Inpatient Facility Coding & Compliance Alert

Counting time and medical necessity still lead the list of must-haves.

Implementation of the 2-Midnight Rule for facilities can be a challenge, which means you don’t want to miss any updates available from CMS – especially when they outline how to count the time associated with the patient admission. That’s one important detail CMS officials covered in the recent National Provider Call “2-Midnight Benchmark for Inpatient Hospital Admissions.”  

Point 1: Understand the Benchmark 

“When we review claims based on the 2-Midnight rule, contractors will include the time the beneficiary spends receiving care in the hospital,” said Jennifer Dupee, a nurse consultant with the CMS Provider Compliance Group. “This can include both inpatient and outpatient time. The outpatient time meaning before the inpatient order and admission occurs, and the inpatient time after the inpatient order and admission.” 

Example: Dupee said that if the total time the beneficiary is expected to spend receiving medically necessary hospital care (including both outpatient and inpatient) is either zero or one midnight, the review contractor will check to see if the beneficiary was admitted for an inpatient-only procedure, or if the other circumstance justified inpatient admission per CMS guidance. If not, the stay would generally be appropriate for inpatient payment. For two or more midnights, the review contractor will generally find that Part A payment is appropriate upon review. 

Point 2: Know When to Start Counting 

CMS expects you to keep several points in mind when determining your “start time” for counting under the 2-Midnight Rule: 

• In most cases, the 2-midnight benchmark counting begins when hospital care begins (whether it’s in observation, the Emergency Department, surgery, etc.). 
• When the patient is admitted through the Emergency Department, the clock begins after registration and initial triage activities such as taking vital signs. “We do ask to exclude excessive wait times when determining the start clock,” Dupee said. 
• Total time in the hospital can be taken into consideration when the physician is making the admission decision based on the expectation of hospital care for two or more midnights. However, remember that the inpatient admission itself does not begin until the inpatient order and formal admission occurs. 

Important point: Melanie Combs-Dyer, acting director of the Provider Compliance Group, made a clarification for listeners. “You’re looking at the time when [the physician is] maybe going to write that inpatient order. You’re not looking for an additional 2 midnights. You’re looking for that second midnight.” 

Point 3: Verify Medical Necessity 

The 2-Midnight Rule is based on the patient’s need for hospital care. As such, the patient must need specific care that is provided during the hospital stay.

“There’s a shift with the medical necessity determination from what the context used to be under our previous rules, which were highly focused on the inpatient versus outpatient level of care depiction,” Dupee explained. “Basically, we’re saying that if the beneficiary requires medically necessary services in the hospital for two or more midnights that is an appropriate inpatient admission.”