The "two midnight" policy, included in Medicare's inpatient payment rule for 2014, directs the agency's auditors to assume that hospital admissions with proper documentation are reasonable and necessary in cases where the patient stays in the hospital for more than a day—defined legally as spanning two midnights in a hospital bed.
The change was intended to address widespread complaints that Medicare's rules are too vague about when a moderately sick patient should be admitted for expensive inpatient care instead of outpatient observation. Hospitals have faced aggressive auditing over short inpatient stays, even though they say the rules didn't set clear standards.
But hospitals aren't happy with the new rules, either. That's because they are presumed to have made an error and provided medically unneeded care if an inpatient doesn't spend two midnights in a hospital bed.