CMS Extends the Two-Midnight “Probe & Educate” Period and Releases Additional Guidance Related to the Admission Order and Certification Requirements Adopted in the Fiscal Year 2014 IPPS Rule

by King & Spalding

On Friday, January 31, 2014, CMS announced it would extend the “Probe & Educate Period,” a period of partial nonenforcement for the new inpatient admission requirements, including the two-midnight rule, through the end of federal FY 2014.  CMS announced the Probe & Educate Period in late September 2013, and it was originally set to span only six months, from October 1, 2013 to March 31, 2014.  However, with this new six-month extension, the Probe & Educate Period will continue through September 30, 2014. 

CMS stated that the Probe & Educate Period is intended to allow the provider community to become familiar with the application of the two-midnight admission standard and other new requirements for inpatient admissions contained in the FY 2014 inpatient prospective payment system (IPPS).  Generally, the Probe & Educate Period limits Recovery Audit Contractors (RACs) and other Medicare review contractors from conducting post-payment patient status reviews of inpatient hospital claims with dates of admission on or after October 1, 2013.  Instead, during the Probe & Educate Period, Medicare Administrative Contractors (MACs) will sample on a pre-payment basis between 10 to 25 claims, depending on hospital size, for each hospital subject to the new requirements.  MACs will deny claims that do not meet the standards and provide feedback to the hospitals.  Depending upon how well the hospital performs, MACs can take other actions, including reviewing additional claims.   

Although CMS has extended the Probe & Educate Period, making it co-extensive with all of FY 2014, CMS has not reversed the two-midnight admission standard, nor has it delayed implementation of the new regulation.  Claims for inpatient stays seeking Part A reimbursement must still comply with the two-midnight standard, according to CMS, as well as the requirement for a formal, written inpatient admission order and physician certification.  In addition, CMS will continue to reduce IPPS payments by 0.2 percent, a downward adjustment to IPPS payments that CMS adopted in the FY 2014 IPPS rule in order to offset a perceived increase in aggregate IPPS payments resulting from implementation of the two-midnight admission standard. 

Hospital Inpatient Admission Order and Certification

With its announcement, CMS also issued further guidance regarding the inpatient admission order and certification requirements adopted in the FY 2014 IPPS rule.  Much of the information repeats guidance that CMS provided in a similar document on September 5, 2013.  Highlights of the new information contained in this latest document include: 

  • Physician Certifications
    • For Inpatient Rehabilitation Facilities (IRFs), the documentation that IRFs are already required to complete to meet the IRF coverage requirements (such as the preadmission screening including the physician review and concurrence, the post-admission physician evaluation, and the required admission orders) may be used to satisfy the certification and recertification statement requirements.
    • The guidance defines the time of discharge.  According to CMS, a Medicare beneficiary is considered a patient of the hospital until the effectuation of activities typically specified by the physician as having to occur prior to discharge (e.g., “discharge after supper” or “discharge after voids”).  Accordingly, discharge itself can but does not always coincide exactly with the time that the discharge order is written, rather it occurs when the physician’s order for discharge is effectuated.
    • The certifying physician does not have to have inpatient admission privileges at the hospital.
  • Inpatient Orders
    • A medical resident, a physician assistant, nurse practitioner, or other non-physician practitioner may act as a proxy for the ordering practitioner provided they are authorized under state law to admit patients and meet certain requirements.  An ordering practitioner may allow certain non-physician practitioners and residents to write inpatient admission orders on his or her behalf, if the ordering practitioner approves and accepts responsibility for the admission decision by counter-signing the order prior to discharge.  Also, the guidance describes acceptable procedures regarding verbal orders.
    • In extremely rare circumstances, the order to admit may be missing or defective (illegible or incomplete), yet the intent, decision, and recommendation of the physician (or other practitioner who can order inpatient services) to admit the beneficiary as an inpatient can clearly be derived from the medical record.  In such circumstances, contractors have discretion to determine that this information constructively satisfies the requirement that the hospital inpatient admission order be present in the medical record.

Click here to view CMS’s announcement. 

Reporter, Isabella Edmundson, Atlanta, + 1 404 572 3527,

Written by:

King & Spalding

King & Spalding on:

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