TWO-MIDNIGHT RULE – PART 1

On January 1, 2024, a major change will occur where CMS has clarified (CMS 4201-F) that Medicare Advantage (MA) plans must follow the 2MN rule instead of using their own proprietary guidelines to deny Inpatient Status! This also applies to PACE programs, VA, Tricare, and Railroad insurance that are all federal programs.

The problem arose when traditional Medicare (part A) beneficiaries faced no denials for Inpatient status when the 2MN rule was appropriately applied, but the MA plans denied often. MA plans have not used the 2MN rule, instead applying checkbox clinical criteria that are difficult to meet. Beneficiaries of the MA plans and hospitals find it difficult to defend Inpatient status despite a 3- or 4-day length of stay with little recourse. The same patient would be Inpatient for traditional Medicare but Observation for MA under the current system. The difference in payment to hospitals for observation versus inpatient is substantial and has fueled record profits for the insurance companies at the expense of hospitals. The MA plans have to follow the 2MN rule, just like traditional Medicare starting 1/1/2024!

The Two-Midnight Rule states that a patient is generally appropriate for inpatient admission if:

  • The admitting clinician expects the beneficiary to require medically necessary hospital care spanning 2 or more midnights, and
  • Such reasonable expectation is supported by the medical record documentation

CMS sub-regulatory guidance reminds providers and payers that an attestation such as “I expect two or more midnights” is not sufficient alone to support medical necessity. This statement in isolation does not mention any of the clinician’s complex judgment explaining the comorbid conditions that place the patient at increased risk for an adverse event, for example. Time span alone is not sufficient to support that the two-midnight benchmark to gain valid inpatient status without a denial. The physician’s complex judgment is needed as to why the patient must be in the hospital and cannot be cared for at a lower-level setting. A second midnight is not enough unless you explain in detail why the 2nd MN was justified in an acute care hospital. It is not clear sometimes why a patient has to stay a 2nd MN in the hospital, and unless it is stated by the clinician, we cannot assume it is necessary 2nd MN, and neither will the MA plans. A patient who is kept in the hospital for lack of transportation, testing delays, convenience, awaiting a rehabilitation bed, without documentation of ongoing medical delivery of care that can only be provided in a hospital will result in a denial.

The crux of the matter is the need for the admitting clinician to document that the expectation of two or more midnights of medically necessary hospital care is reasonable and necessary. The clinician must clearly and succinctly document that need, such that an auditor or reviewer with no other knowledge of the patient would be able to understand the clinical decision-making. The clinician needs to explain the severity of signs and symptoms, current medical needs and plan of care, the risk of an adverse event for each admission, explaining why the only place the care can be delivered is in the hospital setting and not at home or a SNF/Rehab. Here is an example: “the anticipated risk of morbidity and mortality for the patients’ medical issue dictates the need to remain in the hospital because the risk of an adverse event would otherwise be unacceptable under reasonable standards of care should the patient be sent home”.

Dr. Russell Firman

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TWO-MIDNIGHT RULE – PART 2

Here is more information on the 2 Midnight Rule effective 1/1/2024 for Medicare plans, courtesy of Dr. Russell Firman.

Question: What documentation will physicians need to provide to support that an expectation of a hospital stay spanning two or more midnights was reasonable?

Answer: Expected length of stay and the determination of the underlying need for medical or surgical care at the hospital must be supported by complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event, which will be expected to be documented in the physician’s assessment and plan of care. CMS does not anticipate that physicians will include a separate attestation of the expected length of stay, but rather that this information may be inferred from the physician’s standard medical documentation, such as his or her plan of care, treatment orders, and physician’s notes.

For purposes of meeting the 2-midnight benchmark, in deciding whether an inpatient admission is warranted, the physician must assess whether the beneficiary requires hospital services and whether it is expected that such services will be required for 2 or more midnights. The decision to admit the beneficiary as an inpatient is a complex medical decision made by the physician in consideration of various factors, including the beneficiary’s age, disease processes, comorbidities, and the potential impact of sending the beneficiary home. It is up to the physician to make the complex medical determination of whether the beneficiary’s risk of morbidity or mortality dictates the need to remain at the hospital because the risk of an adverse event would otherwise be unacceptable under reasonable standards of care, or whether the beneficiary may be discharged. If, based on the physician’s evaluation of complex medical factors and applicable risk, the beneficiary may be safely and appropriately discharged, then the beneficiary should be discharged, and hospital payment is not appropriate on either an inpatient or outpatient basis. If the beneficiary is expected to require medically necessary hospital services for 2 or more midnights, then the physician should order inpatient admission and Part A payment is generally appropriate per the 2-midnight benchmark. Except in cases involving services identified by CMS as inpatient-only, if the beneficiary is expected to require medically necessary hospital services for less than 2 midnights, then the beneficiary generally should remain an outpatient.

United Healthcare just came out with a policy allowing inpatient for any of its MA members where the physician follows the above paragraph. If there is no documentation of the acuity or severity of illness in your note and the risk of an adverse event, they will deny regardless of how long the patient is in the hospital.  Instead of checkboxes used by the case managers to meet inpatient criteria, it is now exclusively up to the clinician’s documentation!

Call me with any questions on the 2MN rule and how you can make a substantial impact for your patients with your documentation. I will share optimal documentation in coming newsletters.

Dr. Russell Firman

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TWO-MIDNIGHT RULE – PART 3

PART 3

If you feel the patient will not or may not stay past 2 Midnight’s receiving medically necessary care, order observation (please count Midnight’s spent receiving treatment in the ER or at outside hospital in transfer). If you are sure the patient will stay past 2 Midnight’s of care then admit as an Inpatient and document thoroughly why the care cannot be treated anywhere other than in the hospital, with specifics, and the exact description of what adverse clinical event could happen if the patient were to be sent home. This new rule allows us to get rid of check box criteria that governed inpatient versus observation in the past. In summary, the new rule allows for 2 items you need to simply document: time expected in the hospital and specific documentation why that care can only be provided in a hospital.

Here is an example that you can use in your ‘medical decision making’ for Inpatient justification:

I have a reasonable expectation at the time of the inpatient order that the patient will require 2 Midnight’s of medically necessary care that can only be provided in a hospital, based upon complex medical factors unique to this patient documented in my history, the comorbidities that I am managing, current medical needs, and my complex treatment plan.

The crux of my medical decision making is to reduce risk for this patient while receiving services, that can only be provided safely in a hospital and not in an outpatient setting. Until a safe discharge is effectuated, the patients increased risk of morbidity and mortality dictate the need to remain in the hospital because the risk of an adverse event would otherwise be unacceptable under reasonable standards of care.      

Severity of signs/ symptoms exhibited by the patient:  ***

            Probable medical adverse event happening to the patient during this time:   ***

            Need for frequent monitoring/Intensity of treatment: ***

The same rule also applies to outpatient surgeries that normally go home before a second midnight of care, but for reasons only the surgeon can elucidate upon, the complex plan of care needs to be extended beyond a normal recovery. Look for the case managers and Physician Advisors to reach out to collaborate on appropriate documentation to support the conversion to an Inpatient status. 

Update:

The 2 midnight rule also applies to surgeons and even applies to scheduled surgeries. The office will still need to get pre-authorization from Medicare Advantage plans, but if a normally routine outpatient procedure will most likely fall into the following categories, then the office should be pursuing an inpatient authorization. A patient that is authorized as an outpatient can be converted to inpatient as long as two midnights of medically necessary care are well documented, as outlined previously. 

What factors might constitute medical necessity for a procedure being an inpatient surgery?

  • The procedure being performed routinely and consistently, across geographical regions and disparate health systems, necessitates two or more midnights of hospital-based care with complex clinical factors considered
  • High risk of postoperative complications, expectation of admission to intensive care unit
  • Pre-existing complications, like sepsis, perforation, abscess, or posthemorrhagic anemia
  • Existence of one or more significant comorbid conditions which can reasonably be anticipated to make surgery and/or postoperative care more complex and risky (e.g., labile diabetes; severe chronic obstructive pulmonary disease; precarious heart failure, clinically significant dysrhythmias or coronary artery disease, acute kidney injury or high-grade chronic kidney disease, steroid usage or immunocompromise, bleeding disorder or coagulopathy)
  • Anticipated need for coordination of and ongoing care, like pain management, monitoring, postprocedural laboratory or radiological studies
  • Social determinants of health which might impede appropriate postoperative care and threaten surgical outcomes.

As always, reach out to me with any questions at 315-372-4484.

Russ Firman MD