After battling hospitals for years over a short-stay payment provision that was set to have major implications for reimbursement, the Centers for Medicare & Medicaid Services (CMS) has finally agreed to back off the cut.
In the proposed rule released in April, CMS will remove the 0.2 percent cut of the Inpatient Prospective Payment System (IPPS) it instituted in fiscal year (FY) 2014 as part of the two-midnight rule. Instead CMS proposed a onetime 0.6 percent pay boost in FY 2017 to cover the cost of the payment cut to hospitals over the last three fiscal years.
Despite AHA’s pending lawsuit against Medicare and the seemingly endless sub-regulatory releases from CMS, the Two-Midnight Rule is in effect, which means hospital stays spanning less than two evenings are considered outpatient visits and paid accordingly. Hospital stays lasting two or more evenings qualify as inpatient care. For individual hospitals, the Two-Midnight Rule determines if a patient’s episode is covered by Medicare Part A or Part B and has been estimated to reduce the average per-case reimbursement by $3,000-$4,000. This is a high profile policy, and if hospital CFOs and case management directors aren’t careful, they can expect to be flagged for obscure and expensive audits related to how long the patient receives care.
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When the Two-Midnight Rule was first implemented, new challenges appeared, including the requirement to estimate the length of stay as part of the admission certification. Before the rule, hospitals did not have to predict how long a patient was expected to stay; they only had to provide an order for admission, and the order did not require discharge plan documentation. Now, hospitals need to be careful of an audit flag if a patient stays longer than the stated anticipated number of midnights, especially if there is no evidence of a post-hospital discharge plan. Anytime longer than an estimated one-midnight may be considered ‘excessive’ unless there is documentation to support the reason for the patient’s “overtime’ stay.
“Discharge planning starts at admission” is a long-standing clinical mantra, but with the Two-Midnight Rule there is now a financial reason to state and document a discharge plan. In order to avoid an excessive delay audit, physicians and case managers must know what to document, starting at admission. The key items include:
- An order that can be ‘authenticated’ as reasonable and necessary for admission as inpatient.
- A statement about the inpatient admission that indicates an expected length of stay, or more specifically, the number of midnights.
- Documentation of assessment that a patient would need post-hospital care and that the case manager has been working on post-discharge planning from the start of admission.
- A streamlined system to quickly find and secure a bed, as well as documentation of the efforts to put the post-hospital care plan into action.
When a patient is admitted to a hospital, there should be a fully effective discharge plan in place to ensure their pathway through the care community is successful. With the Two-Midnight Rule in place and the proposed discharge time requirements of the awaited final rule of the Conditions of Participation, hospitals will be held more accountable for moving patients efficiently across the care continuum.
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