Hospitals are lobbying for an extension of the moratorium on enforcement of the “two-midnight” policy for short hospital stays that expires at the end of the month. They're hoping Congress will include the extension in action it takes this month on the Medicare physician-payment formula.
In addition, hospitals are pressing the CMS to adopt additional guidance on paying for short stays.
The latest enforcement delay was included in last year's Medicare temporary “doc fix” legislation. But there's little indication that Congress is focused on the two-midnight policy as it grapples with permanently scrapping the Medicare sustainable growth-rate formula.
The two-midnight policy assumes an admission was appropriate if a patient's stay spanned two midnights. If not, the visit should be paid as an outpatient observation visit, the CMS states.
The two-midnight policy was established to address a spike in observation stays apparently caused by hospitals' fear that Medicare's audit contractors would challenge their admissions.
The CMS delayed enforcement of the two-midnight rule after hospitals complained that the policy undermines clinical decisions.
But the contractors that carry out audits of Medicare payments say it's time for the moratorium to end. They argue that a lack of scrutiny has led to a spike in inappropriate payments.
Last month, the American Hospital Association sent a letter to CMS Deputy Administrator Sean Cavanaugh asking that the moratorium be extended and suggesting other ways to “reimburse hospitals more accurately for the resources used to treat patients who stay in the hospital less than two midnights.”
A CMS spokesman declined to say what the agency plans to do. It is scheduled to release proposed rules for the fiscal 2016 inpatient prospective payment system by the end of April. That could include further clarification of payment policies for short hospital stays. Those rules would take effect Oct. 1.
Hospital officials say it makes sense to extend the moratorium until at least that time, giving the CMS a chance to provide additional clarity on the policy. “It's fundamentally unfair to audit (hospitals) on rules when CMS hasn't given them or the contractors appropriate direction on how to implement the rule,” said Priya Bathija, the AHA's senior associate director of inpatient payment policy.
