CMS Requests Re-Review of Two-Midnight Probe & Educate Denials and Releases Additional Guidance

by King & Spalding

On February 24, 2014, CMS released additional guidance addressing implementation of the revised inpatient hospital admission standards adopted in the 2014 IPPS Final Rule and new instructions to the Medicare Administrative Contractors (MACs) regarding re-review of claim denials under the two-midnight rule Probe & Educate period.

CMS requests that the MACs re-review all claim denials under the Probe & Educate process to ensure the claim decisions are consistent with the most recent implementation guidance.  The Probe & Educate period was recently extended by CMS through September 30, 2014.  To read our February 3 Health Headline regarding the extension, click here.

CMS urges providers to work with their MACs to determine whether a claim has undergone final adjustment prior to submitting an appeal request.  CMS will waive the 120-day timeframe for filing redetermination requests received before September 30, 2014 for claim denials under the Probe & Educate process that occurred on or before January 30, 2014.  Claim denials under the Probe & Educate process that occurred on or before January 30, 2014, for which an appeal has already been filed will also be subject to re-review.

CMS also released initial data collected from the Probe & Educate reviews and examples of common reasons for denial.  As of February 7, 2014, CMS reports that MACs requested 29,158 records and reviewed 6,012 records.  CMS cited the following common reasons for denial, providing an example for each:

  1. missing or flawed inpatient admission order

    e.g., claim denied because physician order read “admit to observation” and did not clearly express physician intent to admit as inpatient;
  2. short-stay procedures not on the inpatient-only list

    e.g., claim denied because medical record did not support expectation of two midnight stay where beneficiary underwent procedure with average length of stay of less than two midnights without complications; care should have been initiated as outpatient/observation;
  3. short stays for medical conditions where the record fails to support an expectation of two midnights

    e.g., claim denied where beneficiary presented with dizziness and physician notes indicated that physician intended to observe beneficiary overnight to monitor medication change; and
  4. physician attestation statements without supporting medical record documentation

    e.g., claim denied where physician’s order included preprinted statement that beneficiary was expected to require two midnights of hospital care; physician’s plan of care setting forth plan for post-operative diagnostics and discharge in morning if stable did not support attestation statement.

In updated guidance documents, CMS addresses beneficiary transfers and off-campus emergency departments (EDs).  With regard to patient transfers, the receiving hospital is allowed to take into account the pre-transfer time and care provided to the beneficiary at the initial hospital for purposes of calculating the two midnight benchmark.  With respect to off-campus EDs, if a hospital ED is either an on-campus ED or an off-campus provider-based ED or practice location of a Medicare-certified hospital, then the ED is considered part of that hospital for purposes of the two-midnight rule, and therefore the total time in the hospital should be counted for purposes of the two midnight benchmark.  If the ED is not established as an off-campus provider or practice location that is unrelated to that hospital’s CMS Certification Number, then the patient movement would be considered a transfer.

To review the guidance documents, click here.

Reporter, Lauren E. Slive, Atlanta, + 1 404 572 3592,

Written by:

King & Spalding

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