CMS proposes to ease--but not abolish--two-midnight rule

The Centers for Medicare & Medicaid Services this week proposed an amendment to the broadly unpopular "two-midnight rule" for patients' inpatient and outpatient status.

Under the current rule, short inpatient stays only qualify for inpatient coverage under Medicare if they span more than two midnights. The CMS proposal doesn't scrap the rule entirely, as groups such as the Medicare Payment Advisory Commission have endorsed, but does amend it to incorporate doctors' discretion in individual cases, giving them the option to cover some cases under inpatient rules even if they fall short of the two midnights. 

However, CMS noted that if it implemented the altered rule, the agency would expect the majority of outpatient stays to continue to exceed two midnights. The revised policy would take effect in November, with a public comment period in the meantime.

Critics of the two-midnight rule say it confuses Medicare patients because they aren't sure whether their stays, and any necessary follow-up treatment, are covered. A Virginia law that took effect this week requires all hospitals to inform patients verbally and in writing when their admission is only covered under observation status, FierceHealthcare previously reported.

The American Association of Retired Persons, another vocal critic of the two-midnight rule, is still analyzing the proposal, according to the Associated Press.

American Hospital Association President Rick Pollack called the change to the rule "a good first step," but criticized CMS for maintaining reimbursement cuts as part of its proposal to reduce outpatient payment rates by .01 percent and restructure ambulatory payment classificaitons. "We are dismayed that miscalculations by the actuaries are resulting in penalties to hospitals and the patients they care for," Pollack wrote. "CMS must reevaluate the actuaries' estimates."

To learn more:
- here's CMS' fact sheet on the proposal
- read the AP article via the Washington Post
- here's the AHA statement

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