CMS representatives suggested that it would also be an important source for the development of a Frequently Asked Questions section on CMS’s new policies. 

Reporter, Daniel J. Hettich, Washington, D.C., +1 202 626 9128, dhettich@kslaw.com.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© King & Spalding | Attorney Advertising

Written by:

King & Spalding

King & Spalding on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.