Two-Midnight Ruling
Part A/Part B Re-billing
JoNell Moore, RN
jmoore@eidebailly.com
701.239.8690
Two-Midnight Ruling
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2014 IPPS Final Rule (August 19, 2013)
• CMS interpretations, clarifications, changes
happening daily
• Opposition by AHA, HFMA, over 100 US
Congressmen (bipartisan coalition),
Federation of American Hospitals, etc.
• All requesting to either eliminate the rule or
revise the rule and at the very least, a 6
month delay
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Two-Midnight Ruling
WHY?
• CMS has concerns regarding problems
with observation services from both the
provider and beneficiary perspective
• Too many appeals
• RAC audits of one-day stays
• Ability to re-bill select services if inpatient
stay denied
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Two-Midnight Ruling
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Two concepts
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2.
Two-Midnight “presumption”---Medicare
contractors are not to select inpatient claims
for review if the inpatient stay spanned two
midnights from the time of an admission
(begins when inpatient order is written)
Two-Midnight “benchmark”---Instructs
admitting practitioners and Medicare review
contractors that an inpatient admission is
generally appropriate when the admitting
practitioner has a documented expectation
that the patient will need to receive care for a
period spanning two-midnights
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Two-Midnight Ruling
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Effective October 1, 2013
• Given a 90 day transition period
• Delays full implementation until January 1,
2014
• From October 1, 2013 – December 31,
2013:
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MACs and RACs are not to review claims
spanning > 2 midnights
RACs cannot review inpatient admissions of one
midnight or less
MACs and RACs cannot review any claims for
inpatient stays for CAHs
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Two-Midnight Ruling
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MACs will review a sample of claims
spanning less than two midnights to
determine medical necessity with
admission dates during this time period
10 claims for a small hospital, 25 claims for
larger hospitals----prepayment claims
Hospitals can re-bill denied admissions
CMS will provide education
“Educate and Probe”
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Two-Midnight Ruling
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Practitioner “Order”
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Not really anything new
Written to indicate “admission to inpatient”
Written by a practitioner who is licensed by the
State, granted privileges by the hospital to
admit, knowledgeable about the patient’s
hospital course, plan of care and condition at
the time of admission
Order must be written at or before the time of
the admission
Ordering physician may or may not be the
physician signing the “Certification”
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Two-Midnight Ruling
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Physician “Certification”—evidence the
services were reasonable and necessary
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The most troublesome requirement
Must be completed, signed, dated and
documented in the medical record prior to
discharge
For CAHs, is required no later than 1 day prior
to the submission of the claim for payment
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Two-Midnight Ruling
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Certification must include:
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Authentication of the order….the physician certifies
the inpatient services are reasonable and necessary
(evidenced by signature or counter signature)
Reason for inpatient services
Estimated time the beneficiary will require inpatient
services (span of two-midnights or more)
Plans for post-hospital care
For CAHs, must certify patient will be discharged or
transferred within 96 hours (subject to CMS
clarification they say is coming soon)
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Two-Midnight Ruling
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Authorization to sign the Certification
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At this point may only be signed by a physician,
dentist in special circumstances or doctor of
podiatric medicine
• Mid-level practitioners cannot sign Certifications
• No special forms needed---although most
facilities are creating forms
• Could be part of medical record if the elements
are easily identified
• Again, must be all completed prior to discharge
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Two-Midnight Ruling
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What will the claims look like?
• No instructions finalized at this point
• Some discussion on creating a new
occurrence span code indicating the
patient was receiving outpatient
services prior to the inpatient
admission and the date span of those
services
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Possibly create a condition code similar to
condition code 44
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Two-Midnight Ruling
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CMS has stated:
“The Medicare review contractor may
consider only information that was
available to the admitting practitioner at
the time of the admission, and must not
consider information that becomes
available only after the admission, such
as the patient’s actual length of stay and
outcome”
• In other words, no Monday morning
quarterbacking!
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Two-Midnight Ruling
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CMS states they understand there may be
appropriate inpatient stays that do not span
two-midnights:
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“Inpatient-only procedures” where a patient may
be safely discharged before two-midnights
Patients that are transferred before two midnights
Patient’s death
Patient’s leaving against medical advice
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Two-Midnight Ruling
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Inpatient Criteria per CMS
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Based on documented medical factors and
physician judgment
Patient history, co-morbidities, severity of signs
and symptoms
Current medical needs
Risk of an adverse event happening
CMS will be issuing a sub-regulatory guidance
to address what happens when there is a
conflict between the screening tools (InterQual
or Milliman) and the new criteria
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Two-Midnight Ruling
Email address for questions for CMS
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IPPSAdmissions@cms.hhs.gov
Website for Q&A’s on Two-Midnight Ruling
• www.CMS.gov/medical-review
(click on “Inpatient Hospital Reviews” and under
“Downloads” click on “Questions and Answers
Relating to Patient Status Reviews”)
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Two-Midnight Ruling
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Possible effects:
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Numerous
AHA is requesting a payment solution for “those
intense, inpatient-level services provided by
hospitals that are reasonable and necessary but
do not appear on the inpatient-only list and are
not expected to span two-midnights (i.e.,
vascular procedures)
CMS states reimbursement will increase due to
more inpatient stays
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Two-Midnight Ruling
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AHA and Federation of Hospitals state,
“CMS used flawed and arbitrary
assumptions to justify its $200 million
payment cut to hospitals (0.2% reduction in
the PPS market basket update),
purportedly to achieve budget neutrality for
the two-midnight rule”
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Part B Re-billing
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Historically hospitals/physician reluctant to
order an inpatient admission due to denials
• If the inpatient admission was denied,
hospitals could only bill a limited number of
ancillary services
• If the patient had been an outpatient from
the beginning, the services would have
been payable
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Part B Re-billing
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Resulted in extended observation services
• CMS concerned about “prolonged
outpatient treatment period trend” (CY 2013
OPPS/ASC proposed and final rule)
• Concerned this was resulting in increased
patient liability in the form of Medicare Part
B copayments, charges for selfadministered drugs and post-hospital
skilled nursing care
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Part B Re-billing
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MLN Matters Number SE1333
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For admissions on or after October 1, 2013
“Will allow payment for all hospital services that were
furnished and would have been reasonable and
necessary if the beneficiary had been treated as an
outpatient, rather than an inpatient, except for those
services that specifically require an outpatient status
such as outpatient visits, emergency department visits,
and observation services, that are, by definition, provided
to hospital outpatients and not inpatients”
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Part B Re-billing
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Must be timely filed
Cannot bill both an inpatient and outpatient
claim simultaneously to hedge your bets
A “no pay/provider liable” claim must be
present in the system and posted in the claims
history
The patient is responsible for the Part B liability
amounts
The status of the patient does not change from
inpatient to outpatient even with an inpatient
Part A denial, so there may still be a possibility
of SNF coverage
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Part B Re-billing
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Now can bill OR services, therapy (caps apply for PPS
hospitals)
Must refund to patient the Part A liability amounts
(cannot off set against their Part B liability)
May have two claims---131 TOB for all services
provided in the 3-day window for PPS hospitals and
121 TOB for all services performed during the inpatient
stay
Use the same billing and coding rules used for
assigning dates of service to services that cross
midnight
Use the start of the service to determine correct claim
placement
“Inpatient-only-procedures” performed prior to
admission will not be paid under the Part B Re-billing
rule
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Part B Re-billing
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Patients that are not entitled to Part A or
have exhausted their Part A benefits,
hospitals may only bill for the limited
inpatient services as indicated in the
Medicare Benefit Policy Manual Chapter 6,
Section 10
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Part B Re-billing
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If submitting a Part B claim for a denied
Part A inpatient claim, there are no appeal
rights for the Part A claim
• Cannot bill infusions, injections, blood
transfusions, nebulizers under Part B
(considered nursing services and part of
the inpatient room charge)
• DSMT, clinic visits are not billable under
Part B
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Questions?
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Questions?
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Miscellaneous Items
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